Major objective of this report is to analysis Loan and Advances of HSBC Bank. Other objectives are calculating sustainable growth of bank’s different items and observe the products and services of specific branch. Report also analysis on existing banker customer relationship and explain about variation of products and services. Here focus overall about general banking. Finally draw SWOT analysis and find out problems related on Loan and Advances and suggest recommendation.
The financial institutions especially banks have undergone a tremendous change in recent years due to high competition. They always try to expand their business, so that they are offering venous products & services to the customer. As a multinational bank HSBC Is not an exception of them.
They are not only competing with the local banks but also with the foreign banks, which have strong capital base and new approach to offer services to their customers. In this new regime of liberalization banks are facing huge competition. They are to adopt new strategy for their banks to attract their customers because in this situation the customer are sensitive to the services of the bank and they compare services and If they find any opportunity to other banks they switch and get benefit.
Another important thing that has also brought competition in the banking sector is the adoption of technology-based products and services. If any bank is lagging behind this race they are knocked out of the market and this has proved the great saying “survival of the fittest. Another factor that forced the bank to change their strategy to cope with situation Is the entrance of many non-bank financial institutions that did not adopt the true definition of bank but providing different services of the banking In nature. As a result, to maintain a sustainable growth has become a great challenge for the bank. In this competitive situation HSBC offered various products & services to attract the customers that I tiled my best to find out and describe in this paper.
Objectives of the Study
General objective of this report cognates the Internship purpose. The internship objective is to gather practical knowledge and experiencing the corporate working environment with the dose approximation to the business firm and the experts who are leading and making strategic decisions to enhance the growth of a financial institution.
Every task has its respective goals or objectives without which the work is meaningless. Keeping the following objectives in my view I have prepared this thesis paper.
- To fulfill the partial requirement of Internship program.
- To gain practical exposures in different banking activities
- To familiar with the working environment In bank
- Calculating sustainable growth of bank’s different items.
- To apply theoretical knowledge In the practical field.
- To observe the products & services of specific branch and the bank as a whole.
- To be acquainted with day to day functioning of service oriented banking business.
- To study existing banker customer relationship.
- To learn about variation of products & services.
- To learn about general banking.
Methodology of the Study
The information gathered for this report through the use primary and secondary source. Initial contacts with key persons have been made through personal contacts. Sub sequent interviews with the concerned infidels have been used for collecting information. Additional secondary information has been collected from company’s published yearly publications. Data and information are collected through the following ways:
Primary sources of data:
- Interviews both formal and informal were taken from the officers of HSBC.
- Observing the procedure of banking activities followed by relevant departments.
- Face to face discussion with the respective officers of the branch.
- By interviewing customers at HSBC, Dhanmondi Branch.
Secondary Sources of Data:
- Previous Annual Reports published by HSBC.
- Brief History published by HSBC.
- Reading various relevant files.
- Deskwork: during the practical orientation I worked at Customer Services Department (CSD)
- Prior research reports
- Any information regarding the Banking sector
- Different books and periodicals related to the banking sector
- Bangladesh Bank Report
Banking in Bangladesh:
Banking is the backbone of national economy. All sorts of economic and financial activities revolve round the axis of the bank. As the industry produces goods and commodities, so does the bank creates and controls money-market and promotes formation of capital. From this point of view, banking-a technical profession- can be termed as industry. Services to its customers are the products of banking industry besides being a pivotal factor in promoting capital formation in the country. As all economic and fiscal activities revolve round this important ‘Industry, the role of banking can hardly be over emphasized.
Circumstances being such, It becomes Imperative to find out the role that now planning in the country and analyze its operational aspects so as to ascertain the Importance of this delicate financial sector and Its over all Impact on our national economy. To ascertain the role of banks and to analyze Its operational aspects and its overall Impact on our national economy a through study as to Its distribution, expansion and contribution Is essential to comprehend Its past, present and future bearings for the growth and development of the banking sector of the country. In the global context, the role banks is far – reaching and more penetrating In the economic and fiscal discipline, trade, commerce, Industry, export and import- all carried through the bank. Banks are the only media through which international trade and commerce emanate and entire credit transactions, both national and International.
Headquartered in London, HSBC Holdings plc is one of the largest banking and financial services organizations in the world. HSBC’s international network comprises over 10,000 offices in 83 countries and territories In Europe, the Asia Pacific region, the Americas, the Middle East and Africa.
Through an international network linked by advanced technology, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services: personal financial services; consumer finance; commercial banking; corporate, investment banking and markets; and private banking. At 30 June 2007, the Group’s total assets amounted to US$2,150 billion. It has 315,000 employees and over 125 million customers around the world.
Although the Group’s holding company, HSBC Holdings plc, was formed as recently as 1991, many of Its principal constituent companies opened for business over a century ago and have long experience In their home and International markets. The story of the growth and ‘development of these companies is rich In variety and achievement, with an International pedigree that is unique In banking history.
The making of the modern HSBC Group:
When The Hongkong and Shanghai Banking Corporation acquired the Mercantile Bank and The British Bank of the Middle East In 1959, It laid the foundations of today’s HSBC Group. In these acquisitions and, by the later investment In Hang Seng Bank In 1965, the bank grew and diversified through subsidiary companies with their own experience and expertise.
In the late 1970s, this ‘group’ approach was a key factor In the strategy for expansion In markets where previously The Hong Kong and Shanghai Banking Corporation was not well represented, particularly In North America and Europe. In the United States, this expansion centered on the purchase a 51 per cent shareholding in Marine Midland Bank in 1980. This purchase, at a cost of US$314 million, nearly doubled the Group’s assets, from HK$128 billion to HK$243 billion. The remaining shares were purchased In December 1987, making Marine Midland the Group’s principal subsidiary In the United States.
In Europe, The Hong Kong and Shanghai Banking Corporation sought a partnership similar to its investment in Marine Midland. In 1981, its plans to acquire the Royal Bank of Scotland, countering a bid from Standard Chartered Bank, were thwarted when the UK Monopolies and Mergers Commission ruled against both bids. six years later, however, the bank signaled Its continuing interest in the major British banks when it purchased a 14.9 per cent interest in Midland Bank. A co-operation agreement between the bank and Midland allowed the two banks to consolidate and rationalize their international catties by reciprocal transfers of business as, for example, the transfer of Midland Bank Canada to Hong Kong Bank of Canada in 1988.
The formation of HSBC Holdings plc In 1991, creating a holding company for the entire Group with its shares quoted in London and Hong Kong, showed that the Group viewed Europe and the
London market in particular, as a vital part of its future development. This strategy was made dear when, in March 1992, HSBC Holdings announced that It would make a recommended offer for full ownership of Midland. In late April Lloyds Bank, one of the other British clearing banks, indicated that It was also considering an offer for Midland. That possible offer was dropped shortly after HSBC announced Its final offer In June 1992, valuing Midland at £3.9 billion. The offer became unconditional In July, the Group’s total assets from £86 billion In 1991 to over £170 billion In 1992.
HSBC’s acquisition of Midland created one of the largest finandaf organizations of Its kind in the world. Attention now turned to integrating and consolidating the business of the enlarged Group. HSBC was spending keen to see a synergy of the Interests of the major subsidiary companies. Treasury operations In London, New York and Tokyo were integrated and common standards In technology were Introduced. Similarly, between 1992 and 1994, HSBC drew together Its activities In merchant banking, securities and asset management~ and then enhanced its private banking and securities custody business. In each of these areas of business, the enlarged Group benefited from a greater level of co-ordination and a commitment to effective technology and training. The results of these efforts were reflected In HSBC’s performance, with profits attributable to shareholders increasing from £586 million in 1991 to more than E2,000 million In 1994.
An important result of the acquisition of Midland was the transfer in January 1993 of the Group’s head office — but not that of The Hong Kong and Shanghai Banking Corporation Ltd — from Hong Kong to London to meet the requirements of the UK regulatory authorities. Although the Bank of England now became the lead regulator for HSBC Holdings, the banking subsidiaries continued to be regulated locally in their country of operation. HSBC’s traditional concern for rapid decision-making and local accountability meant that the new Group Head Office In London provided only the essential central functions, such as strategic planning, human resource managements legal and company secretarial and financial planning and control. In 19g8, HSBC announced that these head office functions, together with most of the Group’s London-based businesses and operations, would be relocated to a new headquarters building In London’s Docklands. The 45-storey tower, designed by Foster and Partners, was officially opened In April 2003. The new building quickly brought advantages in communications, logistics and working conditions for some 8,000 HSBC staff.
In the late 1990s and early 2000s, HSBC vigorously developed Its role as one of the world’s leaders In banking and financial services Its strategy of ‘Managing for Value’ emphasized the Group’s unique balance of business and earnings between the older, mature economies and the faster-growing emerging markets. The creation of new subsidiaries in South America In 1997, for Instance, extended HSBC’s reach In emerging markets, as did the acquisition of all of Lloyds 158’s assets relating to Brazil In 2003.
In contrast, the acquisition In 1999 of Republic New York Corporation and Safra Republic Holdings S.A. for US$9.85 billion reinforced HSBC’s presence In the highly developed markets of the United States, Switzerland and Luxembourg. The third-largest deposit-taking bank In the New York metropolitan area and a leading name in private banking, Republic matched HSBC’s aim of delivering wealth management In key financial centers around the world. A further major Investment followed when HSBC announced in April 2000 a US$11 billion recommended offer for Credit Commercial de France (CCI). Established In 1894, CCF brought Into the Group a network of 650 branches In France and greatly strengthened HSBC’s presence In the euro zone.
In November 1998, HSBC announced the adoption of a unified brand, using HSBC and Its hexagon symbol nearly everywhere It operates, with the aim of enhancing recognition of the Group and Its values by customers, shareholders and staff throughout the world. The branding Initiative allowed HSBC to develop new services and products on a worldwide scale, all beating the Group’s Identity.
Launched In 2000, HSBC Premier provides round the- clock International services for the Group’s most valuable personal customers. The HS8C brand has also proved Its worth in a series of global marketing programmers and sponsorship. Since 2002, the HSBC identity has carried the strap line ‘the world’s local bank’ emphasizing the Group’s experience and understanding of a great variety of markets and cultures.
Although HSBC’s acquisitions and growth since 1992 had brought greater geographical balance, Its position in North America did not yet match Its prominence In Asian and European markets. As a platform for growth In that region, In 1999 the shares of HSBC Holdings plc were listed on the New York Stock Exchange In parallel, HSBC’s share structure was simplified by introducing a single class of ordinary shares denominated in US dollars. Acquisitions were also essential to a larger role In the region and In 2003 the purchase of Household International, Inc added substantially to the Group’s business and profile; Household’s network of over 1,300 branches provided consumer finance to over 53 million customers.
The Investment In North America was matched south of the border by a series of purchase. In 2002, HSBC acquired and recapitalized Grupo Financier Bital In Mexico and In 2006 purchased Grupo Banlstmo. Based In Panama, Grupo Banistmo was the leading banking group In Central America and gave HSBC access to new markets, with offices In Colombia, Costa Rica, El Salvador, Honduras and Nicaragua.
Despite Its adventures overseas, HSBC still has a dear focus on its place of birth. In 2005 HSBC celebrated 140 years of business In China and continues to grow in the region. The branch network In China expanded to 62 outlets by the start of 2008, and new products and services were provided to the growing customer base, Including offering reminding services to Chinese citizens. In April 2007 HSBC announced the formation of a locally incorporated bank – HSBC Bank (China) Company limitted – and in the same year received permission to become the first international bank to establish a bank in rural China. HSBC has also built up a network of strategic partners In the region, taking significant stakes In Bank of ShanghaI (2001), PIng An Insurance Company of China (2002), and Bank of CommunIcations Limited (2004).
HSBC reinforced Its long-standing commitment to the environment in 2004 when It became a founder member of the climate Group and, In the following year, achieved its target of becoming the first major bank to become carbon neutral. Major programs are In place to embed sustainable practices Into the everyday business of the Group, Including Issuing lending guidelines for environmentally sensitive sectors such as forestry and chemicals. This work gained recognition In 2007 when HSBC won the first Financial Times Sustainable Banking Award.
Today HSBC occupies a leading position In the world of banking and finance with an International network that spans six continents. Its distinctive history and experience places HSBC In a strong position to meet the challenges of the rapidly changing business environment of the 21d century. HSBC has traveled a long way since Its beginnings in 1865 – from a small local bank to the world’s local bank
HSBC in Bangladesh:
HSBC obtained license from Bangladesh Bank on The HSBC Asia Pacific group 1 April 1996 to conduct banking business In the country and commenced formal banking operations on 3 December 1996 through opening a branch at Dhaka. In Bangladesh , the HSBC Group Is represented by Hong Kong bank , which has Its head office In Hong Kong and a holding company, HSBC holding plc which is incorporated in England on 41 December 2000, total capital and reserve of HSSC In Bangladesh were BDT 535.7 million , which comprised capital BDT. 441.6 million and supplementary capital BDT. 94.2 million.
Realizing the huge potential and growth In personal banking industry In Bangladesh, HSBC extended Its operation to the personal banking sector In Bangladesh and within a very short span of time it was able to build up a huge client base. Extending its operation further, HSBC opened two branches at Chittagong, six branch offices at Dhaka (Guishan, Kawran Bazar, Mothijheel, Dhanmondl, Uttara and Banani) and one branch in Sylhet.
HSBC Bangladesh is under strict supervision of HSBC Asia Pacific Group, Hong Kong. The Chief Executive Officer of HSBC Bangladesh manages the whole banking operation of HSBC in Bangladesh. Under the CEO there are heads of departments who manage specific banking functions e.g. Personal banking, corporate banking, etc. Currently HSBC Bangladesh Is providing a wide range of services both two Individual and corporate level customers. In the ‘,‘ear 2000, the bank launched a wide array of personal banking products designed for all kinds of (middle and higher-middle Income) individual customers. Some such products were Personal loans, car loans, etc. Recently the bank launched three of Its personal banking products – Tax loan, Personal secured loan & Automated Tele Banking (AIB) service. These products are designed to meet the diverse customer needs more completely.
HSBC In Bangladesh also specializes In self-service banking through providing 24-hour ATM services. Recently It has introduced Day & Night banking by Installing Easy-pay machines in Banani, Uttara and Ohanmondi to better sadist’s the needs of both customers and non-customers. In total HSBC currently has 22 ATM’S and 6 Easy-pay machines located at various geographical areas of Dhaka & Chittagong.
Personal Financial Services (PFS):
PFS Is the most flourishing department of HSBC Bangladesh. This department basically deals with the management of products and services offered to the In individual consumers. Within a span of only seven years, HS8C~ PFS has grown tremendously and Is still growing with Its innovative products and service offerings. Manager of PFS, Mr. Shafliat Hossain, Head of this department He Is the person behind the astounding growth of PFS department in HSBC Bangladesh. Chief of PFS manages and supervises the Personal Banking activities of the brand, network of HSBC Bangladesh. The 9 branches of HSBC basically deal with the personal banking activities and provide various accounts service.
There are seven branches of HSBC, 6 situated at different place in Dhaka and 2 at Chittagong and another is in Sylhet. Only the Dhaka office (head office) branch & Chittagong branch deals with both corporate and personal banking. The other 5 offices only deal with the personal banking activities. There functions are to provide various financial services to the consumers. These Including customer services, sale of various PFS products, opening new accounts, providing cash, remittance and other teller services, etc. the branches are quite decentralized for better delivery of services to customer and have their own premises and facilities. Branch managers head these branches. Each branch Is staffed with Its own team of employees1 A great deal of teamwork Is seen within these brandies. ATM’S are situated with each branch premises.
The ATM center ensures smooth operation of the ATM machines that are located at Dhaka, Chittagong and Sylhet The ATM center is responsible for regular replenishment of the off-site ATM’s and serving of all the ATMs. Currently a total 22 ATMs are in operation. The ATM center also deals with issuance, termination and servicing of the ATM cards. Basically, the ATM center Is the department that is solely responsible for all the activities related to ATM and Is the facilitating department that enables customers 24 hour banking support.
Product and Service
HSBC Bangladesh carries out all traditional functions, which a commercial Bank perform such as Mobilization of deposit, disbursement of loan, investment of funds, financial export & import business, trade & commerce & so on. Besides it also offers some specialized services to Its customers. Products & services offered by HSBC can be categorized according to the customers they serve. Thus two major groups can be Identified. They are — individual customers or consumers & corporate customers or organizations. An In-depth analysis of HSBC’s product and services In Bangladesh Is presented In this section. First of all, the liability products of the bank are discussed. Then, the various products and services of personal banking division will be presented. The summary of all the products and services of HSBC Bangladesh Is displayed In the following page with the help of a diagram.
Products& Services of HSBC
HSBC Bangladesh carries out all traditional functions, Which a commercial Bank performs such as Mobilization of deposit, disbursement of loan, investment of funds, financing export & Import business, trade & commerce & so on. Besides it also offers some penalized services to Its customers. Products & services offered by HSBC can be categorized according to the customers they serve. Thus two major groups can be identified. They are – Individual customers or consumers & corporate customers or organizations. An in-depth analysis of HSBC’s product and services In Bangladesh Is presented In this section. First of all, the liability products of the bank are discussed. Then, the various products and services of personal banking admission will be presented. The summary of all the products and services of HSBC Bangladesh Is Mowing with the help of a diagram.
Products of HSBC
Personal Banking Products: Liabilities
The financial products of HSBC can be categorized into two groups – Asset products and liability products. Asset products are the various types of credit and loan schemes offered to consumers whereas the liability products consist of all the savings and deposit schemes offered to customers. In the following section, the liability products of HSBC are described briefly:
This Is a depository account basically designed for small-scale savers. This Is an Interest bearing account and the features of this account are as follows:
- Opening balance Taka 50,000/
- Average balance that should be maintained: Taka 50,000/
- Interest bearing (from 4% – 25%). One of the unique features of HSBC savings account is that interest is calculated on daily outstanding balance and Is credit to customers account every six months.
- No restrictions on number of Transactions
- No yearly ledger fee
- Free ATM card and phone banking service
- Documentation required to open the account: one pp-size photograph, filled account opening form, passport copy & check/cash of Taka 50,000/-
- Can be opened only by Bangladesh and dual citizens in single or joint names.
This is also a depository account basically designed for various customers. This Is a non interest bearing account and the features of this amount are as follows:
- Opening balance Taka 50,000
- Average balance that should be maintained: Taka 50,000
- No restrictions on number of Transactions
- No yearly ledger tee
- Non Interest bearing
- Free ATM card and phone banking service
- Can be opened only by:
- Individuals (Joint or single)
- Partnership companies
- Limited Companies
- liaison offices
- Documentation needed: various kinds of documents are needed for the companies such as memorandum of association, board resolution, etc. however the requirements for Individuals are same as the savings account
Short Term Deposit: (STD)
These accounts are opened mostly by the organizations. Organizations normally maintain current accounts In the banks. They need to transact bulk amount regularly that’s why, current account fits with their requirements. As current accounts do not provide any Interests and as the organizations cannot have savings account, they are deprived of earning any Interest despite having huge deposit In their accounts. ‘Short-term deposit’ accounts enable them to earn interests from their accounts. These kinds of accounts share some properties of both current and savings accounts. The account provides interests, which are like the savings accounts, and the holder can withdraw any amount any time from his account, which Is a property of the current account. Individuals especially, businessmen maintain such accounts.
It is also known as term deposits. These deposits are made In the bank for a fixed period of time. This period of time should be sped fled in advance. The bank needs not maintain cash reserves against these deposits & therefore, it offers Interest rates that are higher than the savings accounts.
Residents Foreign Currency Current accounts
80 nationals residing abroad open this account Foreign nationals residing abroad or In Bangladesh, Foreign firms registered abroad, Bangladeshis working In multinationals at Bangladesh and receiving salary In FC can also open such account. The account Is non-Interest bearing and there are various kinds of restrictions for withdrawals and deposits. The account can be maintained In Euro (EUR), Pound Sterling (GBP) and US Dollar (USD).
Non-resident foreign currency accounts
These are time deposit interest bearing accounts. All non-resident Bangladeshi nationals can open them, persons having dual citizenship, shipping staffs, etc. they can be maintained In EUR, GBP & USD currencies. These accounts are strictly monitored by the central bank and restrictions exist for these accounts.
Resident foreign currency deposit accounts
Balances in these accounts are freely transferable abroad without any restriction from Bangladesh bank. Resident Bangladeshis returning from abroad can open this account within one month of his/her return.
Convertible Taka account
Diplomatic missions, UN organizations, non-profit international companies, foreign contractors & consultants, expatriate resident employees of UN missions can open these accounts. These accounts are maintained in Taka and is non-Interest bearing.
Exporters Retention quota accounts
Exporters earn foreign currency. But due to legal restriction posed by the Bangladesh bank, they cannot keep foreign currency more that $5,000. As the exporters earn bulk of foreign exchange and are deprived of the benefits of foreign currency accounts, a special kind of account Is created to benefit them. In this special type of account they can keep up to a 7% of their total amount of foreign currency exports and earn Interests according to dollar interest rates. Some other special benefits are also awarded to such customer such as free endorsements, withdrawals that are higher than the maximum limits, discounted rates for it’s, etc. They use those accounts in the purpose of remittance and other business purposes.
There are various other accounts that are created to meet customer demands and requirement. Such accounts are customized and restrictions on these accounts are subject to change.
Services offered to these accounts
Wide ranges of services are offered to the customers who hold these accounts Some such services are:
- Free ATM Card, check book & phone banking service
- Cheques /Cash deposits
- Standing instruction
- Quarterly/ monthly statement of account
- Foreign currency Endorsement against travel quota and sale of Travelers Cheques (Thomas Cook).
- Issue of Solvency Bank certificate
- Payment orders, demand drafts, Telegraphic transfers.
- Inward and outward funds transfer and receiving.
Some unique services are also provided to customers using HSBC accounts. These services are Phone Banking, Self Service Banking & Power vantage Scheme.
Personal Banking Products: Assets
The personal banking division of HSBC has designed various assets products to meet the needs of individual customers. These are various loans and consumer credit schemes that satisfy and fulfill some basic purchase purpose of the individual customers. These products are described In the following sections.
Personal Credits offered by HSBC are
- Personal Installment Loan
- Car Loan
- Home Loan
- Personal Secured Loan
- Personal Secured Credit
- Credit card
HSBCS co-branded credit card with Prime Bank gives you the freedom to pay for goods and services without the hassle of carrying cash. The card is accepted at shops, restaurants, hotels, airlines and travel agents, departmental stores, hospitals and diagnostic centers, practically anywhere In Bangladesh displaying the MasterCard logo.
Product Name: HSBC – Prime Bank CO-branded Master Card Gold Card Card Type: Local Master Card Gold Card
- Staff Card: BDT 15,000/- to 1,00,000/-
- Master Card Gold Normal: BDT 50,000/- to 1,00,000/-
- Master Card VIP: BDT 1,00,000/- to 2,00,000/-
Higher credit limit will be granted on exceptional basis
- Primary Eligibility: Minimum BOT 25,000/- gross income from regular sources. Bangladeshi Citizen 21-65 years of age and has account with HSBC
- For Supplementary card the person has to be at feast 18 years of age
- Card Life: By default 2 years for all cards new and renewed
- Repayment Period: 26 day of every month. Maximum 50 days interest free period
- Minimum Payment Calculation
- 8% of the current balance shown on the statement or BDT 500/- which ever Is If current balance Is less than BDT 500/-, then full payment
- For over limit account: 8% of the credit limit plus exceeded amount
- For overdue account: minimum of the previous statement plus 8% of the billed amount.
|Fees and charges: (VAT applicable)|
|Annual Fee||BDT 2,000/-|
|First Supplementary Annual Fee||Free|
|2nd -9th Supplementary Annual Fee||BDT 1,000/-|
|Card Replacement Fee||BDT 500/-|
|Late Payment Fee||BDT 300/-|
|Excess Limit Fee||BDT 500/-|
|Statement Retrieval Fee||BDT 50/- per statement|
|Sales Slip Retrieval Fee –||BDT 250/-|
Figure: Fees and charges for Credit Card
Supplementary Card: Total 9 cards can be availed. There will be no annual fee for the first supplementary card.
Interest: 2.5%s monthly. Interest is calculated on daily basis on card accounts from posting date. If payment is paid within the payment date in full, no interest Is charged. This present a cardholder the option to enjoy a maximum of 50 days free credit facility
Penalty for Late Payment: The billed amount needs to be repaid or the minimum as shown on the Statement of Card Account within the Payment Due Date to avoid Late Payment Fee. If payment received late for two months, the card account may be suspended.
Penalty for Excess Limit: Minimum as prescribed. Any excess limit must be paid immediately otherwise fees may be charged twice. Interest, Excess limit Fee shall be debited to Card Account on the Payment Due Date. Any discrepancy is the statement should be reported to Prime Bank Limited, Card Division with in 10 days from the Statement Date. Else the billed amount shall be considered correct
Services of HSBC
As one of the largest International banks in Bangladesh, HSBC has a long-term commitment to its customers and provides a comprehensive range of financial services: personal, commercial and corporate banking; trade services; cash management treasury; consumer & business finance; and securities and custody services. This is an integral and vital part of the bank. The services department ensures smooth operation and functioning within and between all the departments of HSBC. It also provides continuous support to the core banking activities of HSBC. The Manager of Services heads this department who formulates and manages various critical Issues of the services function of HSBC. He Is followed by a group of executives who are the heads of various subsidiary divisions that operate within the services department The services department is considered as the backbone of all other departments The various subsidiary divisions within this department are Administration, IT, Internal Control (IC), Network Services Center (NSC), and HUB.
Like that of any other organizations, the Admin department of HSBC makes sure that the organizations moves on with all its departments and staffs operating according to all the rules and regulations of the company. It also prevents any bottlenecks with in the work process and ensures smooth functioning. The admin department has two divisions – general administration and Business support services.
The general admin division Is pretty much similar to the admin departments of other companies that ensure and regulatory concerns. The business support services provide supports to the departments during employee leaves and sudden terminations so that the department can function without problems.
This department gives the software and hardware supports to different departments of the bank As HSBC is engaged in online banking, the role of ii is very crucial for the bank. This department is the most active department of HSBC where employees always stand by to solve any problems in the system. The managers and executives of IT division work continuously to develop the total it system of HSBC so that it can be operated with ease, accuracy and speed.
HSBC has Internal auditors who visit on regular basis and submit the report to the higher authority for audit purposes. This gives different departments the chance to know their mistakes and take necessary corrective actions. Again, the Bank annually administers a company wide audit program to evaluate the overall performance of the bank in Bangladesh.
HSBC Universal Banking (HUB)
The HSBC banking system is called HUB. HSBC does the online banking and It is HUB, which sets up the parameter for that This HUB is linked with the HSBC group via satellite and each and every transaction made by HSBC within Bangladesh is being recorded at the HSBC Asia-pacific headquarters at Hong Kong via HUB. Thus the HUB is the most powerful and important equipment of HS8C Bangladesh that monitors and tracks any fraud and faults made with HSBC Bangladesh.
Network Services Centre (NSC)
This department can be described as the ‘Power House of HSBC Bangladesh. NSC does the back office job for the bank. The main four jobs that are performed by NSC are Clearing, Scanning of signature cards, issuing checkbooks and sending & receiving Remittances. NSC looks after the clearing process of HSBC and makes necessary contact with the central bank for maintaining account flows. All the customer signatures are scanned in this department and are entered Into the system. NSC also issues checkbook for new and old accounts based on requisition from various branches. ‘Remittance’ is a banking term, which means ‘Transfer of funds through banks’. When a bank remits on behalf of its customers, it is termed as outward remittance. On the other hand, when the bank receives the remittance on behalf of the bank, it is inward remittance. The following are the methods that NSC used to remit money for customers: Telegraphic Transfer (IT), Demand Draft (DD) & Cashier’s Order.
Financial Control Department (FCD)
This is considered as the most powerful department of HSBC. It keeps tracks of each and every transaction made with in HSBC Bangladesh. Manager of FCD who ensures that all the transactions are made according to rules and regulation of HSBC GROUP heads It. Violation of such rules can bring serious consequences for the lawbreaker. The functions of FCD are briefly discussed In the following pages along with an organ gram of the department:
The personal banking credit department deals with the consumer credit schemes such as the Personal loan, car loan, personal secured loan, personal secured credit etc., which are tailored to meet the demand of customers. The manager of P18 credit approves and administers all the activities of this department. He Is staffed with two loan approval officers, two loan processing officer, two assistant officers and one MIS clerk. The approval officers mainly reject or approve the credit requests. After being checked by the approval officers, the credit requests go to the processing officers for further processing of the application.
Persona! Banking Division (PLB)
P18 is the most flourishing department of HSBC Bangladesh. This department basically deals with the management of products and services offered to the in individual consumers. Within a span of only seven years, HSBC PIB has grown tremendously and is still growing with its innovative products and service offerings. Manager of P18 manages this department. He is the person behind the astounding growth of P18 department in HSBC Bangladesh. Chief of P18 manages and supervises the Personal Banking activities of the branch network of HSBC Bangladesh. The 5 branches of HSBC basically deal with the personal banking activities and provide various accounts services to individual customers.
There are five brandies of HSBC, 4 situated at different Dhaka and 1 at Chittagong. Only the Dhaka office (head office) branch & Chittagong branch deals with both corporate and personal banking. The other 3 offices only deal with the personal banking activities. There functions are to provide various financial services to the consumers. These inclu customer services, sale of various P18 products, opening new accounts, providing cash, remittance and other teller services, etc. the branches are quite decentralized for better delivery of services to customer and have their own premises and facilities. Branch managers head these branches. Each branch Is staffed with Its own team of employees. A great deal of teamwork is seen within these branches. ATM’S are situated with each branch premises.
The personal banking credit department deals with the consumer credit schemes such as the Personal loan, car loan, personal secured loan, personal secured credit etc., which are tailored to meet the demand of customers. The manager of P18 credit approves and administers all the activities of this department. He is staffed with two loan approval officers, two loan processing officer, two assistant officers and one MIS . The approval officers mainly reject or approve the credit requests. After being checked by the approval officers, the credit requests go to the processing officers for further processing of the application.
Relationship Management Department
The RM department consists of various relationship managers who are assigned to different corporate to better satisfy their needs. These RM’S communicate with the and are solely responsible for the companies they deal In. Any information regarding a corporate must be communicated through the respective RM assigned to that corporate. A relationship manager may be assigned more than one company and this decision depends on the Head of Corporate Banking.
The Hexagon department deals with all aspects related to HSBC’s unique banking software product – Hexagon. It Is the global Electronic Banking system of HSBC, which offers the customers more convenient and efficient banking than ever before. It is an innovative desktop banking system developed by the HSBC group, whIch operates via the group’s proprietary worldwide communications network~
HSBC Trade Service (HTV)
Trade service is known by various names in other banks, e.g. Trade Finance Foreign Exchange, Foreign Trade etc. However, the functions are the same. As the name suggests, this department is involved in facilitating trade, both international & within Bangladesh. HSBC Is the leading provider of trade finance and related services to Importers and exporters in Asia. Trade is considered a core business of the group. The group’s presence in 81 countries of the world gives a good opportunity to control both ends of a trade transaction and keep the business within the Group. The various awards It has won from the leading publications of the world acknowledge HSBC’s excellence In trade. The trade service department has two separate subsidiaries: Credit Administration & Foreign Exchange Division.
Credit Administration department basically deals with all the documentation, processing, administration and disbursement of the import-export services provided to corporate clients. This department is known to be the heart of HSBC trade services that administers and manages all the trade tools provided by HSBC Corporate Banking. Some important aspects of this department are IC advising, documentation, OD facilities, guarantees, etc. The For-ex division of trade services is solely concerned with the management of Foreign exchange inflow and outflow. The For-ex division of trade service in relation with NSC and FCD manages the foreign currency traffic of HSBC that originates from Corporate Banking and trade services.
The sixth major department of HSBC is the marketing department. The marketing department of HSBC play a vital role in fostering the continues growth HSBC In Bangladesh. A manager Is assigned to this department who looks after the overall marketing operation of HSBC in Bangladesh. This department Is basically concerned about marketing the company’s products, services and building a strong corporate image. The marketing department of HSBC has three subdivisions: Direct Sales, Promotion & Marketing Administration, This division are discussed below:
Direct Sales (DS)
An executive is assigned to this part of the marketing department The Direct Sales division coordinate & manages the sales activities of all the Mobile sales officers (MSO) of HSBC Bangladesh. The MSO’s basically makes sales of the company various Personal Banking products such as, savings accounts, consumer loan, etc outside the banking premises. There are a total of more than 75 mobile sales officers (MSO) employed in the cities of Dhaka and Chittagong. The MSO’s are assigned to specific branches for making sales activities more smoothly. The DS executive sets sales strategies & targets for the Sales officers and manages the whole team of MSO’s In Bangladesh. The direct sales department also decides upon the commission and remuneration of the mobile sales officers as their salary structure is based on sales performances. Thus this part of the marketing division is very important for the overall growth of the Personal Banking Division.
This part of the marketing department deals with all the promotional activities of HSBC Bangladesh. Prime responsibilities of this department are: Maintaining strong public relations with various media intermediaries, Advertising the companies products and services, building a strong corporate image of HSBC in Bangladesh.
The promotion department organizes various environmental and social activities in order to build a strong corporate image of HSBC in the minds of customers as well as in the media. Maintaining strong relationship with news media is another major duty of this department.
The ATM center ensures smooth operation of the ATM machines that are located at Dhaka and Chittagong. The ATM center is responsible for regular replenishment of the off-site ATM’S and serving of all the ATMs. Currently a total 9 ATMs are in operation. The ATM center also deals with issuance, termination and servicing of the ATM cards. Basically, the AN center Is the department that Is solely responsible for all the activities related to ATM and Is the department that enables customers 24 hour banking support.
ATB refers to Automated TeIe Banking. This department deals with the back office serving of the HSBC phone banking services provided to customers. This department Is basically responsible for the activation of ATB, ATB pin generation, and ATB security management, ATB blocking and troubleshooting of all AIB problems. Currently this department Is staffed with one executive and an officer
This division of HSBC provides financial services to organizational clients. HSBC is a worldwide leader in banking and financial services whose success Is based on its relationships with its corporate clients. Whether it is locally or around the world, HSBC offers a comprehensive range of services that can be tailored to the individual needs of the company. Two offices of HSBC Bangladesh offer corporate banking services to corporate clients. These are the Dhaka Head Office and Chittagong office. Corporate Banking of HSBC Bangladesh in dudes Corporate Institutional Banking ((IS) Trade Service (HTV), and Hexagon. These sub-divisions are discussed briefly In the following sections:
Corporate Institutional Banking (CIB)
As their major customers operate internationally, HSBC serves them internationally. Operating through the centers and in dose liaison with HSBC Investment Bank, Corporate and Institutional Banking provides the full range of the Group’s capabilities at local and global levels, with a particular focus on payments and cash management, trade and securities custody. HSBC also offers local institutions and banks access to wide range of financial services available on an international basis. The services are tailored to suit the needs of the companies. CIB has two separate wings: Relationship management department and Hexagon.
The promotion also coordinates all the advertising of HSBC products within Bangladesh. Some of the advertising tools that are frequently used by the company are as follows:
a) Newspapers Advertising: Regular advertisements of various products and services of HSBC are given in some of the counties most renowned daily newspapers.
b) Billboards: Huge colorful billboards with HSBC logo are found In various major areas of Dhaka and Chittagong. These billboards emphasize on the needs of customers and shows HSBC logo as solution to their needs.
C) Road Side Signposts: Medium sized multi colour signposts focusing on various products of HSBC are found on the roadsides of various posh areas such as, Gulshan, Dhanmondi, Bandhara, Motijheel, etc.
d) Mailers: various product updates and new product Information are regularly sent to existing customers of HSBC.
e) Brochures: Various colorful brochures featuring specific products of HSBC are being displayed and distributed to existing and potential customers via branch offices and Mobile sales officers.
These are some of the promotional activities managed and coordinated by the promotion department.
|Strong corporate Identity|
Distinct operating Procedures
|HSBC is the leading provider of financial services worldwide. With its strong corporate image and identity it can better position in the minds of customers. This image has helped HSBC grab the personal banking sector of Bangladesh very rapidly.|
HSBC in known worldwide for its distinct operating procedure. The company’s Managing for Value strategy better satisfy customers needs and also keeps the firm profitable.
|Distinct schedule||Everyone in HSBC from the appraiser to the top management has to work to the same schedule toward a different aspect of the same goal, interfacing simultaneously at all level over quite a long period of time.|
|Strong employee bonding and belongingness||HSBC employees are one of the major assets of the company. The employees of HSBC have a strong sense of commitment towards organization and also feel proud and a sense of belonging towards HSBC. the strong culture of HSBC is the main reason behind this strength.|
|Efficient Performance||HSBC provides hassle free customer service to its client base comparing to the other financial institutions of Bangladesh. Personalized approach to the needs of customers is its motto.|
|Young Enthusiastic workforce||The selection & recruitment of HSBC emphasizes on having the skilled graduates & postgraduates who have little or no previous work experience. The logic behind is that HSBC wants to avoid the problem of ‘garbage in & garbage out’. & This type young & fresh workforce stimulates the whole working environment of HSBC.|
|The human resource of HSBC is extremely well thought & perfectly managed. As from the very first, the top management believed in empowered employees, where they refused to put their finger in every part of the pie. This empowered environment makes HSBC a better place for the employees. The employees are not suffocated with authority but are able to grow as the organization matures.|
|AU office walls in HSBC are only shoulder high partitions & there is no executive dining room. Any of the executives is likely to plop down at a table in its cafeteria & join in a lunch chat with whoever is there. One of the employees has said, Its exciting to know you may see & talk to the top management at any time. You feel a part of things”.|
|No communication barriers||DBD has tried hard to avoid communication barriers & structural bureaucracies . The little existence of authoritative bafflers among the different level of management stimulates a feeling of importance as their work get priority over the position.|
|Equalization||At HSBC workshops are conducted periodically. On the workshops, all people participate as equals, with new members free to openly challenge top managers.|
|Free exchange of communication||At HSBC the main objective is to setting up workshops are to remove authority from an artificial spot at the top, & place it where the most knowledgeable people are, the people dosest to the operations. The free exchange of ideas is reinforced by a policy of ~construct1ve confrontation”. Each employee is expected to challenge ideas openly & aggressively, but never attack an individual’s motives for presenting an idea.|
|14B0||HSBC also has Management by Objectives (MBO) everywhere. Each person has multiple objectives. the employees must have to get the approval of their bosses on what they are going to do. Later they review as how well they have performed their job with their management as well as the peer group.|
|One-to-one” meeting||The MBO makes the review a communication device among various groups. The key to the system is a 5one-to-one” meeting between a supervisor & a subordinate. In the meeting, the problems in dealing with customers are put forward first & every one dug it to solve them.|
|Modem Equipment & technology||HSBC owns the best banking and information technology equipments in Bangladesh. It ultra modem banking systems starting from terminal HUB’S are based on the international HSBC group standards and are the latest The Hexagon product is one of the best examples in this context.|
|HSBC has some of the best visually appealing branches and office. premises in Dhaka & Chittagong that highly attracts customer’s attentions and customers also feel the international environment while banking with HSBC.|
|Absence of strong|
|HSBC currently don’t have any strong marketing activities through mass media e.g. Television. TV ads play a vital role in awareness building.|
HSBC has no such TV ad campaign.
|Narrow operating span||HSBC has a very narrow operating span in Bangladesh. It has only 2 full service branches in Bangladesh situated only at Dhaka and Chittagong. Various geographic segments are currently not availing the services of HSBC due to inconvenient branch location or absence of neighborhood branches.|
|Currently the personal banking divisions of HSBC do not have investment products for its customers. The banning of investment loan by central bank posses a strong pressure to design new products.|
|Too many contract workers||HSBC has contract workers who lack the commitment with superior quality service and also are pretty classified as being a contract worker. This hampers the banks service quality as a whole.|
|HSBC can peruse a diversification strategy in expanding its current line of business. The management can consider options of starting merchant banking or diversify in to leasing and insurance. As HSBC is one of the leading providers of all financial services, in Bangladesh it can also offer these services.|
|Credit Cards||This is one of the most popular and emerging product in Bangladesh Which offers customers total financial mobility. Various other banks and institutions are currently offering this product. HSBC can also take advantage of this product and grab the market share.|
|Acquisition||HSBC is one of the experts in acquiring various firms and rganizations.In Bangladesh it can also diversify quickly by acquiring various local established banks and increase its total operation within Bangladesh rapidly.|
|High demand of Housing loans||Since housing is one of the basic needs of people, there is a high demand of housing loans. HSBC personal banking division can focus on this category of products and grab these segments of customers.|
|Distinct operating procedures||HSBC is noted for its distinct operating procedures. Repayment capacity as assessed by HSBC of individual client helps to decide how much one can borrow. As the whole lending process is based on a client’s repayment capacity, the recovery rate of HSBC is dose to 100%. This provides HSBC financial stability & gears up HSBC to be remain in the business for the long run.|
|Countrywide network||The ultimate goal of HSBC is to expand its operations to whole Bangladesh. Nurturing this type of vision & mission & to act as required, will not only increase HSBC’s profitability but also will secure its existence in the log run.|
|More experienced & managerial know-how||The top management team of HSBC is expert in banking activities. The operating policies established by them are unique & unified. All the members of the team carry out their management roles exhaustively. They equally contributed to HSBCs superior leadership, by carrying out their unique roles. They worked well together, respecting each other’s abilities, & arguing openly & without any rancor when they disagree.|
|Upcoming Banks||The upcoming private local & multinational banks posses a serious threat to the existing banking networks of HSBC. it is expected that in the next few years more commercial banks will emerge. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against and win the battle of banks.|
|Lose of Customers||Absence of various products such as credit card, housing loans are causing various customers to detract from HSBC. This is a serious threat for HSBC Bangladesh.|
|Moderate levels of Customer|
|HSBC should continuously improve its customer service strategies and the overall service quality needs to win the customer satisfaction undoubtedly.|
|Default Culture||This is major problem in Bangladesh. As HSBC is a very new organization the problem of non-performing loans or default loans is very minimum or insignificant However, as the bank becomes older this problem will arise enormously and the bank may find itself in a more threatening environment. Thus HSBC has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem.|
HSBC has entered the new millennium in good shape, with a dear strategy and a broad spread of businesses able to pursue opportunities for profitable growth wherever they occur. The outlook for I-ISBC is encouraging. 1 got an opportunity to know the Products & Services offered by HSBC to its customers and how the department works. I also got the scope to interact with customers and reveal their expectations and perceptions about the bank’s services.
Consumer banking industry has been treated as a prospective financial sector in Bangladesh. More and more banks and non-bank financial companies are entering the industry. The industry became so attractive that multinational bank like HSBC has entered the market and wants to lead the market. However, the entrance of banks like HSBC has brought revolutionary changes in banking services. People get better service than ever before. It becomes tot easier for people to get loans and investing money into diversified portfolios. Sophisticated services like ATM, Phone banking etc. has been brought by this new generation banking.
This report has increased my knowledge about banking operations and this knowledge and experience will help me advance In career life In the future. From all of my learning at HSBC I realize that it can be a role model to the banking industry.
Through conducting this study I have acquired some practical knowledge about products & services HSBC in Bangladesh, general banking and other relevant matters. In this part of recommendations, some valuable Issues of HSBC are discussed. These were the aspects that came out while working as an intern at HSBC These were related to various parts of HSBC and thus are placed in the list of general recommendation. Though these issues were not the part of the project, they also contribute valuable information at improving the overall customer satisfaction of HSBC. Such general recommendations are discussed below:
New Branches Should Be Introduced
Customers showed a huge dissatisfaction with current locations as HSBC provides services from only 9 branches throughout Bangladesh. New branches should be constructed in Dhaka city satisfying more geographic segments. As convenience of communication to the branch location is a very important factor for the customers HSBC should consider building new branches and ATM’S within Dhaka city as well as other metropolitan cities of Bangladesh.
The management of HSBC should regularly administer marketing research activities in order to keep a regular track of satisfaction levels. Regular research should also be conducted to find out customer expectations about various service aspects. As customer expectations and satisfaction are not static figures regular research at confident intervals should be conducted.
Customer defined Service standards
A formal service blueprint should be designed with appropriate service level standards to reduce the variability of service. These standards should be customer defined and customer expectation should be considered while deciding on the service standards.
Faster Delivery of ATM cards
HSBC should reduce the amount of time required to provide new ATM cards. Currently it takes 15 days while some competitors can provide the card within 2 working days. As the HSBC ATM card comes directly from Hong Kong delays are obvious. HSBC should make necessary arrangements to produce the new cards locally In order to reduce the customer difficulties faced in the absence of ATM card.
Reconsider Interest Rates on Savings
The savings rates of HSBC should be redesign as most of the customers were currently dissatisfied with the savings rates. HSBC should restructure the interest schemes of its savings product to attract more valuable customers.
Advertising & Promotion
HSBC should pursue an aggressive advertising campaign in order to build up a strong Image and reputation among potential customers. In this context, the valuable strengths should be used for positioning the corporate image of the banking ads should be aired to reach a wider array of customers. The ads should capitalize on building strong relationship, needs of customers and quality service of the bank rather than features of products.
Launch of Credit Cards
This is one of the most popular and emerging product in Bangladesh which offers customers total financial mobility. Many local and foreign banks are currently providing these services and are satisfying customer needs more widely. HSBC should also take advantage of this popular product with no further delay and grab the market share.
While interacting with the customers at customer service point a huge amount of customers demanded lockers services. With such demand of this service, HSBC should consider of proving locker services to its customers. This will also attract new customers from other banks who are currently offering this service.
Focus on Relationship Strategies
The bank should focus more on existing customers In order to build strong and loyal relationship with them as satisfied customers more aptly or certainty recommends the bank to friends and relatives. Thus the power of relationship Will foster positive Word of Mouth Communication and will attract new customers at a lower cost
More permanent staff instead of contract workers
HSBC has many contract workers who have lack of commitment with superior quality service and also pretty dissatisfied as being a contract worker. The circumstance hampers the bank’s service quality as a whole.
Control over the mailing network:
HSBC should strictly monitor the courier services that are engaged in delivering mails and documents. Huge amount of delivery failures is being piled up at branches. So HSBC should have some control over its couriers and ensure proper delivery of malls and documents.
Last of all it can be said that In spite of having some barriers, obstacles as well as limitations HSBC is stilt in growth-oriented, feasible as well as sustainable In the long run.
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