Introduction:

Prime Bank limited is a fast growing private sector bank and the bank has focused for providing high quality customer service at a very competitive price. PBL efforts are directed at diversification of products and services. Offering customers a wide variety of choices and options have remained cornerstone of their business strategy. In this backdrop, PBL has launched credit card business in collaboration with a global player like astercard. astercard is one of the top !" brands in the world. #n alliance with these as its principal member is definitely a big advantage from marketing point of view. $he policy planners have found a showing growth of card market with the increasing acceptability of plastic money in many outlets% the business has become intensely competitive. ore players had entered into the market and some others were preparing for entry into the same. #s increasing number of customers were turning to the convenient features of credit card usage, PBL had steeped up marketing efforts to retain and enhance their market. $his report is basically deals with &# 'ompetitive #nalysis of Prime Bank 'redit 'ard with the 'redit 'ards offered by (tandard 'hartered Bank and )ational Bank Limited and its contribution towards the company growth*.

Overview of the problem:

$his paper emphasi+e that all tasks assigned to a marketing research manager, none is more critical that analysis competitors activities, performance and potentially in credit card market in Banking area that effect the pro,ection in the future periods are fundamentals to architectonic a long term strategic plan and designing appropriate marketing strategies. In a research pro,ect is has been identified that the sales growth become negative for the last few months. $hrough this research proposal I like to identify the factors, which affect large in consumer preference at the time of selecting a particular companies credit card and find out prospective solution to overcome those shortcomings. #t the same time in this e-ercise, it is tried my best to identify the variables that are significantly collateral in competitive advantage and by distinguished cardholders and merchant effect in performance.

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Objective of the study:

$he main ob,ective of the study is it e-plore and e-amine the underlying issues critical to developing and maintaining long term e-change relationship with the customers of the PBL. ore specifically through this study I like to find out the lacking of PBL in terms of its competitive competitors. .. $o identify the competitors of the PBL. !. Identify the customer /cardholders0 preference that differentiates the services of PBL 'ard with the competitor in the market. 1. Identify the merchant preference in credit card transaction. 2. Identify the share of heart of cardholders in charging credit card. 3. $o identify the share of dollars in credit and changing in total e-penses. 4. Identify the different changes, interest and service fees that give the competitive advantage in credit card market. 5. $he preference of merchant in credit card transaction. 6. Potentiality of credit card. 7. 8ind the variables that act as competitive advantage in credit card market.

Research Questions:
To achieve the objectives the following major research questions are identified:
.. 9hat are the factors affect customers at the time of evaluation of the offerings of credit card of different competitors: !. 9ho are the competitors of PBL 'redit 'ard and their performance comparing with Prime Bank 'redit 'ard: 1. 9hat type of benefits do consumers e-pect from credit card and what type of difficulties they face at the time of using it: 2. 9hat type of differentiations e-ists in the competitive of credit card according to its interest, service charge and fees:

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Methodology:
Once the research ob,ectives are finali+ed the ne-t logical step to achieve the ob,ectives is to decide the methodology to be followed. In order to achieve the primary ob,ective, quantitative method, in particular case study approach, appear more appropriate in collecting necessary data. (urvey method can be use for research purpose through using a structured questionnaire that will be prepared both for cardholders and merchants.

Data Collection: Both the primary and secondary form of information and also
requires a depth observation of the phenomenon to be investigated is used to achieve a report which is more meaningful and presentable. But most of the data are primary. $he details of these sources are given below;

Primar !ources:
a,or source of collecting information is questionnaire, which will be prepared both for cardholders as well as for merchant. #nother source of information may be discussions with the officers of credit card division through in depth interview of the competitive companies. Practical work e-posure in the credit card division may consider another source of information.

!econdar !ources:
Brochures of different banks, their annual report, research publications, annual report of BIB on Bank anagement can be the secondary sources for collecting information. <haka 'ommercial bank anagement. <haka (ecurity and =-change 'ommission who store information of all the banks operating in our country. Layout; #ll necessary parts of conventional formal report have been followed. $he readers are e-pected to get a different taste from this report.

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ime and !udget "chedule:

8or the proposed research we need to set a time set and required budget schedule, which may help to determine for further research step;

Time !chedule
$asks .. Preparing a >esearch Proposal !. 'ompletion of Literature review 1. <eveloping interview guideline and )egotiation with the cardholders and merchant 2. <ata collection 3. <ata transcription 4. <ata #nalysis 5. 'ompletions report writing, preparing recommendation and submission. $otal .! 9eeks ! 9eeks ! 9eeks ! 9eeks ! 9eeks $ime . 9eeks . 9eek ! 9eeks

Pro,ect Budget
(ub,ects .. 'ollection of literature !. (alary of the field investigators 1. $ape >ecorder, $elephone 'harge and stationary 2. <ata 'ollection 3. <ata $ranscription 4. Printing and other costs 'osts $k. !,"""."" $k. ."."""."" $k. .,"""."" $k. !,"""."" $k. !,"""."" $k. 1,""".""

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$otal

$k. !",""".""

C#$% &R'(
#&ORI IC$) !$C*+RO,-D
=very firm competing in an industry has a competitive strategy, whether e-plicit or implicit. $his strategy may have been developed e-plicitly through appalling process or it may have evolved implicitly through the activities of the various functional departments of the firm. Left to its own devices, each functional department will inevitably pursue approaches dictated by its professional orientation and the incentives of those in charge. ?owever, the sum of these departmental approaches really equals the best strategy.

'ompetition
'ompetition includes al the actual and potential rival offerings and substitutes that a buyer might consider. 9e can broaden the picture further by distinguishing four levels of competition, based on degree of product substitutability;

.. Industry competition; # company sees its competitors as all companies making

the same product or class of products. @olkswagen would see itself as competing against all other automobile manufacturers.

!. 8orm competition; # company sees its competitors as all companies

manufacturing products that supply the same service. @olkswagen would see itself competing against not only other automobile manufacturers but also against manufacturers of motorcycles, bicycles, and trucks.

1. Aeneric competition; # company sees its competitors as all companies that

compete for the same consumer dollars. @olkswagen would see itself competing with companies that sell ma,or consumer durables, foreign vacations, and new homes. =ssentially developing a competitive strategy is developing a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals.

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Process for 8ormulating a 'ompetitive (trategy

#. 9hat is the Business <oing )ow: .. Identification 9hat is the implicit or e-plicit current strategy: !. Implied #ssumptions 9hat assumptions about the companiesB relative position, strengths and weaknesses, competitors and industry trends must be made for the current strategy to make sense: B. 9hat is happening in the =nvironment: .. Industry #nalysis $he key factors for competitive success and the important industry opportunities and threats: !.'ompetitors #nalysis 9hat are the capabilities and limitations of e-isting and potential competitors, and their probable future moves: .. (ocietal #nalysis 9hat important governmental, social, and political factors will present opportunities or threats: !. (trengths and 9eaknesses Aiven anCanalysis of industry and competitors what are the company strengths and weaknesses relative to present and future competitors: '. 9hat should the business be doing: .. $ests of #ssumptions Can strategy ?ow doC the assumptions embodied in the current strategy compare with the analysis in B above: !. (trategy #lternatives 9hat are the feasible strategy alternatives given the analysis above: Is the current strategy one of these: 1. (trategy 'hoice 9hich alternative best relates the companyBs situation to e-ternal opportunities and threats:

" R,C ,R$) $-$)."I" $-D COM%& I I/& " R$ &+.:

#n effective competitive strategy takes offensive or defensive action in order to create a defendable position against the five competitive forces. Broadly, this involves a number of possible approaches. Positioning the firm so that its capabilities provide the best defense against the e-isting array of competitive forces. Influencing the balance offered through strategic, thereby improving the firmBs relative position% or #nticipating shifts in the factors underlying the forces and responding to them, thereby e-ploiting change by choosing a strategy appropriate to the new competitive balance before rivals recogni+e it

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he "tructural $nalysis of Industry:

$he intensity of competition in an industry is neither a matter of confidence nor bad luck. >ather, competition in an industry is rooted in its underlying economic structure and goes beyond the behavior of current competitors. $he state of competition in an industry depends on five basic competitive forces, which are show in 8igure; PO$=)$I#L =)$>#)$( /$hreats of new entrants0

(EPPLI=>( (Bargaining power of suppliers0

I)<E($>F 'O P=$I$O> >ivalry among e-isting firms

BEF=>( /Bargaining power of buyers0

(EB($I$E$=( /$hreats of substitute products of services0 8ig; <riving 8orces Industry 'ompetition

+eneric Competitive "trategies:

$hree Aeneric (trategies;
In coping with five competitive forces, there are there potentially successful generic strategic approaches to outperforming other firms in an industry. .. Overall cost leadership !. <ifferentiation 1. 8ocus O/&R$)) CO" )&$D&R"#I% $he first strategy an increasingly common one in the .75"s because of populari+ation of the e-perience curve concept, is to achieve overall cost leadership in an industry through a set of functional policies aimed at this basic ob,ective. 'ost leadership requires aggressive construction of efficient Cscale facilities, vigorous pursuit of cost reductions from e-perience, tight cost and overhead control, avoidance of marginal customer accounts, and cost minimi+ation in areas like >D<, service, sales force, advertising, and so on.

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DI00&R&- I$ IO$he second generic strategy is one of differentiating the product or service offering of the firm. 'reating something that is perceived industry wide as being unique. #pproaches to differentiating can take many forms; design or brand image /8ieldcrest in top of the line towels and linens; ercedes in automobiles0 technology0 ?ysteria in lift trucks acintosh in stereo companions 'oleman in camping equipment0 features /Gennie air in electric ranges0% customer service 'rown cork and seal in metal cans0 dealer network /'aterpillar $ractor in construction equipment,0 or other dimensions. Product 8orm 8eature Performance 'onformance <urability >eliability >epair #bility (tyle <esign (ervices Ordering =ase <e2livery Installation 'ustomer $raining 'ustomer 'onsulting aintenance D >epair iscellaneous Personnel 'ompetence 'ourtesy 'redibility >eliability >esponsiveness 'ommunication 'hannel 'overage =-pertise Performance Image (ymbols edia #tmosphere =vents

able: Differentiation variables

0OC,"
$he final generic strategy is focusing on a particular buyer group, segment of product line, or geographic market% as with differentiation focus may take many forms, #lthough the cost and differentiation strategies are aimed at achieving their ob,ectives industry wide, the entire focus strategy is built around serving a particular target very well and each functional policy is developed with this in mind. (trategic #dvantage Eniqueness Perceived By the 'ustomer Low 'ost Position

DI00&R&-CI$ IO -

O/&R$)) CO" )&$D&R"#I%

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0OC,"
Industry 9ide

(trategic $arget
Particular (egment only 8ig; $hree (trategic (trategies 8

$ 0R$M&1OR* O0 COM%& I OR $-$)."I":

'ompetitive strategy involves positioning abusiveness to ma-imi+e the value of the capabilities that distinguish it from its competitors. It follows that accentual aspect of strategy formulation is perceptive competitor analysis. $he ob,ective of competitor analysis is to develop a profile of the n attune and success of the likely strategy changes each competitor might make, each competitors probable response to the range of feasible strategic moves other firms could initiate, and each competitors probable reaction to the array of industry changes and broader environmental shafts that might occur. 8ig; 'omponents of a 'ompetitor #nalysis
9hat drive the competitor: 9hat the competitor is doing and can do:

8uture Aoal
#t all levels of management and in multiple decisions.

'urrent strategy
?ow the business is currently competing:

'ompetitorIs >esponse Profile

Is the competitor satisfied with its current position: 9hat likely moves or strategy shifts will competitors make: 9here is competitor vulnerable: 9hat will provoke the greatest and most effective reali+ation by the competitor:

#ssumption
?eld about itself and the industry:

'apabilities
Both (trengths and weaknesses. .

$reas Competitor "trengths and 1ea2ness

Products (tanding of products, from the userBs point of view, in each market segment Breadth and depth of the production <ealerH<istribution 'hannel coverage and quality (trength of channel relationships #bility to service the channel arketing and (elling (kills in each aspect of the marketing mi9

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(kills in market research and new product development $raining and skills if the sales force

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Operations anufacturing cost positionCeconomies of scale, learning equipment etc. $echnological sophistication of facilities and equipment 8le-ibility of facilities and equipment Proprietary knowChow and unique patent or cost advantages (kills in capacity addition, quality control, tooling, etc. Location, including labor and transportation cost Labor force climate, unioni+ation situation. #ccess to and cost of raw materials <egree of vertical integration

curve

of

>esearch and =ngineering Patents and copyrights In house capability in the research and development process /product research, process, research, development, imitation, etc0 >D< staff skills in terms of creatively, simplicity, quality reliability etc. #ccess to loused sources of research and engineering. Overall 'osts Overall relative costs (hared costs or activities with other business units 9here the competitors is generating the scale or other factors that are key to its cost position. 8inancial strength 'ash flow (hort and long term borrowing capacity /relative debt equity aeration0 )ew equity capacity over the foreseeable future 8inancial management ability, including negotiation raising capital, credit in venturous and accounts receivable Organi+ation Enity of values and clarity of purpose in the organi+ation Organi+ational fatigue based on recent requirements placed on it 'onsistency of organi+ational arrangements with strategy Aeneral anagerial #bility Leadership qualities of '=O% ability of '=O to motivate #bility to coordinate particular functions or groups of functions /e g manufacturing with resource coordination0 #ge training and functional orientation of management <epth of management 8le-ibility and adaptability of management 'orporate portfolio

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 #bility of corporation to support planned changes in all business units in terms of financial and other resources #bility of corporation to supplement or reinforce business unit strengths Others (pecial treatment by or access to government bodies Personnel turnover

/alue chain:
$o diagnose competitive advantage it is necessary to define a firmBs value chain for competition in a particular industry. (tarting with the generic chain, individual value activities are identified in the particular firm. =ach generic category can be divided into discrete activities, as illustrate for one generic category in the following figure 8irm Infrastructure
?uman >esource anagement

$echnology <evelopment Procurement Inbound Logistics Operations Outbound Logistics arketing D (ales (ervice

#dvertising arketing anagement

(ales 8orce $echnical #dministration Literacy

Promotion

8ig; $he generic @alue chain.

" R,C ,R$) $-$)."I" 1I #I- I-D," RI&"

<imensions of 'ompetitive (trategy
'ompaniesB strategies for competing in an industry can differ in as wide variety of ways. ?owever the following strategic dimension usually capture the possible differences among a company s strategic options in a given industry; (peciali+ation; the degree to which to which it focuses its efforts in terms of the width of its line the target customer segments an the geographic markets served%

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 Brand identification; the degree to which it seeks brand identification rather than competitors based mainly price or other variables. Brand identification can be as sieved inverting sales force or variety of other means. Push versus pull; the degree to which it seeks to develop brand identification with the ultimate consumer directly versus the support of distribution channels in selling its product. 'hannel selection; the choice of distribution channel ranging from company owned channels to specialty outlets to broad line outlets. Product quality; its level of product quality in terms of raw materials specifications, adherence to tolerances, features, and so on% $echnological leadership; the degree to which it seeks important to note that a firm could be a technological leader but deliberately not produce the highest quality product in the market quality and technological leadership do not necessarily go together% @ertical integration; the e-tent of value added as reflected in th level of forward and backward interruption adopted in clouding whether th firm has captive distribution e-clusive or owned retail outlets an in house service network and so on% 'ost position; the e-tent to which it seeks the low cost position in manufacturing and distribution through investment in cost minimi+ing facilities and equipment% (ervice; the degree to which it provides ancillary services with its predict line such as engineering assistance and in house service network credit and so forth. $his aspect of strategy could be viewed as part of vertical integration but of vertical integration be is usefully separated for analytical purposes% Price policy; its relative price position in the market. Price position will usually be related to the relationship between a unit and its parent such other variables as cost position and product quality but price is a distinct strategic variable that must be treated separately% Leverage; the amount of financial leverage and operating leverage it bears%

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>elationship with parent company; requirements on the behavior of the unit based on the relationship between a unit and its parent company. $he firm could be a highly diversified conglomerate, one of a vertical chain of businesses part of a cluster of related businesses in general sector a subsidiary o foreign company an dos no. $he gnarr of the relationship with the parent will influence the ob,ectives with which the firm is managed the resources available to it and perhaps determine some operations or functions that it shares with other units% >elationship to home an host government; in international industries the relationship the firm has developed or is sub,ect to with its home government as well as host governments in foreign countries where it is operating. 13

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'ompetitive #dvantage Mar2eting Mi3

arketers use numerous tools to elicit desired responses from their target markets. $hese tools constitute a marketing mi-. arketing i- is the set of marketing tools that the firm uses to pursue its marketing ob,ectives in the target market. c'arthy classified these tools into four broad groups that he called the four Ps of marketing; product, price, place, and promotion. >obert Lauterborn suggested that the sellers four Ps correspond to the customers four 's. 8our Ps 8our 's Product 'ustomer solution Price 'ustomer cost Place 'onvenience for customer Promotion 'ommunication with customer 9inning companies will be those who can meet customer needs economically and conveniently and with effective communication will get advantage against competitor.

Mar2eter Responses and $djustments

arketers also are rethinking their philosophies, concepts, and tools. ?ere are the ma,or marketing themes as the millennium approaches; >elationship marketing; from focusing on transactions to building longCterm, profitable customer relationships. 'ompanies focus on their most profitable customers, products, and channels. 'ustomer lifetime value; 8rom making a profit on each sale to making profits by managing customer lifetime value some companies offer to deliver a constantly needed product on a regular basis at lower price per unit because they will en,oy the customerBs business for a longer period. 'ustomer share; from a focus on gaining market share to a focus on building customer share. 'ompanies build customer share by offering a larger variety of goods to their e-isting customers. $hey train their employees in cross selling and up selling. $arget marketing; from selling to everyone to trying to be the best firm serving well defined target markets. $arget marketing is being facilitated by the proliferation of specialCinterest maga+ines, $@ channels, and Internet newsgroups. Individuali+ation; 8rom selling the same offer in he same way to everyone in the target market to individuali+ing and customi+ing messages and offerings. 'ustomers will be able to design their own product features on the companyBs 9eb page. 'ustomer database; from collecting sales data to building a rich data warehouse of information about individual customersB purchases, preferences, demographics, and profitability. 'ompanies can J<ata mineJ their proprietary 15

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databases to detect different customer need clusters and make differentiated offerings to each cluster. Integrated marketing communications; from heavy reliance on one communication tool such as advertising or sales force to blending several tools to deliver a consistent brand image to customers at every brand contact. 'hannels as Partners; 8rom thinking of intermediaries as customers to treating them as partners in delivering value to final customers. =very employee a marketer; 8rom thinking that marketing is done only by marketing, sales, and customer support personnel to recogni+ing that every employee must be customerCfocused. odelCbased decisionCmaking; from making decisions on intuition or slim data to basing decisions on models and facts on how the marketplace works. $hese ma,or themes will be e-amined throughout this book to help marketers and companies sail safely through the rough but promising waters ahead. (uccessful companies will be those who can keep their marketing changing as fast as their market place and market space.

ools for racing and Measuring Customer "atisfaction:

'omplaint and suggestion systems; # customerCcentered organi+ation makes it easy for its customers to deliver suggestions and complaints. $hese information flows provide companies with many good ideas and enable them to act quickly to resolve problems. 'ustomer satisfaction surveys; (tudies show that although customers are dissatisfied customers will complain. ost customers will buy less or switch suppliers. 'omplaint levels are thus not a good measure of customer satisfaction. >esponsive companies measure customer satisfaction directly by conducting periodic surveys. Ahost shopping; 'ompanies can hire persons to pose as potential buyers to report on strong and weak points e-perienced in buying the companyBs and competitorsB products. $hese mystery shoppers can even test whether the companyBs sales personnel handle various situations well. Lost customer analysis; companies should contact customers who have stopped buying or who have switched to another supplier to learn why this happened. )ot only is it important to conduct e-it interviews when customers first stop buying, but it is also necessary to monitor the customer loss rate. If it is increasing, this clearly indicates that the company is failing to satisfy customers. $oday, more and more companies are recogni+ing the importance of satisfying and retaining current customers. ?ere are some interesting facts bearing on customer retention;

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#cquiring new customers can cost five times more than the costs involved in satisfying and retaining current customers. It requires a great deal of effort to induce satisfied customers to switch away from their current suppliers. $he average company loses ." percent of its customers each year. # 3 percent reduction in the customer defection rate can increase profits by !3 percent to 63 percent, depending on the industry. $he customer profit rate tends to increase over the life of the retained customer. # satisfied customer tells about the company or product to 3H4 people, but on the other hand a dissatisfied customer tells to .3 to .6 people from his e-perience.

#dding 8inancial Benefits; $wo financial benefits that companies can offer are frequency marketing programs and club marketing programs. 8requency marketing programs /8 Ps0 are designed to provide rewards to customers who buy frequently and H or in substantial amounts. 8requency marketing is an acknowledgment of the fact that !" percent of a companyBs customers might account for 6" percent of its business. #dding social Benefits; ?ere company personnel work on increasing their social bonds with customers by individuali+ing and personali+ing customer relationships. 8ollowing table contrasts a socially sensitive approach with a socially insensitive approach to customers. Aood $hings
Initiate positive phone calls ake recommendations 'andor in language Ese phone (how appreciation ake service suggestions Ese JweJ problemCsolving language Aet to problems Ese ,argon or shorthand Personality problems aired $alk of Jour nature togetherJ

Bad things
ake only callbacks ake ,ustifications #ccommodative language Ese correspondence 9ait for misunderstandings 9ait for service requests Ese JoweCusJ legal language Only respond to problems Ese longCwinded communications Personality problems hidden $alk about making good on the past

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#dding (tructural $ies; $he company may supply customers with special equipment or computer linkages that help customers manage their orders, payroll, inventory, and so on.

17

'?#P$=> C!
#)#LF(I( O8 A=)=>I' 'O P=$I$IO)
'ash 'heque <ifferent $ypes of card 'redit 'ard

'#(?
$he present day in convertible paper money and other credit instruments, which serve, as close substitutes for money called near money are only a recent development. $he paper money /'ash0 was not used circulation before the 8rench >evolution% paper money /'ash0 is a competitor of modern invention plastic money /credit card0. People today are not habituated in plastic money. $he main reason is to use 'ash in transactions are easy acceptability, Aovernment circulation, easily accessible, store value, social preference and reluctant of change new medium /credit card0 rather than cash.

'?=KE=
# cheque is an unconditional written order, advanced by a customer to his bank, to pay on demand a specified sum of money to or to he order of the person named therein or the bearer of the instrument. # cheque is defined by )egotiable Instrument #ct as a bill of e-change drawn on a specified banker and not e-pressed to be payable otherwise that on demand. 'heques came into use in .653. 'rossed 'heque, Bearer and Order cheque are the different form of cheque, hi selling of goods% cheque is used in large transaction like industrial market.

<I88=>=)$ $FP=( O8 '#><

Bank 'ard;
$ransactions card giving a bankBs customersB ability to pay for goods and services at retail merchant, and get cash at bank teller window or at #$ s. # bankcard may be a credit cad, tied to a preCapproved line of credit or a <ebit 'ard, drawing funds from the holderBs checking or saving accounts. # bankcard is also used as identification when cashing a check.

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<ebit 'ardH#ssert 'ard;

# plastic card used to initiate a debit transaction. In general, these transactions are used primary to purchase goods and services and to obtain cash, for which the cardholderBs asset account is debit by the issuer. $here are two types of <ebit cards currently is use in E(#; national <ebit 'ards, such as Cthe @isa <ebit difference is that the national debit cards were designed specifically as retail payment cards% bank debit card were issued first as #$ access cards and later as general purpose transaction cards.

$ravel and entertainment /$ D =0 'ards;

'harge cards used to pay for hotel, airlines and others business related e-pense. <iners 'lub, followed by #merican =-press in .736, issued the first travel card in .73". $ravel 'ard differs from bank credit cards in several ways. $hey typically are 1"Cday charge accounts, with payment due in full before the ne-t billing cycle, the accountholder receives copies of the original sales drafts /called 'ountry 'lub billing0 with the monthly billing statement, and some $ D e card plans, usually corporate cards, gibe the 'H? a quarterly summary of charges to the card.

(mart 'ard;
Bank card containing a computer chip for identification, special purposes processing and data storage. $he computer ship has the ability top perform various computations, such as validating the 'H?Bs PI), authori+ing retail purchases, verifying account balances and storing personal records. # smart cardBs internal memory may also store pertinent information on a consumerBs relationship with a bank, brokers, insurance company or medical history time the card is used. #lso called chip card or memory card.

#$

card;

#n unattended selfCservice terminal activated by a card and cardholder validation method /'@ 0 that providing cash withdrawal. It also may perform other functions including basic banking functions such as accepting deposits, ordering transfers among accounts, accepting, loan payments and answering account balance inquiries.

'>=<I$ '#><;
Physically, credit card is a layered piece of hard plastic with holograms and security features. It also carries a strip of magnetic tape on the back, which is loaded with electronic data including the cardholder details. $he strip in read electronically by speciali+ed machines called Point of (ale /PO(0 $erminals at merchants or #utomatic $eller achines /#$ 0 in bank premises or elsewhere.

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It is developed on the technology of microchips and cryptography, which have bred a new generation of payment system. It is only today that the revolution in information technology has folly hit the area of retail payments. $he 'ard is rectangular, looking rather like the familiar phone card. Its distinguishing feature is that it acts as cash, may be large account being only a small piece of documented plastic. $his is why it is popularly called BPlastic oneyB.

?I($O>F O8 '>=<I$ '#><;

'redit was first used in #ssyria, Babylon and =gypt 1""" years ago. $he bill of e-change C the forerunner of banknotes C was established in the .2th century. <ebts were settled by oneCthird cash and twoCthirds bill of e-change. Paper money followed only in the .5th century. 'hristopher $hornton, who offered furniture that could be paid off weekly, placed the first advertisement for credit in .51". 8rom the .6th century until the early part of the !"th, tallymen sold clothes in return for small weekly payments. $hey were called JtallymenJ because they kept a record or tally of what people had bought on a wooden stick. One side of the stick was marked with notches to represent the amount of debt and the other side was a record of payments. In the .7!"s, a shopperBs plate C a Jbuy now, pay laterJ system C was introduced in the E(#. It could only be used in the shops that issued it. In .73", <iners 'lub and #merican =-press launched their charge cards in the E(#, the first Jplastic moneyJ. In .73., <iners 'lub issued the first credit card to !"" customers who could use it at !5 restaurants in )ew Fork. But it was only until the establishment of standards for the magnetic strip in .75" that the credit card became part of the information age. In the late .72"s, a number of E.(. banks started issuing their customers scrip that could be used like cash in local shops. $he 8ranklin )ational Bank /)ew Fork0C now =#B /=uropean #merican Bank0 C formali+ed the practice by introducing the first modern credit card in .73.. 'aliforniaCbased Bank of #merica e-tended the idea throughout the Enited (tates by introducing the Bank #mericard /now @isa0 in .74" and franchising a single bank in each ma,or city as its local affiliate. $hese affiliates were responsible for signing contracts with merchants to accept cards as payment, as well as enrolling cardholders in their respective areas. #t this time, a group of enterprising E.(. bankers who were not JfranchisesJ of Bank #mericard created their own network by accepting one anotherBs local credit cards. On #ugust .4, .744, the group formed the Interban2 Card $ssociation4IC$5 which later became aster'ard International.

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$he word credit comes from Latin, meaning, JtrustJ. $he first use of magnetic stripes on cards was in the early .74"Bs, when the London. $ransit #uthority installed a magnetic stripe system. (an 8rancisco Bay #rea >apid $ransit installed a paperCbased ticket the same si+e as the credit cards in the late .74"Bs.

8unctions;
/i0 (ingle oney
'redit card can be used in world wide as a (ingle money in transaction with safety. # aster'ard can easily be accessible in subC(ahara or in (iberia.

/ii0 =mergency situation;

In emergency situation /!am0 when there is no money at home credit card can be charge for transaction or cash withdrawal from #$ booth.

/iii0 =Ccommerce;
=Ccommerce is a new business arena in modern world. Buyer and seller can transact in online and sell goods in terms of credit card.

/iv0 Late Payment in $ransaction;

if there is no money at hand now, one can charge credit card. But the amount such transactions have to pay to the bank within a future time conte-t.

/v0 'ash advance facilities;

'redit card can be used to withdraw #$ bank within the credit limit. booth or cash advance facilities from the

/vi0 (ecurity;
It gives more security rather than carrying cash.

/vii0 !2 hours transaction;

'redit card is accessible in transaction within any time of the day

/viii0 (ocial status;

#nybody can pay bill by credit card and it relief him from money counting hassle.

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/i-0 $raveling;
In traveling credit card is the best friend. In some constrains it is not possible to endorse sufficient amount foreign currency. In such situation credit card is the best option.

/-0

oney is the second Aod;

It is said that money is the second Aod. In crisis situation whenever anybody lost his all things in a new place, credit card can relief his hassle because others cannot use it. (o it cannot be robbed. 21

Parties related to 'redit 'ard;

$here are four parties related to credit 'ard. .. 'ard ?older !. Issuer. 1. #cquirer. 2. erchant.

Cardholder:
$he 'ardholder is solicited, screened and approved by the issuer, which establishes a line of credit for the customer and issues the credit card. $he 'ardholder uses 'redit 'ard either to purchase goods and services from a merchant or to obtain a cash advance from a member for which the cardholder receives a monthly bill from the issuer.

Issuer:
$he 'ardholderBs financial institution /usually called the issuing member or issuer0 is a licensed member of aster 'ard andHor @isa. $he Issuer; Issues the card to the approved cardholder >eceives and pays for transactions from aster 'ard andHor @isa Bills and collects from the cardholder $he issuer may also benefit from the services of a third party andHor association in processing information and payments.

$gent !an2s
anaging a credit program is e-pensive and some small financial institutions prefer to offer credit cards to their customers without taking on the complications and responsibilities of becoming an issuing member. $hese small financial institutions can contract to become an issuing agent of an issuing member. $he issuing agent solicits cardholder applicants for the issuer generally through takeCones made available at its branches. $he issuer, in turn, issues the card its name, has the cardholder relationship makes all of the 'redit <ecisions, completely manages the card program. It the agent banks name appears on the card, then the agent bank must be in foliateHassociate member of aster 'ardH@isa IntB .. $he issuer usually keeps most the income from the cardholder account the agent member may or may receive a small compensation for providing the application.

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9hile the issuing agents income this from arrangement is small, it does, retain customers who might take their business elseCwhere if a 'redit 'ard Program were not available at their local financial institution. 9hen the issuing agents name appears on the card it tends to preserve the financial institutionC'ardholder relationship.

$c6uiring
$he acquiring member or acquirer solicits, screens, and accepts merchants into its 'redit 'ard Program. $he acquirer is a member of aster 'ard andHor @isa, and holds a written agreement with the merchant to. #ccept the merchantBs sales slips Provide the merchant with credit card authori+ation terminals, instructions, and contracted support services ?andle and process the credit $he acquirer usually charges the merchant a merchant discount for handling the transactions. $he acquirer is licensed by aster 'ard andHor @isa and agrees to follow the operating rules and regulations of the two associations. aster'ard and @isa provide various services to the acquirer including authori+ation and settlement processing, interchange and resolution of member disputes. any financial institutions are both issuers and acquirer. #s issuer they maintain the cardholder relationship. #s acquirers they maintain the merchant relationship.

Merchant
$he erchant can be virtually any company, which meets the qualification standards of aster'ard andHor @isa and an acquirer. $ypical merchant business includes retail stores, restaurant, airlines, mail order companies, and health plans to name a few. aster'ard and @isa both require that the merchant be financially responsible and of good repute. $he merchant has a written agreement with the acquirer to accept the 'redit 'ards as payment and to abide by the terms of the agreement.

Definition of /arious Credit Card and erms:

Aold 'ard
@isa or aster'ard 'redit 'ard with a ma-imum credit limit of E(< 3"""HC, and frequently higher. $hese cards have a higher annual fee than standard bank credit card, and are marketed to consumers with above average incomes. (ometimes called prestige card or premium cards.

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#lso, #merican Aold 'ard, which differs from bank, issued cards. #merican =-press issues the card, but the credit line is arranged separately, by a bank acting as an agent for the card issuer, and varies among banks. #merican =-press travel >elated (ervices 'o. issued the first gold cards in .744 and has claimed a proprietary right to the name, a claim the court have not upheld.

(ecured 'redit 'ard

# 'redit card backed by a deposit account is issued to marginally qualified borrowers.

#ffinity 'ard
'redit 'ard promoted under a sponsoring agreement between an organi+ation and a cardCissuing bank. In e-change for making available its membership list, the sponsor receives some compensation from the issuing bank, usually part of issuerBs net interest income. $he issuer may waive annual fees for affinity cardholders, or even offer the card at a lower rate than ordinary bankcards.

'oCbranded 'ard
@isa or aster'ard 'redit card ,ointly sponsored by a bank and a retail merchant, such as departmental store. 'oCbranded cards may be issued at less cost than conventional retail private label cards, and give issuing bank access to new customers. 'ardholders may be given incentives, such as discount on merchandise, rebates, or discounts off purchases. # coCbranded card has a tieCin with a specific merchant rather than an association or professional group. It also can be used at other merchant. 'ontrast with #ffinity cards.

Islamic credit card

(hariah laws of contract $hree fundamental principles .. Principles of Gustice !. Principles of transparency 1. Principles of aslah 9hy Islamic credit card: #n alternative mode of payment for uslims to make retail purchases. $o broaden the product offering of Islamic banks $o capture customer and niche market segment. $o compete with conventional banking products

<efinitions; C

<ebit card; # card issued to a customer with available balance in his account. 'harge card; # card that provides a credit facility up to a ceiling but not revolving. 'redit card; >evolving credit.

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Benefits
$o customer C'onvenience C'ash advance CArace period $o the Bank C'ustomer satisfaction CProfit echanism C)etwork acceptance

7"ource: "eminar'Dha2a "heraton8 $ugust 9:8 9::(;

<=8I)I$IO)(
.. #ffinity and 'oCBranded 'ard Program # program created to offer the issuers the opportunity to issue affinity or coCbranded cards as well as lifeCstyle or speciali+ed customCfeature cards targeted at potential cardholders having common interests or membership in an organi+ation. !. #ffiliate ember # type of aster'ard member that participates indirectly through an association of member or a Principal member in the activities of this corporation /for e-ample; by issuing aster'ard cards or by accepting transaction records from merchants0. 1. Bank Identification )umber # unique number, of which the first position is 3, assigned by aster'ard international to identify member transactions and accounts. $he BI) is the first sidigits of a cardholder account number, and it is the second through seventh position of the !1Cdigit acquirerBs reference number. #lso known as the prefi-. 2. Banknet $elecommunication )etwork $he aster'ard worldwide telecommunication network. $he primary Jdata transportJ communications facility that links all aster'ard customers and aster'ard data processing centers into a single online financial network. 3. 'ard @alidation 'ode # twoCpart security feature. '@' . is a 1Cdigit value encoded on tracks . and ! in three contiguous positions in the Jdiscretionary dataJ field of a magnetic stripe on a aster'ard. '@'! differs from '@'. and is indentCprinted into the tamperCevident signature panel on the card. $he '@' is intended to inhibit the alteration or misuse of card data and enhance the authentication of card. 4. 'heck <igit >outine #n algorithm that is performed on the primary account number /P#)0 to ensure that the numbers were not transposed or miss keyed. $he result is the last position of the account number, or check digit.

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5. 'ounterfeit 'ard #n instrument or device embossed, printed, or otherwise bearing aster'ard marks, so as to purport to be a aster'ard card issued by a member or affiliate. But that is not a aster'ard card because the embossing or printing thereon was not authori+ed, or because the aster'ard card has been altered or reCfabricated, even though it was validly issued initially. 6. 'hip # piece of silicon etched with electronic circuits. $he microprocessor chip has an operating, a programming, and a data memory that allows internal processing to take place and provides additional storage capacity. 7. 'hip 'ard /(mart 'ard0 # 'ard with logic capabilities and data storage capabilities to enhance card functionality and security /for e-ample pay telephone cards0 .".= @ # ,oint pro,ect started in .771. $o define global specification for chipCbased credit and debit cards. $he = @ specifications are divided into three partsC card specification, terminal specification, and application specification. $he latest version of = @ is known as = @!""", Integrated 'ircuit 'ard (pecification for Payment (ystem, @ersion 2." <ecember !""".

!usiness Card In $merica:

Below are credit cards tailored especially for businesses; 8leet Platinum @isa Business 'redit 'ard (ave with a "L introductory #P> on purchases and balance transfers for up to simonths, and a low variable rate, currently .".77L, on purchases and balance transfers thereafter. Aenerous credit line up to M3",""", online account access, discounts on business products and services, free additional cards for employees, and more. #dvanta Platinum Business aster'ard )o annual fee credit card especially for small businesses. Offers credit lines up M."",""". Aet a "L #P> on purchases and balance transfers for the first 7 months you have the card. Blue for Business from #merican =-press/r0 Blue for Business from #merican =-press works much like a traditional credit card with revolving credit line. It offers a !.7L introductory #P> for 4 months, then a fi-ed ...77L fi-ed rate afterwards. Enlike most #me- cards, there is no annual fee, and you can e-tend payments over time. #lso offers business discounts at 8ed=-, ?ert+, ?ilton ?otels, obil and more. Of course, it also e-tends the perks #merican =-press is known for, such as travel accident insurance, car rental insurance, baggage loss insurance and more. #merican =-press/r0 Business Aold 'ard $his card offers basically the same features as the Blue for Business card above, although it has a little different payment arrangement. Like most #merican =-press

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cards, you pay off your balance monthly, unless you use the Business 8le- program, which lets you draw out payments over time, but at a higher #P> than the card above.

0&$ ,R&" O0 $- ID&$) CR&DI C$RD#O)D&R

8rom the point of view of the bank an ideal credit cardholder is the one having following features; Eses the card e-tensively for purchasing merchandise and services, thus generating service charge revenue. akes use of the credit aspect of the card ideally by perpetually keeping his or her credit limit near ma-imum, thus generating interest. akes large infrequent purchase, thus reducing processing costs per transaction. Is not delinquent in making the minimum monthly payments and did not default and thus reducing bad debt losses.

CR&DI C$RD I- !$-+)$D&"#

In Bangladesh three banks have already introduced credit cards. $hese are Prime Bank, )ational Bank, (tandard 'hartered Arindlays Bank, #merican =-press Bank issues charges cards only. @ery recently Ganata Bank a nationali+ed commercial bank in Bangladesh has also came up with its own smart card called J>eady 'ashJ. # good completions swiftly growing up and it is e-pected that more banks national or international Aovernment or private will enter the new place of business. (tandard 'hartered Arindlays Bank took a pioneering role in introducing credit cards in Bangladesh. It started acquiring @isa and aster'ard nearly ." years back. In the first few years its operational area was very limited and concentrated only at the large hotels and restaurant. In .775 the bank decided to launch fullCscale card operation and very realistically brought a wide range of people under is service systems. It is now giving a wide range of card services thorough multifarious quality facilities. (tandard 'hartered Arindlays Bank issues only local credit card. It has @isa (ilver, aster'ard (ilver and aster'ard Aold. Prime Bank Limited obtained Principal embership of aster 'ard International in the month of ay .777. 9ithin a period of si- months, the bank successfully launched aster'ardC'redit 'ard, which created a new dimension on its customer service and consumer financing. Prime Bank Limited is planning to e-pand their card facilities even further so that more and more people can be benefited from both the emotional and functional needs.

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)ame of the Institutions )ational Bank Ltd. (tandard 'hartered /Arindlays0Bank Prime Bank Limited @anik Bangladesh Ltd. <haka Bank Ltd. $otal

=stablishment Period arch, .775 arch, .77 )ovember, .777 arch, .776 #ugust, !"".

Brand aster'ard aster'ard /I"$ aster'ard @anik @anik

'redit base 7""" ."!""" ."3"" 63"" 2""" .12"""

card

arket Proportion /L0 4.5! 54..! 5.61 4.13 !.76 .""

)ational Bank burst into the world of credit card in October .775. It has Aold international and Aold local and (ilver international and (ilver local. )ational Bank Limited first issues International 'ard in our country. $hey started to issue local cards in the year of October .777. @anik a (ri Lanka C Bangladesh ,oint enterprise has also come forward with its won credit card service in recent time. It has started its operation in the year .776. $hey have their own card called @anik 'ard% one is known as Aold another is 'lassic. ore and more people are getting interested in credit card facilities. $o observe the success of the credit card operations of other banks, Premier Bank Ltd, Gamuna Bank Ltd., $he 'ity Bank Ltd. and (outheast Bank Ltd have taken measures introduce their own cards.

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'?#P$=> C1
#)#LF(I( O8 8O>
aster'ard @I(# @anik

'OPP=$I$O>

aster'ard embership;
aster'ard is an association nearly !!,"""Cmember financial institution worldwide. #s part of its role in partnership with its members, aster'ard performs such central functions as; 'reating global and regional marketing programs and promotions to support the aster'ard brand Providing e-pert systems including secure, reliable, stateCof the art transaction processing <eveloping new products, services and technologies (etting and enforcing politics and standards for card use acceptance

Benefits of

aster'ard

embership;

Payment cards are a proven means of generating profit and strengthening customer relationships. #dditional benefits of aster'ard membership are access to; CC $he known and globally accepted aster'ard brand #n integrated product and service offering that can customi+e to appeal to different types of customers >eliable and costCeffective transaction processing

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Operation
Banknet $elecommunication )etwork;
Banknet, a global aster'ard telecommunications network, lets you communicate with other members and with aster'ard. It is used primarily send and receive B authori+ation, clearing and settlement transactions.

29

$he

aster'ard Banknet provides the following benefits; N 8le-ibility, through an adaptive and reactive renting network >eliability, through rerouting capabilities and back up facility =fficiency, through a peerCtoCpeer architecture and pack letCswitching =-pandability with redesign Intelligence of a distributed network. (peed /average !..C second response time0

protocol

"tandard $uthori<ation %rocess:

?ere is the standard stepCbyCstep procedure for authori+ing the use of a aster'ard card. (tep .; $he cardholder gives the card to the card to the merchant (tep !; $he merchant starts the authori+ation process by either placing a call to acquirer or its agent entering the transaction into PO( terminal (tep 1; $he acquirer host computer system sends an authori+ation request message to the Banknet network through the acquirer IP (tep 2; $he Banknet network sends the authori+ation request message through to the issuer IP. $he issuer host computer / aster'ard Interface processor0 (tep 3; $he issuer host computer processes the authori+ation request and sends an authori+ation request response (tep 4; Banknet routes the response to the acquire agent or its agent, (tep 5; $he acquirer or agent delivers the response to the merchant

"tandard $uthori<ation 0low

'ard ?olders

erchant astercar d Banknet (witch Issue r ?ost

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#cquirer ?ost

I P

I P

30

In its authori+ation request response, the issuers can advice the merchant to take one of the following actions; #pprove <ecline 'apture 'ard >efer to 'ard Issue

'ard Program Business

$here are two categories of payment card business; issuing and acquiring. any aster'ard members participate in both categories. $n issuing member 4issuer5 handles all aspects of the cardholder relationship, including solicitation of cardholders and maintenance of cardholderBs account. $n ac6uiring member 4ac6uirer5 assumes the responsibilities of the merchant relationship, including merchant acquisitions and transactions settlement.

Issuer information need;

balance. their products. =stimated number of cardholders. Pro,ected transaction volume and monetary amount. =stimated proportion of cardholders who will revolve their account #ppropriate interest rate and annual fees. Products needs within your market. #ppro-imate number of people who will apply for quality for, and use 'urrent market competition. 'ost of conduct card business. Pro,ected interchange and others sources of revenue. Pro,ected profit.

#cquirer information needs;

)umber of visitors of the to the geographic area and their country of origin =stimated demographic spending =stimated number of merchants #verage value of individual goods and services #verage customer purchase 'ompetitorsB merchant discount rate possibilities of renting selling pointC ofCsale /PO(0 equipment Legal issues arket potentials #verage interchange and other cost #vailable technology 31

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Issuer income;
8ee income #nnual fee (upplemental card fee 'ash advance fee Late payment fee #ccess limit fee Insufficient fund fee =nhancement fee erchandising income Interest income; Billing date calculation #verage daily balance calculation Posting date calculation Interchange Income; International <omestic On us transaction 8oreign e-change income

'ard Issuance =-penditure;

'ost of funds Losses 8raud 'redit Operation and services $ransactional fees 'ash disbursement accommodation fee Banknet access fee #uthori+ation service charge

#cquire income
erchant discount rate 'ash disbursement accommodation fee >ental H sale or equipment and supplies 'ost of fund

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#cquirer business e-penditure

Interchange fee 'ost of fund Operation and processing e-pense erchant marketing and services

32

Losses 8raud 'redit

'ardholder decision factors;

/i0 Price /ii0 Aeographical convenience /iii0 International acceptances /iv0 Bank affiliation H loyalty /v0 =nhancement H card product differentiation /vi0 'redit policy

erchant decision factors;

/i0 Aeographical convenience /ii0 Loyalty /iii0 Pricing /iv0 Payment scheduling and timing /v0 'redit arrangement /vi0 (ervice and support /vii0 #dditional service.

%roduct
(= MasterCard Card: $his generalCpurpose payment card offers unsurpassed global acceptance, letting customers purchase goods and services at participating merchants. !. +old MasterCard Card: $his product targets an upscale market and delivers increased profitability as a result of greater frequency of use, higher spending, and larger average outstanding balance 1. MasterCard !usiness Card: $his card offers members incremental revenue and relationship with corporate clients with members. 2. Co'!randed and $ffinity %rograms: $his programs help issuer to segment to market and gain additional customers to incremental volume. 3. MasterCard ravelers Che6ues: (old by members and through $homas 'ook network locations around the world, travelersB cheques give consumers a secure, convenient alternative to carrying cash. 4. Maestro %O" Debit %rogram: $he only global, online pointCof sales /PO(0 debit service with a single, unifying acceptance mark and brand% aestro provides cardholders a payment alternative to cash or cheque that is quick, convenient and secure.

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"ervices:
(5 MasterCard>Cirrus $ M -etwor2 # single network distinguished by the aster'ard and 'irrus marks, it offers worldwide cash access !2 hours a day, 143 a year, at #utomatic $eller achine /#$ 0 that permit cash withdrawals and other bank services. 95 %riority Cardholder "ervice: $hese are the Lost and (tolen 'ard >eporting /L(>0, =mergency 'ard >eplacement /='>0, and =mergency 'ash #dvance /=A#0 service, which protect all aster'ard cardholders against improper use of their cards if their cards are lost or stolen, and provided critical assistance. ?5 Master card global service: $his will be a costCeffective telecommunications based service that makes emergency assistances for cardholders traveling outside their country more accessible. @5 he MasterCard> homas Coo2 $lliance: Provides cardholders with access to routine and emergency travelCrelated service at $homas 'ook travel and bureau- de charge locating worldwide. A5 Card &nhancement service: 'ard enhancement provides valuable advantage and convenience for cardholder, offer members tools to ma-imi+e a portfolioBs and build brand preference. $hese services include aster #ssist $ravel #ssistance (ervice aster Phone $elephone (ervice Product and (ervice Positioning.

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/I"$ C$RD
($#)<#>< '?#>$=>=< I)$=>)#$IO)#L @I(# '>=<I$ '#>< L#E)'? @I(# 'ard; #ugust !""!

%ROD,C
@isa 'lassic @isa Aold

-,M!&R O0 C$RD
1",""" /Both classic and gold0

%&R MO- # C$RD I"",&D

#verage .,""" cards% in the year !""" ('B issued about .!,""" cards.

I"",$-C& > &)I+I!I)I . CRI &RI$

'ardholder between the age of !. and 5" 'ardholder is a Bangladeshi national #gainst >8'< #ccountO Balance /to be kept under lien0 #gainst =-porterBs >etention Kuota 8'F #ccountO Balance /to be kept under lien0 aintained in any Bank. 'ard cannot be issued to more than top 1 e-ecutives of any e-porting firm. #ll cards issued to the top e-ecutives of an e-porting firm must be taken from only one issuing bank.

'>=<I$ LI I$
'ard $ype @isa 'lassic /2!41540 @isa Aold /2!41560 inimum Limit E( M 3"" E( M 3,""" a-imum Limit E( M 2,3"" E( M !","""

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LI=) # OE)$
'ard $ype @isa /2!41540 'redit Limit 'lassic E( M 3"" Lien #mount E( M 334 L$@ 7"L

35

E( M !,3"" E( M 2,3"" @isa /2!41560 Aold E( M 3,""" E(M .",""" E( M !","""

E( M !,556 E( M 3,""" E( M 3,334 E(M ..,..! E( M !!,!!1

7"L 7"L 7"L 7"L 7"L

0&$ ,R&" > !&-&0I "

9orldwide recognition and acceptance #ccepted in more than .3" countries around he world including Bangladesh. #ccepted at over .6m establishments worldwide including 1,""" merchant in B< #ccepted at over 334k #$ s worldwide displaying the @isa log #ccepted at over 176k visa member offices worldwide. =asy and fle-ible credit and repayment options a-imum 23 days interest free period onthly minimum repayment of 3L or E( M.", whichever is greater Instant cash advance up to 3"L of the credit limit.

"ervice B %rice +uide

International @isa Aold International @isa 'lassic

+eneral
C Payment due date .3 days .3 days from statement date P inimum amount due 3L or M." whichever is higher P 'ash advance 3"L of credit Limit P a-imum interest free 23 days 23 days days available /incase of .""L payment of current balance on or before due date0

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International @isa Aold 0ees P P #nnual 8ee /E( M0 #nnual fee for (upplementary card /E( M0 P 'ard replacement fee /E(M0 .!"."" 4"."" .3."" 36

International @isa 'lassic 5"."" 13."" .3."" /per card0

Other fees B charges 4all cards5 8inance charge on all transaction types, calculated from statement date till repayment date /calculated on average daily balance method0 !.3L per month /1" days0 Over limit charge /E( M0 .3."" .3."" Late payment charge /E( M0 .3."" .3."" /If minimum due is not paid within <ue <ate0 <uplicate statement /E(M0 3."" 3."" >eturned cheque /E(M0 .3."" .3."" Outstation cheque processing /E( M0 ."."" ."."" 'opy of sales voucher /E(M0 .3."" .3."" /up to a ma-imum of 1 months0 'ertificate charge /E(M0 .3."" .3."" 'ash #dvance fee !.3L !.3L

"afe and secure

PhotoCsign feature 'ardholder protection in case of lossHstolen report !2Chour customer service (upplementary cards 8our supplementary cards on one account (eparate spending limits for supplementary card/s0 >eplacement of only supplementary card/s0 in case of lost H stolen Hdamage.

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/$-I*
@anik a (ri Lanka C Bangladesh ,oint enterprise has also come forward with its won credit card service in recent time. It has started its operation in the year .776. $hey have their own card called @anik 'ard% one is known as Aold another is 'lassic. It has now 7""" /#p-.0 cardholders in credit card market.

/ani2' Dha2a !an2

<haka Bank has introduced new products like 'redit 'ard, #$ 'ard and #utomatic Phone Banking service in selected branches in recent years. <haka Bank 'redit 'ard has earned wide acceptability and reputation within a very short time. $he bank has developed the process such mat it can deliver the 'redit 'ard within only seven days against security; for unsecured card it takes only ten days. It has also networked at all branches in <haka, 'hittagong, (ylhet, )arayangon, and (avar. $o offer any branch banking facility for the convenience of the customer. <haka Bank at a Alance; Opening of the 'ard Business #ugust !"". ?uman resource =-ecutive C1, )onCe-ecutive C6 'ard Base; 2""" /2"L Aold 'ard and 4"L 'lassic0 Per month Issued 'ard; !1" /#verage0 'redit Limit; $k. .",""" to 27,""" Q 'lassic 'ard $k. 3",""" to .,"",""" Q Aold 'ard 'ustomer Positioning; Bill payment in Petrol Pump, and #uto <ebit facility /Arameen Phone, 'itycell0. $hey are also going to deal with )orth (outh Eniversity where the students will pay their fees in @anik 'redit 'ard. arketing #ctivities; !"L of their income from 'ard goes to marketing e-pense. $hey have .3 <(#s and card selling through branch is one of their main 'ards selling effort. $hey e-pand a large share for advertising of 'ards.

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'hapter 2
#)#LF(I( O8 I)<E($>F 'O P=$I$O>
P )ational Bank Limited P (tandard 'hartered Bank P Prime Bank Limited

)#$IO)#L B#)R LI I$=<

=stablishment and Operation;
)ational Bank Ltd. has been established in .761. It is working as a wellCestablished reputed commercial bank in Bangladesh. # long termed vision governing body and skilled human resources is the main reason to get this position. 'hairman ; #bu $aher anaging <irector ia

; >afiqual Islam Rhan d. #bdur >ahman (arker

'ompany (ecretary ;

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Ob,ective;
$o ma-imi+e the facilities to the client and shareholders in systematic way =-pand the multinational service in economic sector to reach the mass people $o ensure the ma-imum utili+ation of manpower by increasing efficiency and growth of productivity $o encourage saving attitude in different classes in the society $o gain confidence by easing the international transaction in internal trade #naly+ing the realistic demand by consumersB needs and provide short and longCterm finance. $o activate the capital market by facilitating the banking system Etili+ing the latest technology for the best service to the customer. $o bring and strengthen banking discipline and thus creating the longCterm compatibility with the customer by giving the best service $o improve the corporate image in home and abroad. Present 'ompany 8inancial Position at a Alance; /$k. million0 9::A .""".". 21".!7 1!63.". !!46.2; 2"".4 2651!.. in

.ear #uthori+ed 'apital Paid up 'apital Income =-penditure )et Profit before $a#ssetsH Liabilities

9::9 ."""."" 174..4 .6"6.44 .2"5.47 2"".75 114.5.3"

9::? ."""."" 21".!5 .65..32 .445.73 !"1.37 14323.!6

9::@ ."""."" 21".!5 !766.7" !"42.53 111.53 25.26."6

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Branches; 53 all over the country

40

'ard <ivision;
i. =stablishment; arch .775 ii. ?uman >esources; a. =-ecutive b. )on =-ecutive c. $echnical $otal iii. 'ard Base; a. Aold 'ard b. (ilver 'ard $otal 'ard iv. $rend #nalysis; .ear Issued 'ard (urrendered 'ard Income from 'ard /in million $k.0 arketing =-penditure /Lof income0 PO( achine /no0 9::9 !""" 21 23."" ." !" .!3 9::? !5"" 36 73."" 3 !." 2!3 9::@ .2"" 41 63."" ! 1!3 5""

; 1 ; 15 ; 1 ; 21 ; !""" ; 5""" ; 7"""

erchant iii. $arget People to be served;

ainly salaried person Income $k. ."""" or more selected for silver card, if other thing remain same. ore than $k. 33""" or more selected for gold card. 8or international card the prospect cardholder have to open a >8'< account 'ard is issued in security basis. iv. 'ustomer Positioning; Price and 'ompetitive offering is the key focal point of offering. )BL card has the following options;

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 $cceptance: #n international aster'ard from )ational Bank Limited is accepted at million of establishments across the world and home including 3Cstar hotels, restaurant, departmental store and establishments offering diverse services. "ecurity: 9hen a )BL aster'ard holder automatically covered under Personal #ccident Insurance against loss of life for as high as tk. 3 lakh in case of air travel free of cost. Credit Cushion: It has revolving loan facility. Fou can avail a free credit facility from .3 days if you settle your full dues within payment due date. In Case of )ost Card: If a 'ard holder lost his card he have to report to the 'redit 'ard <ivision and they will provide a replacement card on payment of prescribed fees. 'ard <ivision is open !2 hours a day, 143 days a year. "upplementary Card 0acility: # 'ardholder can get supplementary card for his relatives. $he e-pense of supplementary card will charged to the account of principal cardholder. Cash $dvance: 'ash drawing facility through approved channels is available in some cases to meet your emergency requirement at a prescribed fee. -eed not %ay 0luffy at a ime: )BL gives the opportunity of being fle-ible in repayment schedule suiting to convenience of cardholders. -o Interest or Charges: Payment in full within the payment due date and en,oy a free credit facility from .3 days to 23 days. vii. erchant 'ommission; !L to 1L /average !.6L0 on agreement basis. viii. arketing #ctivities; a. )umber of <(= ; )il b. #dvertising =-p. ; 3L c. erchant arketing; 1 people )BL maintain strong personal relation with its cardholders and merchant by giving prompt and customi+e service. $hey believe relationship marketing is key success to gain customer loyalty.

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" $-D$RD C#$R &R&D !$-*

=stablishment and Operation; $he early years;
(tandard 'hartered is named after two banks when merged in .747. $hey were originally known as the (tandard Bank of British (outh #frica and the 'hartered Bank of India. #ustralia and 'hina of the two banks, the 'hartered Bank is the older having been founded in .631 following the grant of a >oyal 'harter from Kueen @ictoria.

(tandard 'hartered today;

$oday (tandard 'hartered is an international bank focused on the merging markets in which it has worked for over ."" years in #sia, #frica, the iddle =ast and Latin #merica. It has a network of over 3"" offices in more than 3" countries, and its headquarter is in London.

In Bangladesh;
$he 'hattered Bank opened in 'hittagong in .726, which was, at the time, the eastern region of newly created Pakistan. $he branch was opened mainly to facilitate the postC war reCestablishment and e-pansion of (outh and (outh =ast #sia. $he Bank opened its first branch in <haka in .744 and shifted its headquarter from 'hittagong to <haka after the birth of >epublic of Bangladesh in .75.. #t present, the bank has !6 branches over the country by acquiring #)S Arindleys Bank /!"""0.

Ob,ective; @ision;
& $o be renown as the top performing banking group serving #ustralia, )ew Sealand and in the international market.*

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ission;
(tandard 'hattered bank credit card division mission statement states, J $ouch the powerJ ('B is a banking and financial services group that aims to be an outstanding financial institution providing a broad range of services in the banking and nonCbanking financial sectors.

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@alues;
$he Bank holds the following values; $o have a strong customer focus and to build a relationship based on integrity superior services and mutual benefit. $o strive for profit and sound growth. $o work as a team to serve the best interest of the group. $o work for continuous business innovations and improvements. $o value and respect people and make decisions based on merits. $o provide recognition and rewards on performance.

Branches; .6 all over the country. 'ard <ivision;

i. =stablishment; arch .773 T#)S Arindlays BankU ii. ?uman >esources; a. =-ecutive ; !4 b. )on =-ecutive ; 1"" c. $echnical ; ! $otal ; 1!6 iii. 'ard Base; a. Aold b. (ilver ; ."""" ; 4"""" ; 5"""""

$otal
iv. $rend #nalysis; .ear Issued 'ard (urrendered 'ard Income from 'ard /in million $k.0

9::? 4""" .!" .!"."" !"L !!" .2""

9::@ ."""" !"6 .5"."" ."L 13" !.""

9::A 16""" 1!" 1""."" .3L 3"" 13""

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arketing =-penditure /Lof income0 PO( achine /no0

erchant

$able; #nnual >eport of (tandard 'hartered Bank

44

v. $arget People to be (erved; "egmentation profile: Aeographic; Primarily located in ma,or urban areasH centers of the country i.e. <haka, 'hittagong, Rhulna, and (ylhet. <emographic; $ge: Income: &ducation: .6 to 5" years onthly minimum .","""."" andHor above Araduates

Profession; =-ecutives, govt. officials, defense personnel, housewives, entrepreneursH businessman. Psycho graphic; )ife style: obile, sociable high achievers, motivated by status, style conscious, e-posed of international media Hlifestyle, =nglish is first language after Bangla. #ttitudeCaspiration attracted to international offers, progressive, independent. v. Operational (tructure of 'ard (ervice <ivision; $he 'ards (ervices <ivision /'(<0 has si- units namely, >isk #ssessment, 'ollections, erchant (ervices, Operation (ervices, Issuing (ervices continuously corking on improvement and wide acceptance of (tandard 'hartered cards. # manager who reports directly to the ?ead of 'ards heads each of these units. $he ?ead of 'ards is responsible for overall operation of '(<. # sales team known as <irect (ales #gents, work alongside these units to build up the customer base.

a= Ris2 $ssessment:
It is the section where the applications for new cards are received or limit enhancements are approved. $his department determines eligibility of the applicants on the basis of the information provided by the applicant with the relevant documents. 8or e-ample, if the applicant is a service holder then heHshe has to submit hisHher salary certificates, on the other hand, if heHshe is a businessperson then heHshe has to submit income ta- return certificate. On the Basis of these documents, the risk assessment department screens out those applicants who are not eligible. $his department uses the services of a consultancy firm /third Party0 to assist in the verification process. Once the applicant is selected to be eligible for a credit card, an initial credit limit is set. $his limit is e-tended on the basis of customer instruction after si- months of use and is supported by the customerBs financial capability.

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b. Collection:
$his department deals with the collection process. $he collection process of credit card starts when the cardholder has failed to meet on or more contractual payments /i.e. minimum ."L payments0 or e-ceeds the allocated credit limit or both in which case the cardholder becomes a delinquent. It therefore becomes the duty of the collections department to minimi+e the outstanding delinquent receivable and credit losses. $he collection process involves the following; (ervices /updating status0. Issues bills to customers and remind them the due date of payments. Locates and reminds defaulters of their obligations. Legal enforcement in case of grosses default.

c= Merchant "ervices:
$ merchant is a shop, outlet, hotel or restaurant that accepts credit card. $his department, also known as #cquiring <epartment, brings in new merchants to e-pand the business of the credit cards. $he basic ,ob of this department is to encourage the sellers to accept the credit cards and if they agree they become merchants of (tan chat. $his department also takes up promotional activities to boost up the transactions at the merchant stores and sets up PO( terminals to make credit card transactions easier and quicker.

d= Operational "ervices:
Basically this department deals with the payments and data submission related to the credit cards. 8or each transaction the Operations <epartment processes the customer sales, prepares the bills for the customers, gives authori+ation to the merchants about the acceptability of the cards, deals with e-cess usage beyond credit limit and arranges to settle payments to the merchants. #mong other tasks this department also prepares warning bulletin for merchant to prevent fraudulent transactions and take actions against any such case.

e= Customer "ervices:
'ustomer (ervices department deals with customers in the following manners; Issuance of approval letters, decline letters, renewed letters, replacement letters and enhancement letters. Issuance of credit cards and personal identification numbers /PI)0. Issuance of renewed and replacement cards and PI)s. #nswering customer queries. itigating discrepancies regarding billsHpayments. ?andling customer instructions such as reporting lost card.

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f. Issuing "ervices:
$he Issuing <epartment of '(< has the responsibility and accountability of issuing debit cards for account holders while providing services through )igh D <ay Banking. <ebit card is a plastic card by a bank to enable its customers with checks accounts to pay for goods and services at certain retail outlets by using the telephone network to debit their check accounts directly.

46

Presently the 'ards (ervice <ivision /'(<0 of (tanC'hat bank is issuing debit card known as #''=(( 'ard. $he Bank has installed #utomated $eller achines /#$ 0 almost two years ago for the benefit of its debit cardholders. 8rom the #$ debit cardholders can withdraw cash withdraw cash against their account at any time of the day or night. #t present /Gune !"""0, (tanC'hat has issued around 33""" debit cards for its account holders. vi. 'ustomer Positioning;

#ccording to the management the core features involves 1 'Bs ' C clean leading ' C convenient ' C cash advantage (tandard chartered credit 'ard comes with a winning combination of valueC packed features and benefits.

9ide acceptance;

(tandard chartered 'redit 'ard is accepted at more than 1,3"" outlets around the country.. Fou can use your 'ard for everyday purchases as well as for high value purchases. Our wide range of merchants include hotels, restaurants, airlines B travel agents, departmental stores, hospitals and diagnostic centers, ,ewelry shops, electronics and computer shops, leather goods, mobiles and internet service providers and many more. $his number is increasing everyday to cater to your growing needs.

=asy 'redit

9ith (tandard 'hartered 'redit 'ard you have the convenience to pay as little as 3L of your outstanding on the 'ard account every month, thus having the power and fle-ibility to plan your payments.

Instant 'ash #dvances

(tandard 'hartered 'redit 'ard gives you access to cash up to 3"L of the credit limit. Fou can withdraw cash advances from all (tandard 'hartered #$ Bs around the country, thus having access to cash !2 hours a day. Besides, cash advance can also be taken from any of our branches across the country.

(afe and (ecure

Fou do not need to carry cash anymore if you are carrying (tandard 'hartered 'redit 'ard. If you loose your card, you are protected against financial charges from the moment you report the loss to us.

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#ir #ccident Insurance

$he (tandard 'hartered 'redit 'ard gives you free air accident insurance coverage upto $k. ."",""" /for (ilver 'ard0 or $k. 3"",""" /for Aold card0. $his coverage is also applicable for supplementary 'ardholders.

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(upplementary 'ard

Fou may apply for (upplementary 'ard/s0 for your spouse, parents, sisters, brothers, friends or children over .6 years of age. #ll charges incurred on the (upplementary 'ard/s0 are reported on he monthly statement. Besides, for your peace of mind you can assign monthly spending limit on each supplementary 'ard.

8inancial security in times of need

(afety )et is designed to cover the cardholderIs credit card outstanding balance when he is unable to meet financial liabilities due to permanent total disability or death. Ender these circumstances, the outstanding balance on credit card account will be waived. vii. erchant arketing 'ommission; # merchant is a shop, outlet, hotel or restaurant that accepts credit card. $his department, also known as #cquiring <epartment, bringing in new merchant to e-pand the business of the credit cards. $he basic ,ob of this department is to encourage the sellers to accept the credit cards and if they agree they become merchants of ('B. $his department also takes up promotional activities to boost up the transactions at the merchant stores and sets up PO( terminals to make credit card transactions easier and quicker. Initially, the BankIs cards market was very small with only !7 merchants. 'urrently, the total number of merchants is around 13"". 'ommission is set up on agreement with merchant in bargaining system. It varies merchant in reputation and volume of sales. $he rate falls from ..33 to 2L. viii. arketing #ctivities; a0 )umber of <(= ; .3" b0 #dvertising =-p. ; ."L c0 erchant arketing;3 People.

#dvertising;

#wareness and intention development through advertising in print media, sign and billboard.

Public relation;

('B maintains a good public relation with valued 'ardholders and merchants /?otel Pan Pacific (onargaon0

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(pecial promotion Offer;

$he bank offer special to the cardholders time to time. (uch asC <iscount 3L to !"L in various renown restaurant and first food steres, i.e. 'hillis 'hineses D$hai >estaurant, La @illa, >oyal Orchid, ?ot ?ut, (a,na, (antoor, ?otel #graba etc.

48

 <iscount in payment in 8ive (tar ?otel i.e. ?otel Pan Pacific (onargaon /!"L0 <iscount in payment in air ticket i.e. alaysia #irlines (pecial offer package tour at discount (pecial gift for the bonus point cardholders. #ir insurance <iscount in different promotional period. i-. Innovation; (tandard 'hartered is going to market a special card, which have three facilities in a single card /<ebit, 'redit, #$ 8acility0. $hey found that there is a demand of the proposed card in Bangladesh and the cost of production will vary significantly.

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%RIM& !$-* )IMI &D

Background of the 'ompany;
$he present day banking structure has evolved over several decades. $he farCreaching program of economic reform is being carried out at present towards efficient utili+ation of scarce resources and the development of private entrepreneurship. hi a fast changing business environment, financial intermediaries are gradually being left to be guided by market forces rather than regulation. 'ompetition is strengthened by the entry of new and innovative providers of financial services through the development of oney arket and 'apital arket. Ender the ongoing financial liberali+ation program, Prime Bank Limited emerges as a bank in private sector to operate in the commercial arena of Bangladesh. Prime Bank Limited was established on .5 th #pril .773. It is a fall licensed scheduled 'ommercial Bank set up in the private sector in pursuance of the policy of the Aovernment to liberali+e Banking and 8inancial services. $he Bank has made significant progress within a very short period owing to its competent Board of <irectors, dynamic anagement and introduction of various customer friendly deposit and loan schemes. PBL achieved to be one of the #C grade banks in the year .775 as per '# =L /'apital, #sset, anagement, =arnings and Liquidity0 rating according to Bangladesh Bank.

Ob,ective of PBL;
@ision $o be the most effective bank in terms of customer service, profitability and technology application ission PBL mission statement states, J Bank with a differentJ Prime Bank is a banking and financial services group that aims to be an outstanding financial institution providing a broad range of services in the banking and nonC banking financial sectors. 'ontinue improvement in our business policies and procedures 'ost reduction throw integration of technology at all levels =fforts and 8ocused On delivery of quality service in all are of banking activities with the aim to add increased value to shareholders investment and offer highest possible benefits to the customers.

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 (trategic Priorities $o have sustained growth, broaden and improve range of products and services. @alues $he Bank holds the following values; $o have a strong customer focus and to build a relationship based on integrity superior services and mutual benefit. $o work as a team to serve the best interest of the group. $o work for continuous business innovations and improvements. $o value and respect people and make decisions based on merits. $o provide recognition and rewards on performance.

'orporate Profile
>egistered office ; #dam,ee 'ourt #nne- BuildingC! . .7C.!", oti,heel 'H# <hakaC.""", Bangladesh 'able ; P>I =B#)R Phone ; 7345!43,735"525C6 P#BV $ele; 42!237 P>I = BG 8a; 66C"!C7345!1", 734"755, and 7344!.3 =Cmail ; PrimebnkWbangla.net 9eb site ; www.primeCbank.com (wift ; P>BLB<<? 'hairman ; Ka+i (aleemul ?uq anaging <irector ; (hah,ahan Bhuiyan (ecretary ; anash Rumar Ahosh #uditors ; ?oda @asi 'howdhury D 'o. ?awlader Funus D 'o 'hartered #ccounts 'hartered #ccounts

'urrent Position

Prime bank Limited is a fast growing private sector Bank and the Bank is already at the top slot in terms of quality service to the customers and value addition for the shareholders. $he Bank made satisfactory progress in all areas of business operation in !""!. <espite difficult circumstances, the Bank closed the year with a number of achievements. $he Bank further e-panded and consolidated its customer base in both of its core businesses and retail banking. $he Bank retained its lead positing with the capital adequacy ratio of .!.21L as on <ecember end !""!, which is well above the stipulated requirement of 6L.

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$he return on assets />O#0 was 1.51L well above the industry average, during the year under review, the network of branches increased to !5 with a branch at adhabdi to focus on rural development and deepen our stake in agricultural sector. 9e are very selective in locating branches so that customers can be better served. $his year we have already planned to add a few branches to our network, which will give the Bank strategic advantage in terms of operation and business potential. In !""!, the Bank consolidated its position and retained its product line and financial services aimed at various target groups. In a challenging market conditions, the Bank continued to provide more innovative products and better service to retain the market share. /in million $k.0 F=#> #uthori+ed 'apital Paid up 'apital >eserve 8und =quity 8und <eposits Loans D #dvances Investment Income =-penditure )et Profit before $a8i-ed #ssets #ssetsH Liabilities )umber of =mployees >eturn on #sset /L0 9::( ."""."" 3""."" 14!.7! .!36.!4 .1!37.65 7"52.72 .51".52 ..""..2 226.14 5"3."7 .52.!5 .3514.72 4.1 1.16L 9::9 .""" 4"" 226.71 .3!4.2. .47"!.!7 .!464.63 .774.!1 ..74.!" 37!.!6 474.62 !.6.3" .7136.71 51" !.16L 9::? .""" 5"" 4"!.67 .56..64 !"261.!1 .427!.!! !527.5. .371.47 37!.!6 547.7. !43..5 !2!27..1 555 ..5!L 9::@ .""" .""" 6.3.67 !!17.6" !6"47.!2 !1!.7.45 1"61.6. .75".15 6!2.!1 ."42.!2 1!..46 1!14..4! 672 !..4L 9::A 2""" .2"" ."33.76 !6"6."" 14"!!.24 1.7.4... 1717.3" !2"4.21 664."7 .!"".61 15!..! 2.3"4.!7 ."!2 ..32L

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0ig: Current financial position at a glance 4"ource: $nnual report8 9::A5

52

$sset and )iability committee 4$)CO5

$he management of BankBs asset and liability is managed by #L'O at ?ead Office. $he committee generally maps the strategy for liquidity management, reduction of interest rate risk, market risk and maturity gap. In addition, #L'O provides the Bank continued access to different funds including inter bank fund so that liquidity risk is low. $he pricing policy for different kinds of liability and asset is also determined in this committee. $he Bank ensures its available funds to meet obligation of maintaining (tatutory Liquidity >atio /(L>0 and investment of liquid assets in a profitable manner. #s on 1.st <ecember !""3, PBL had property and assets of $k. 2.,3"4.!7 million as detailed below; !""3 $aka !51,..3,657 1,"55,3!2,753 2"1,"!1,617 1,717,273,"37 1.,7.4,..!,3"6 15!,..6,1.5 122,676,.7" 2.,3"4,!66,545 !""4 $aka !"1,531,36. !,"21,723,42" .,431,573,"55 1,"61,6.!,2"" !1,!.7,451,1"3 1!.,46.,42" 432,733,.23 1!,14.,4.4,566

'ash in hand Balance with Bangladesh Bank Balance with other Banks oney at 'all Investment in Liquid #ssets Other asstes )onCBanking #ssets $otal

Prime Bank Limited always gives emphasis on maintaining sufficient liquidity and cash flows to ensure uninterrupted customer services. #s on 1. <ecember !""3 our ratio of liquid assets to total asset was !..67L.

)oans and $dvances

9ith a view to improving the quality and soundness of loan portfolio, credit risk management methods were undated in !""3. $he Bank is now applying a new system o credit risk assessment and lending procedures by stricter separation of responsibilities between risk assessments and lending decisions and monitoring functions. $he Bank monitors its e-posure to particular sectors of economy on an ongoing basis.

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#s at the end of !""!, total loans and advances amounted to $k. .!,464.63 million up by 2"L compared to $k. 7,"52.72 million in !"".. #s before, the Bank continued to e-tend credit facilities to trade 8inance, Pro,ect Loans, 9orking 'apital and consumer credit etc. the Bank has all along encouraged small business group and supported (mall and edium =nterprises /( =0. #griculture and It sectors both got priority from the Bank in line with national interest, the Bank had also e-tended long term loan to a number of pro,ects under syndicated financing arrangement with banks and financial institutions. Portfolios of Loans and advances as on <ecember 1., !""3 is given below; (I. )o (= 9= ?= @= A= D= E= F= G= (ector #griculture Large and medium (cale Industry 9orking 'apital =-port 8inance 'ommercial Lending ?ouse Building Loan (mall and edium =nterprise !,61!.33 .,4"2..1 .,453.33 2,!22."3 17!..! ..2.5" 251.35 .,!7...7 .!,464.63 !!.11 .!.42L .1.1!L 11.23L 1."7L ".7"L 1.51L ."..6L .""L $k. in million L of total loans

'onsumer 'redit (cheme Others $otal

$utomation in !an2ing Operation

$echnology integration for automation of business process and procedures is an integral part of our customer service. (ince the very beginning, we have made conscious efforts for induction and up gradation of information technology at various levels to gain competitive edge over the others. Process of selecting top quality banking software was in an advanced stage and the Bank had already short listed three solutions from internationally reputed firms. 9e needed high performance, scalable online banking software so that customer service was rendered more efficiently and new products were deployed with little loss of time. In that e-ercise, we were looking into a total solution to our needs. Putting multiple delivery channels had also been considered for e-tra capacity building in customer service by doing away with limitations of time and space.

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#ll our branches are now in an automated environment as far as customer transactions are concerned and e-cepting a few branches in locations not accessible by lease line all other branches are under a wide area network. 8or remittance and fund transfer purpose, our customers could take the advantage of online facility. 9e had already undertaken initiatives to look into the possibility of connectivity outside B$$B to keep our online service at a desired level and without interruptions. 9e are pleased to inform you that our website /www.primebank.com0 was frequently visited from home and abroad. $he site was always updated with current information about our services and products. >ate of interest on various deposit products sere also available in ten website. $he bank was incorporated in Bangladesh as a banking company under companies #ct .772. It has 22 branches and a booth located at <haka 'lub, <haka, all over Bangladesh. It carries out all the banking activities through its branches in Bangladesh. Out of the above, two branches of the bank are run under Islamic (hariah, the modus operandi of which is substantially different from other branches run on commercial conventional basis. $he bank is listed with the <haka and 'hittagong (tock =-changes as a Publicly Kuoted company for its general class of shares.

Branches; 22 all over the country. 'ard <ivision;

I. Prime Bank 'ard (ervice; =stablishment ; .6th )ovember, .777 ?ome Base ; #dam,ee 'ourt #nne-e BuildingC! ..7C.!", oti,heel 'H#, <hakaC.""" ain Business; Issuance of credit cards and acquisition of merchants. Issued Brand of 'redit 'ard; aster'ard Initial Investment ; $aka .3 million II. ?uman >esources; a. =-ecutive b. )on =-ecutive c. $echnical $otal ;! ; 15 ; . ; 17

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III. Product #ssortment; International 'ard; Aold $ravel Kuota Tcredit limit M .,3""C M1,"""U Aold >8'< Ton deposit balance M1,"""C M3,"""U Aold >etain Kuota TM4,"""C M!","""U (ilver $ravel Kuota Tcredit limit M .,"""U (ilver >8'< Local 'ard; Aold BoardH =mployee Aold @IP Aold )ormal (ilver Padma (ilver eghna (ilver Gamuna T$k. !3,"""C 3,"","""U T$k. .,"","""C 3,"","""U T$k. 3","""C 3,"","""U T$k. 1","""C 3","""U T$k. !","""C !7,"""U T$k. .","""C.7,"""U

iv. 'ard Base;

'ard $ype; a. Aold b. (ilver $otal
v.

International 62. 246 .1"7

Local 2"45 3"27 7..4

$otal 27"6 33.5 ."2!3

Per month average 'ard issued ; 13"

vi. $rend #nalysis;

Issued 'ard (urrendered 'ard

!""1 2.1.

!""2 2..2 3!6 1.1.7" 1!.5" ..6" !3.." 71."" ." .!"

!""3 1"36 .2!2 157.5" 3".5" !.3" !5.2" .!..1" .51 13"

#dvance in credit card /$k. in million0 !3".4" Income from 'ard /$k. in million.0 .".1"

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arketing =-penditure /L of income0 .."" Profit /$k. in million.0 Outstanding amount /$k. in million.0 PO( achine /no0 !.5" 4".." " ." 56

erchant /no0

vii. $arget People to be (erved; Prime Bank 8ocuses the following group of people for our 'ard

arketing;

=mployee, =-ecutives, and the <irectors of Banks, Insurance and other type of 8inancial Institutions 'ompanies. <irectors and =-ecutives of e-port oriented Aarments Industries embers of renowned 'lubs and (ocieties <octors and =ngineers =mployees of 8oreign and ultinational companies <irectors of .""L =-port Oriented Leather and other Industries Eniversity and 'ollege $eachers =mployees of obile $elephone (ervice Provider i.e. Arameen phones, (?=B# $elecom, #ktel etc. Aovt. high officials /<( and above0 >enowned businessmen in the society embers of 'hamber of 'ommerce and Industries <efense officers ?igh officials of renowned )AOs, International @oluntary Organi+ation. %riority: Our first priority is our e-isting valued account holders of our Branches. =mployees of the reputed organi+ations who are getting at least $k..","""HC per month. =mployees of Bank or financial institutions. 'orporate 'lients of Prime Bank.

viii. Operational (tructure of 'ard (ervice <ivision; $he 'ard <ivision of Prime Bank Limited is divided into eight departments are as follows; i. arketing <ept. ii. 'redit #nalysis <ept. iii. Operating <ept. iv. #ccounting <ept. v. >ecovery <ept. vi. #cquiring <ept. vii. International 'ard onitoring viii. 'ustomer (ervices <ept. I had to work in these sections turn by turn. I started my learning e-perience from Operation <epartment from 4th Guly and ended in arketing on 4 th octoberGanuary. #nd in the mean time, I had traveled all the sections in due time.

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.. arketing 'ard arketing is one of the important departments in 'ard Business. PBL has a marketing team who works as agent on commission basis called them <(# /<irect (ales #gent0. $he <(#Bs bring card applications from potential and prospectivecardholders and submit the application form to the credit analysis department. $he ,ob of <(#Bs is limited to this function only. Esually they contact the prospective customers over phone to make appointment and then they visit the customers. #t the end of month they get the commission according to the number of approved applications from the 'ard management.

@erification;
$he first ,ob of the 'redit #nalysis <epartment is verification of card application and authentication of customerBs financial base and status. $o verify the application and customer we have set rules, which need to be strictly followed.

!. 'redit #nalysis;
#fter proper verification of full documentation the verification officers submit the application to the credit analysis officer to cross check the information. $he officer sets the credit limit according to the set rules and cardholder choice. $he officer hands over the application for making business proposal. $he proposals get approved H re,ected by the management. $he approved applications are handed over to the operation department for ne-t processing.

1. Operation (ection;
Operation department deals with the cardholder very closely. In fact, Operation <ept. is the heart of card Business. $he ,ob of the operation dept is described in detail bellow; a. <ata 'apture; b. =nd of <ay Processing c. =mbossing 8ile; d. 'ard <elivery; e. 'ard #ctivation f. Purchase through 'ards; aster'ard cards issued from any issuer of the world. $he shop can accept card in three ways; anual #uthori+ation; =lectronic #uthori+ation; 8loor Limit #uthori+ation; g. (ettlement; i. OnCEsC'ard; 'ardholder (hop Bank 'ardholder Billing

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ii. )otCOnCEsC'ard; 'ardholder Issuing Bank (hop #cquiring Bank aster 'ard IntBl

'ardholder Billing

'ardholder payment

58

@= $ccounts Dept:
>eceiving 'hequeH IB'# H =$'#, from various branches, collect and posting them in the various card accounts. 'heck =<P report if found any discrepancy take necessary action immediately. #s per =<P report prepare all kinds of voucher and posting them in the proper ledger. >8'< aHc maintains properly and collects adequate fund from >8'< aHc for various card aHc from various branches. >econciliation with I< H 8#<. (ettlement of Local card transaction bill with )BL H ('B. (ettlement of International card bill and reconciliation with I< and aster'ard IntBl. <aily erchant payment procedure through IB#' or Pay order issue. aintenance all kinds of late payment, =-cess limit charge and other dispute charges etc. onthly and quarterly I( report submit to the ' and our anagement.

A= Recovery "ection:
'ollection of outstanding amount from the delinquent cardholders is sometimes very much crucial and difficult. ?owever, the total collection process in the card division is detailed bellow; $elephonic contact with each of defaulter Preparing I( on overdue accounts of the 'ard. Preparing reminders letter for all defaulters. 'orresponding with other branches of our Bank to follow up their defaulters. Legal Procedure. (erving legal notice to the defaulters. Physical visits to the delinquent cardholders. #ppear at the court for legal procedures. I( for dishonored cheques. Preparing 'L for overdue card accounts.

4. #cquiring and

erchant

arketing;

aking new erchants erchant (ervices Preparation of proposal for erchant setCup Installation of PO( H anual machines at the merchant end. (ettlement of <isputed transactions at merchant end. <elivery to merchant payment. #$'? / ember #lert to 'ontrol ?ighC>isk erchants0 report to aster'ard IntBl.

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5. International 'ard

onitoring;
59

#. =ndorsement of Passport on issuance of $ravel Kuota 'ards, >eporting on

spending amount to branches for reali+ation and on word reporting to Bangladesh Bank. B. $ravel Kuota 'ard $ransaction monitoring. '. >eporting to Bangladesh Bank on issuance each retention Kuota 'ard. <. =. onthly (ummary report of all International card #ccounts. onthly of IntBl cards issued against balance of >8'< #H'.

6. 'ustomer (ervice;
#. #nswer all types of customer quires relating to application to cards, filling up application form, transactions, payments, #H' balance, service charges, dispute, and problems faced at merchant end, etc. B. >eceive cardholderBs documents such as; #pplication forms, request for enhancement of card limit, change of card type, lost D found report, replacement of cards, request for PI), acknowledgement slips, change of addressHdesignation and auto debit instructions, waiver of service charges, cancellation of card account, transaction disputes, IB'# from branches, etc. #ll papers are forward to the relevant sections at the end of the day. '. >eceive of cheques and forward to the #ccount <ept. at the end of the day after proper record keeping. <. Prepare proposals for waiver of various charges i.e late payment penalty, interest and e-cess limit charges upon cardholderBs written request and proper ,ustification. Prepare proposal for e-emption of annual fees. =. Persuade cardholders to continue card who apply for closure of card account. 8. Prepare proposals for cancellation of card account. A. 8ollow up customer queries relating to various disputes. ?. >eply to cardholderBs queries in written or over phone. I. ?elp cardholders in understanding the rules of interest calculation. G. 8ollow up cardholder payment pattern and remind them over phone to make the payment with in due date. R. aintain individual register for all customer letters and application forms received.

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viii=

Customer %ositioning:

$hree unique reasons to own Prime bankBs aster'ard 'redit 'ard >eduction on annual aster'ard fee and other charges 8le-ible payment term 60

=nhanced cash advance facilities

Other 8eatures and Benefits of Prime BankBs credit cards; #. B. '. <. =. 8. A. ?. I. G. R. L. . ). O. >evolving credit limit. )o account. 'onvenientCeasy purchase Hrepayment. (ecurity C robberyHif list. Prestigious. 8irst photo card. inimum payment and also easy payment. )o lean or no charge. #dditional card issuing facility. 9orldCclass brand. inimum interest. (ervice centers are in most important places. inimum !" days and ma-imum 3" days interest free period. Plastic money. 'onvenient way of bill payment.

%ROC&"" -&&D&D O !& 0,)0I))&D O #$/& $ C$RD

$he aster 'ard of Prime Bank Limited can be obtained through direct sales agent or through the bank branch network. $he prime criterion for getting the card is the regular income of the clients. It is not mandatory to have an account of the client to get a aster 'ard. #fter receiving the application, generally it takes three days for issuing the card. But sometimes more time is required for further verifications. $wo types of cards issued by Prime Bank Limited based on the security; Ensecured 'ard (ecured 'ard. Ensecured 'ard; In case of unsecured card Prime Bank Limited donBt take any security /as collateral0 against the issuance of the cards. (ecured 'ard; But in case of secured card the bank requires security against the card. $hese may include share certificate, (onchoipotro, 8<>, Business solvency, $elephone number, $hird party guarantee etc. $he customer can use the 'ard at all the merchant locations that display the aster 'ard sticker. $he card will be valid usually for two years and then it can be renewed.

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61

"%&CI$) 0&$ ,R&" O0 M$" &R C$RD:

Prime Bank =nsures ?igh Level of (ecurity by inserting the Photograph of the cardholder on the 'ard. !" to 3" days credit form the date of transaction. 9hen cardholder receives monthly statement, he can either choose to pay in mil or ,ust minimum due amount shown on the statement. )o interest is charged if he pays in full within payment due date. It provides services !2 hours a day, 143 days a year and the service is provided all over the world. It does not require any ,oining or administrative fees. $here is a bonus provision for annual fees in the case of local card. If card user accumulates .",""" Prime Bank Bonus Point for his Aold 'ard or 6,""" Bonus Point his (ilver 'ard in a year then he can en,oy 'ard without fees /$k. 3"5C purchase; . Bonus point0. $here is another provision for International card as well. If he accumulates !",""" Prime Bank Bonus Point for his Aold 'ard or, .",""" Bonus Point for his (ilver 'ard in a year then he en,oy our 'ard without fees /M . purchase; . Bonus0. <hakaCBangkokC<haka /Business 'lass0 #ir ticket; if the cardholder can accumulate .""""" Bonus point. <hakaCRatmanduC<haka /=conomy 'lass0 #ir ticket; if the cardholder can accumulate 3"""" Bonus point. <hakaC'o-Bs Ba+aarC<haka /Business 'lass0 #ir ticket; if the cardholder can accumulate !3""" Bonus point. ft 'ash advance facilities. aster'ard accepts .,17,"",""" locations in all over the world. $he cardholders have access to cash from more than !""""" aster 'ard #$ locations and have !" million PO( /point of sale0 terminals all over the world.

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&RM" B CO-DI IO-" O0 M$" &R C$RD CR&DI C$RD:

$here are some terms and conditions of the Prime Bank Limited following terms and conditions are included in the agreement; .. JPBLJ means Prime Bank Limited !. J#$ J mans any #utomated $eller achine or $erminal. aster 'ard. $he

62

1. J'ardJ eans any 'ard issued by PBL bearing the name aster'ard or the service mark of aster'ard /whether or not it also bears the name or mark of any other person or entitles0 to the principal 'ardholderH(upplementary 'ardholder for use on their 'ard #ccount and includes any such 'ard issued in replacement or renewal thereof. #ll 'ards issued for use on 'ard #ccount remain the property of PBL at all times. $he issue of a 'ard is conditional upon the comprehensive and truthful completion of PBLBs 'redit card #pplication 8orm and PBLBs utmost satisfaction on the information furnished in 'redit 'ard #pplication 8orm. 2. J'ardholderJ where used in relation to any 'ard means the person being eligible for entering into a contract who has been issued a card to operate a 'ard #ccount and where used in any other case means Principal 'ardholder or any (upplementary 'ardholder. 3.J'ard #ccountJ in relation to any 'ard means the account designated and maintained by PBL in relation to that 'ard provided that where only one account is designated and maintained by PBL for all the 'ards issued to the Principal 'ardholder and every (upplementary 'ardholder, any reference to 'ard #ccount shall mean that #ccount accessed by 'ardholderBs 'ard. 4. J'ard #ccount (tatementJ means a statement or statements by PBL of the amount charged debited andHor paid to 'ard account/s0 stated therein. 'ard #ccount (tatement shall detail all transactions processed to the 'ard #ccount during the statement period. 5. J'ard $ransactionJ means an advance or payment made in any currency or by $ravelers 'heques or other forms representing an amount of any currency but shall not include any withdrawals from any account with PBL. 6. J'ash #dvanceJ means an advance or payment made in any currency or by $ravelers 'heques or other forms representing an amount of any currency but shall not include any withdrawals from any account with PBL. 7. J aster'ardJ means aster'ard International Incorporated.

.". J erchantJ means any person or entity with whom PBL or any member of aster'ard has a subsisting agreement relating to the use and or acceptance of the 'ard in payment to such person of entity whether for goods, services or changes incurred and or to obtain 'ash #dvances for such person or entity. ... JOutstanding Balance J in relation to any 'ard #ccount (tatement means the outstanding balance in favor of PBL as stated therein or where more than one outstanding balances is stated therein the total of all the outstanding balance stated herein. .!. JPI)J in relation to any 'ard means the Personal Identification )umber assigned by PBL to that 'ard which will be used for accessing 'ardholderBs nominated 'ard #ccount through an #$ . .1.JPrincipal 'ardholderJ means the person to whom a 'ard is issued on his application alone.

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63

8ig; Aold 'ard 8ig; (ilver 'ard .2.J(upplementary 'ardholderJ means the person /other then the Principal 'ardholder0 to whom a 'ard is issued on the application or request of the Principal 'ardholder whether alone or ,oining with such person. .3.JPayment <ue <ateJ means the last date of payment and is usually .3 days from the date of statement, if not otherwise mentioned, and specified on the 'ard #ccount (tatement. #t least, the inimum Payment <ue /e-cluding the overdue amount0 must be paid by the 'ardholder within the due date at 'ard <ivision of PBLBs ?ead Office. #ny overdueHover limit amount must be paid immediately. .4.J'ompanyJ means when used in relation to a 'ardholder shall include /I0 'ompany of which such 'ardholder is <irector or =mployee, /ii0 Business =nterprise of which such 'ardholder is the sole proprietor and /iii0 8irm of which such 'ardholder is a Partner.

0$CI)I I&" O0 #& C$RD

$he card provides the following facilities; $he 'ardholder can use the card to make payments to the merchants against purchase of all goods and services. $he card can be used for availing cash advances from any branches of Prime Bank Limited or any member of aster'ard of any erchant authori+ed to make cash advances% as may be agreed upon by Prime Bank Limited. $he card can be used for availing cash advances by the use of the 'ard on any #$ of Prime Bank Limited or of aster'ard. !"L cash can be withdrawn from the #$ terminals.

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64

CR&DI )IMI
Prime Bank Limited may sanction any credit limit, i.e., the ma-imum of credit available to the card holder which can be accessed at any time and can terminate or modify or vary such facilities or credit limit without prior notice. Enless the credit limit is imposed in relation to in relation to each 'ard #ccount, the imposed credit limit is the limit applicable to the aggregate of the balances due to PBL on all 'ard #ccounts of the Principal cardholder and all supplementary cardholders. )otwithstanding, any credit limit that may be sanctioned by PBL in its absolute discretion authori+e and allow any 'ard $ransaction even though the 'redit Limit would be or has been e-ceeded or refuse to make or approve any cash advance or authori+e or approve any 'ard transaction )otwithstanding that the credit limit is not e-ceeded.

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65

)O"" O0 C$RD OR DI"C)O",R& O0 %I-:

$he 'ardholder shall not disclose any person the PI) assigned to the 'ard immediately upon learning that the 'ard is stolen or the PI) is disclosed. $he 'ardholder shall report it to PBL followed by written confirmation containing 'ardholderBs signature on the said loss. $he 'ardholder shall at the request of the PBL furnish PBL with a statutory declaration in such a form as PBL may require and 8.I.>5 Police report and Hor any other information as PBL may require. But if the lost card is found or recovered, the cardholder shall not make use of the card but shall immediately cut it into halves and return the same to PBL. )otwithstanding the loss on the theft of any card or disclosure of the PI) in respect of any 'ard, PBL charge and debit the 'ard #ccount the amount of each and every 'ard $ransaction made of effective before written confirmation by the 'ardholder of such loss, theft or disclosure is received by PBL. >eplacement of 'ard may be made to the 'ardholder on payment of required charges in this regard.

C#$R+&" O C$RD $CCO,- :

PBL may charge and debit the 'ard #ccount the amount of each and every 'ard $ransaction made or effected, whether by the 'ardholder or any other person with or without the 'ardholderBs knowledge or authority notwithstanding that the balance due to PBL on the 'ard #ccount may as a consequence of any such charge or debit e-ceeding any credit limit that may be sanctioned. 8or e-isting 8ees and (ervice 'harges, one may contact 'ard <ivision at PBLBs ?ead office or any Branch of PBL.

C$"# $D/$-C& 0&&

In respect of each 'ash #dvance made through the use of any 'ard and or the PI), PBL charge and debit the 'ard #ccount a fee as decided from time to time.

%$.M&- :
$he following stated there in shall be paid to the 'ard <ivision at PBLBs ?ead office within the payment due date in respect of each 'ard #ccount (tatement; a. #t least the aggregate of the minimum payments specified as such in the 'ard #ccount (tatement. b. $he amount, if any, by which the outstanding balances stated therein e-ceeds the credit limit of the 'ard #ccount (tatement. If outstanding balances stated in 'ard #ccount statement is not paid in full within the Payment <ue <ate stated therein, PBL may charge and debit the 'ard #ccount calculated on a daily basis, sub,ect to minimum monthly finance charge of !.3"L or such other sum as may be determined from time to time by s PBL without notice.

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66

On the amount of each and every charges stated in that 'ard #ccount (tatement as from the date when such charge was incurred or was posted to the 'ard #ccount, as PBL may elect, to the billing date stated in that 'ard #ccount (tatement and on the entire outstanding balance from the billing date stated in that 'ard #ccount (tatement until the full payment of the outstanding is made.

Priority .st !nd 1rd 2th 3th 4th

Payment applied for #ny over limit amount #ny over due amount 'ash #dvances (ervice 'harges 8ees Purchase

Mar2eting:
a. )umber of <(#s b. #dvertising =-p. c. erchant arketing ; 1" Person ; !.3" L of Income ; ! Person

#dvertising;
#wareness and intention development through advertisement in print media, sign and billboard.

Public >elation;
('B aintain a good public relation with valued 'ardholders and Pan Pacific (onargaon0 erchants /?otel

(pecial Promotional Offer;

$he bank offer special to its 'ardholders time to time. (uch asC

%roposal $nalysis Matri3

Presently 'redit card limits are fi-ed in a way not based on any atri-. $he task may be made easy, scientific, uniform and systematic if a atri- is developed and approved for assessing the 'redit card limit taking into consideration of the important criteria comprising credit worthiness of the 'ardholders. Prompt delivery of service is also a prerequisite to make a break through in the highly competitive market. #s such, the approving authority should also be well defined and precise so that decision is taken very promptly within the defined and approved atri-.

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67

9ith this end in view the following atri- has been developed for scoring the 'redit 'ard limit proposals; Points 8or Points for Income Points 8or Other considerations Profession Level / onthly Income0 .
8i-ed salaried person $k 4,"""C$k .","""C2" $k .","".C$k .3,"""C2. . . Ownership of house in unicipal area /in own nameC ." parents H Goint nameC 30 !. Ownership of car

3 3 ! ! ! 3 3 ! ! ! ! !

$k l3,"".C$k !","""C2!

Professional i.e <octors, =ngineers, Bankers, 'hartered #ccounts

$k !","" .C$k !3,"""C 1. Ownership of $ D $ telephone 21 2. 'ustomer for our Bank having $k !3,"".C$k 1","""C22 other credit card facilities, which are regulr or considerable deposit $k 1","".C$k 2","""C23 3. ?aving credit card of other $k 2","" .C$k 3","""C Bank. 24 4. #ve. bank Balance of last 4 $k 3","".C$k 4","""C25 months. $k 4","".C$k 5","""C26 $k 4","".C$k 5","""C26 $k 5","".C$k 6","""C27 $k 6","". and aboveC3" 5. Personal (uitability 6. Income $a- #ssessment up to date 7. ?olding Passport .". (pouse earns ... 'lub .!. embers

arried

.1. #ge; 23C4" years ; 2 13C23 years; 1 !3C13 years; ! !"C!3 years;.

2 2"

."

3"

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Points for profession ." Points for Income level 3" Points for other considerationXXXX 2" $otal points .""

68

!= $ssessment of Credit Card limits based on the points scored:

.. !. 1. 2. 3. 4. 5. 6. 7. .". ... .!. .1. .2. .3. .4. .5. .6. .7. !". !.. !!. !1. !2. !3. !4. !5. !6. !7. 1". 1.. 1!. 11. $otal Points (cored 3" 3. 3! 31 32 33 34 35 36 37 4" 4. 4! 41 42 43 44 45 46 47 5" 5. 5! 51 52 53 54 55 56 57 6" 6.C63 64C."" C C C C C C C C C C C C C C C C C C C C C C C C C C C C C C C C C Credit Limit Tk. 10,000 Tk. 12,000 Tk. 14,000 Tk. 16,000 Tk. 17,000 Tk. 18,000 Tk. 20,000 Tk. 21,000 Tk. 22,000 Tk. 24,000 Tk. 25,000 Tk. 27,000 Tk. 30,000 Tk. 32,000 Tk. 34,000 Tk. 35,000 Tk. 37,000 Tk. 38,000 Tk. 40,000 Tk. 42,000 Tk. 44,000 Tk. 46,000 Tk. 48,000 Tk. 50,000 Tk. 52,000 Tk. 54,00 Tk. 55,000 Tk. 56,000 Tk. 57,000 Tk. 59,000 Tk. 60,000 Tk. 61, 000-Tk 75,000 Tk. 76,000 -Tk 100,000

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69

 Before sanctioning credit limit necessary due diligence shall have to be done. >esidence H office of the applicant may be visited by the concerned BankBs representative, if required. =ffort should be m64ade to collect credit information on he applicant informally as fare as possible. In special cases personal interview of he applicant may be arranged with high ups of credit 'ard <ivision to collect more information and to know him more intensely. 'redit 'ard limit for more than $k. .,"",""" shall be given in very special and deserving cases having scored more than 7". Limit above $k . lac have be approved by head office credit committee. 8or enhancement of credit card limit, utili+ation o the e-isting limit and repayment behavior of the 'ard ?older is evaluated. $he customer who frequently utili+es the full limit and repayment is also as per schedule% his limit may be enhanced up to !3L without approach of the customer and which may be advised to the customer.

Problems of' PBL Card Division:

@ision and mission is not well specified. $he market is not well defined. InterCsection relation is not well correlated Lack of proper marketing knowledge #lways in a pressure from the higher authority. Lack of proper management Lack of aggressive marketing activities Lack of motivation (witching tendency of the employees Improper logistic support Lack of technical person Lack o training facilities <ecisions taken by higher authority do not match with the implementerBs view. (low return on investment Lack of technical support /software, hardware, teleCcommunication etc.0

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'?#P$=>C3 #nalysis of (econdary <ata

In issuing )BL takes defensive strategy. $hey issue card on security and strong recommendation than any other bank. $hey take special facility and services to their e-isting cardholders. $hey do not feel to issue as much as possible rather best service to the customer. )BL cards are sold on pull marketing activities like, corporate bonding, Cbranch offering, signboard and advertisement at print media. In the year !""1, !""2 and !""3 )BL issued appro-imately !""", !5"" and .2"" cards and now have no <(=. (tandard 'hartered takes aggressive marketing activities to capture the market. #lready it proves itself as a market leader. It already has <(#. In the year !""1,!""2 and !""3 ('B issued appro-imately 4""", ."""", 16""" aster'ard, which proves their growth /2"L and 51.5L0. Prime Bank issues card in other defensive way, but they do not follow as )BL. PBL basically offer salaried persons. $he <(=s are newly introduced in marketing activities. In !""1, !""2 and !""3 PBL issued 2.1.,2..2 and 1"36 cards.

8ig; )umber of 'redit 'ard ogf Prime bank in the year !""1, !""2and !""3 In case of surrendered )BL says that every year they loose 1L of the total cardholders. On the bother hand ('B reduces it in !L by giving better and competitive services. But the rate of PBL surrendered is higher than the others. In the year !""2 and !""3 numbers of surrendered cards are 3!65 and .2!2. )BL proves efficiency in cards by increasing its income with less number of cards comparisons with competitors. On the other hand ('B shows a pioneer market leader advantage with efficiency and strong marketing knowledge on cards. PBL income from card shows the potentiality to improve in this field. On the other hand,

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71

PBL e-penditure is now a headache of higher authority. $he fi-ed cost is /13 V .!0Q $k.2! million and variable cost is $k. 4 million now. In each contrary, income has to increase.

arketing e-penditure of )BL and ('B is a competitive approach to hit PBL. PBL on other hand e-pense very little on marketing e-penditure and promotional campaign.

8ig; )umber of PO(

achine and

erchant of each Bank.

#s a market leader ('B e-plore merchant and PO( terminal. It has already 3"" PO( machine and 13"" merchants over the country. On the other hand )BL has 1!3 PO( machine and 4"" merchants. But PBL is growing as their competitor. #lready it has .51 PO( machine and 13" merchants in <haka city within two years.

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72

Comparative &valuation of 0ees and Charges of Credit Card of %!) with the fees charged by other different Companies on Credit Card Mar2et:
Prime Bank Ltd. /PBL0 #nnual 8ees /Primary 'ard0 Aold 'ard M6" $k.!,""" 'lassic 'ard M2" Aold 'ard M.!" (ilver Aold 'ard 'ard M5" M7" $k..53" $k.!""" (ilver 'ard M7" $k..3"" (tandard 'hartered )ational Bank Ltd. Bank /('B0 /)BL0

International Local >eplacement 'ard International Local (upplementary 'ard #nnual 8ee

$k..,""" $k.13""

M!" $k.3""

M!" $k1""

M.3 $k3""

M.3 $k.!""

M3" $k.."""

M13 $k3""

M4" 8ree $k.4"" $k.."""

M13

M7"

M3"

8irst 8ree 'ard/Local0 (econd 'ard $k..,""" and Onward/Local0 'ard >eplacement International Local PI) >eplacement International Local Late 8ee Payment M." M." $k.3"" M!" $k.3""

$k.3""

$k.."""

M6""

M!" $k.1""

M.3 $k.3""

M.3 $k.!""

M3" $k.."""

M13 $k.3""

CR ED I T CA RD

M." $k.3""

M.3 $k.3""

M.3 $k.!""

M." $k.3""

M." $k.3""

International

M."

M.3

M.3

M.3

M.3

73

Local Over Limit fee International Local

$k.1""

$k.!""

$k.3""

M1""

$k.3""

$k.13"

M!" $k.3""

M.3 $k.1""

M.3 $k.3""

M.3 $k.1""

M.3 $k. 3""

M.3 $k13"

=mergency $k..3", or 1L, of !.3L of the Iterest W !.3L per 'ash #dvance #dvance amount 9ithdrawal amount month 8acility whichever is higher. Interest >ate /per onth0 International Local 'ash Limit International Local !"L 3"L .3L 3"L 3"L of 'redit limit 3"L of 'redit limit 3L of the 'redit limit plus amount e-cess of 'redit limit. !.3L !.3L !.3L !.3L !.3L !.3L !.3L !.3L !L on !L <aily Basis !L !L

>eturn 'heque 8ee International M." Local (tatement >etrival 8ee International Local 'heque 'ollection International Local $k13"

M." $k!3"

M.3 $3""

M.3 $k3""

M." $k.""

M." $k.""

M3 $k3"

M3 $k3"

M3 $k3"

M3 $k3"

M3 $k3"

M3 $k3"

M!" $k!3"

M.3 $k!3"

M." $k.""

M." $k.""

M.3 $k.""

M.3 $k.""

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(trength and 9eakness #nalysis; >anking .C3, 3Q(trong Position, YYYY..Q9eak Position
PBL .. ('B )BL

'ard
a. <eveloped $echnology 1 b. 'redit 'ard 1 c. 'harges and Interest 1 >easonable d. Photo 3 e. 'redit Processing $ime 3 f. 'ard Base 1 g. 8aster #pproval 1 h. Innovation 2 3 3 2 3 1 3 3 3 2 3 3 3 2 2 3 3 3 1 3 3 3 2 3 3 3 1 3 3 2 2 1 2 . 2 1 2 . 2 2 2 2 1 2 1 . 2 . . 1 ! 1 ! ! 1 2 1 2 1

!.

(ervice
a. 'ash #dvance 8acilities b. #$ (ervice c. 'ustomer (ervice 2 ! 1 1 3 3 2 1 1 3 1 1 1 ! 1 1 1 3 2 1 1

1.

erchant

arketing

a. Aood erchant >elation b. 8aster Payment c. 8aster #pproval 2.

arketing
a. Promotional #ctivities b. <irect (ales =ffort c. Public >elation d. )ew arketing $argeting e. #ggressive arketing (trategy

3. 4.

8inancial (trength anagerial #bility

a. >isk #nalysis b. anagerial 'apability c. )umber of =mployees

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5.

'orporate Profile
a. 8inancial >esources b. >einforce Business 'apability c. )onCclassified Loan d. 'orporate image e. Product #ssortment

6.

'ustomer Positioning

75

C#$% &R'D
arket (urvey /Aathering Primary <ata0
'ard arket #nalysis erchant arket #nalysis

8actors 'onsidered by the 'ardholders;

.. <ependent variables; Percentage of average e-penditure in credit card transaction% !. Independent variables; Preference in buying goods >anking of transaction medium in preference 1. In credit card preference 2. Insufficient retail stores number Problem in operation in transaction >etailers are reluctant in credit card transaction Problem in credit card payment =asy transaction in cash rather than credit card 8raud transaction may occur ore credit card other than PBL aster'ard categories aster'ard;

3. Preference in

4. 'omparison aster'ard @s @I(# H @anik ?as more retail access. ore #$ access. 'harges are lower. $ransaction is easier than @I(# H @anik.

5. 'omparison PBL credit cards with )BL card facilitate. Prime Bank 'redit card; ?as more retail access /than )BL0. =ase operation. ?as more cash advance facilities. ?ave different types of cards and its limit. 'harges and interests are reasonable. =ase in bill payment system. 'ustomer service is better. Is welcomed by the retailers. Aives more satisfaction /than )BL0.

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6. 'omparison PBL credit card with (tandard 'hattered credit card facilities. 76

Prime Bank credit card ?as more retail access /then ('B0 =ase operation. ?as more cash advance facilities. ?ave different types of cards and its limit. 'harges and interests are reasonable. =ase in bill payment system. 'ustomer service is better. Is welcomed by the retailers. Aives more satisfaction /than ('B0.

0or Merchant:
<ependent variables; Percentage of selling goods in terms of credit card. Independent variables; Preference in selling goods >anking of transaction medium preference in selling .. Problems of credit card; Late bill Payment >ate of commission (low approval Lack of logistic support Less profitability

!. Percentage of selling goods in terms of credit card 1. 'ompare aster'ard with @I(#H @anik aster'ard; $echnology is better than @I(#H @anik 8aster approval Profitability is more 'ardholders are more in numbers than @I(#H @anik 2. 'ompare Prime Bank 'redit facilities with )ational Bank 'redit 'ard facilities PBL 'redit 'ard; achine online is better than )BL Better payment system (ervice is better Epgraded technology achine types /of line0 are convenient Less time taking for authori+ation >ate of commission is less ode of payment is satisfactory than )BL

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3. 'ompare Prime Bank 'ard facilities with (tandard 'hartered facilities PBL 'redit 'ard; achine online is better than ('B Better payment system (ervice is better Epgraded technology achine types /of line0 are convenient Less time taking for authori+ation >ate of commission is less ode of payment is satisfactory than ('B

M& #ODO)O+.
Literature >eview of 'redit 'ard

<iscussion with <

Interviewing Industry =-pert

(econdary data analysis

Kualitative >esearch

=nvironmental 'onte-t of $he Problem

anagement <ecision Problem

arketing >esearch Problem

#pproach to the Problem

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'haracteristicsH 8actors influencing >esearch <esign

Ob,ectiveH theoretical 8oundation

#nalytical odel; <escriptive, athematical

>esearch Kuestions

?ypotheses

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(ingle 'rossC(ectional >esearch <esign 78

(urvey >esearch

$elephone Interviewing

Personal Interviewing

)onCcomperative (caling $echinique; (tructure Kuestionnaire

(tratified (ampling with (>(

<ata 'ollection

<ata 'oding D 'onversion / etric $o 'ategorical0

<ata #nalysis 8requency <istribution 'ross $abulation Parametric $est )Cway #)O@# ultiple >egressions

8indings and >esult

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>ecommendation

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Research Design:
4i5 *ind of information to be obtain: Information relevant to the problem derived from competitor of the PBL card, merchant, and cardholders. 4ii5 Method of administrating the 6uestionnaire: 8orward and backward linkage types of questionnaire are designed to collect the data. Personal interview is the main technique of collection date from merchant, cardholder and competitors /)BL and ('B0. 4iii5 "caling techni6ue: Likert scaling. "ource of Data: <ata collection is based on primary and secondary data and also requires in depth observation of the phenomenon to be investigated in order to achieve the ob,ectives test of hypothesis. 4iv5 ypes of 6uestionnaire: ' OpenCended questionnaire and closeCended questionnaire / ultiple <ichotomous0 $ime C 3 minutes Length C ! page Teach for cardholder and erchantU $pproaches to the problem odel Building; /erbal Model: #nalysis the competitorIs performance in the credit card market that effect the customer client satisfaction comparing with PBL card +eographical Model %!) -!) "C! Offerings H %roduct H %rice H %lace H %romotion Competitive $dvantage and

%erformance of %!) card

Rate of credit card charge

Mathematical Model: FQ a Z b9here, FQ Preference of P=L card a Q 'ompetitive performance b Q 9eight of independent variables - Q Independent variables

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"tatistical tools and Models:

'ardholder #nalysis ultiples >egression;
FQB"ZB.V.ZB!V!ZB1V1.....................ZBkVkZ e

=stimated equationCCC
# FQaZbl-lZb!-!Zb1-1Zb2-2Zb3-3 Z b4-4 9here, Dependent variables: y Q Percentage e-penditure in credit card a Q is the estimator of he Bo b Q coefficient of weight Independent variables: 'redit 'ard hasC -. Q Insufficient retail stores number -! Q Problem in operation in transaction -1 Q >etailers are reluctant in credit card transaction -2 Q Problem in credit card payment -3 Q ?igh interest and charges -4 Q =asy transaction in cash rather than credit card -5 Q 8raud transaction may occur

8actor analysis
Vi Q #i.8.Z #i!8!Z #i181Z ......................... Z #i787 Z @iEi 9here, V, #IG 8 @, Q i th standardi+ed variables Q (tandardi+ed multiple regression coCefficient of variables on common 8actor , Q 'ommon factor Q (tandardi+ed regression coCefficient of variables i on Enique factor Ei Q Enique factor for variables

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/ariables: 'omparison
@.; @!; @1; @2;

aster'ard with @I(# H @anik

aster card has mean retail access than @I(# H @anik aster'ard has more #$ access than @I(# H @anik aster'ard charges are lower than @I(# H @anik aster'ard $ransaction is easier than @I(# H @anik.

'omparison Prime Bank credit card with )ational Bank credit card facilitiesC
@.; PBL card has more retail access then )BL @!; PBL machine online is better than )BL @1; PBL payment system is better than )BL @2; PBL service is better than )BL @3; PBL has upgraded technology than )BL @4; PBL machine types /of line0 are convenient than )BL @5; PBL takes less time for authori+ation than )BL @6; PBL rate of commission is less than )BL /G: PBL mode of payment is satisfactory than )BL

'omparison Prime Bank credit card with (tandard 'hartered credit card facilities;
@.; PBL card has more retail access then ('B @!; PBL machine online is better than ('B @1; PBL payment system is better than ('B @2; PBL service is better than ('B @3; PBL has upgraded technology than ('B @4; PBL machine types /of line0 are convenient than ('B @5; PBL takes less time for authori+ation than ('B @6; PBL rate of commission is less than ('B @7; PBL mode of payment is satisfactory than ('B

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0re6uency $nalysis:
$ransaction form% >ank cash% >ank cheque% >ank credit card% >ank debit card.

8actors affects in credit card e-penditure;

Insufficient retail store numbers% Problems in operation in transaction% >etailers are reluctant in credit card% Problem in credit card payment% ?igh interest and charges% =asy transaction in cash rather than credit card% 8raud transaction may occur% ore credit can other than PBL% >ank gold card% >ank silver card% >ank debit and credit facilities in a single.

aster'ard @s @I(# H @anik;

ore retail access% ore #$ access% Low charges% =asy operation in transaction.

PBL @s )BL H ('B;

ore retail access% =asy operation in transaction% ore cash advance facilities% <ifferent types of cards and limit% 'harges and interest are reasonable% =asy bill payment% Better customer service% >etailers welcome the card% Aives more satisfaction.

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Personal Identification of the >espondent;

=-pense in credit card% #ge limit% =ducational background% Occupation% Income limit.

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erchant #nalysis ultiple >egression #nalysis;

Multiples Regression Model: FQBoZB.V.ZB!V!ZB1V1.....................ZBkVk Ze &stimated e6uationI F Q aZb.-.Zb!-!Zb1-1Zb2-2Zb3-3 9here, Dependent variables: y Q Percentage of sales in credit card a Q is the estimator of he Bo b Q coefficient of weight Independent variable: %roblems of credit card: V. Q Bill payment is late V! Q >ate of commission have to surrendered V1 Q #pproval is slow V2 Q Logistic support is not adequate V3 Q (hrunk Profitability.

0actor $nalysis 'omparison master card will @I(# H @anik

@.; @!; @1; @2; aster'ard technology is better than @I(#H @anik aster'ard approval is faster than @I(#H @anik aster'ard is more profitable than @I(#H @anik aster'ard has more cardholders than @I(#H @ani

'ompanion Prime Bank facilities with )ational Bank;

@.; PBL machine online is better than )BL @!; PBL payment system is better than )BL @1; PBL service is better than )BL @2; PBL technology is unguarded than )BL @3; PBL machine types /of line0 are convenient than )= @4.* PBL takes less time for authori+ation than )BL @5; PBL rate of commission is less than )BL @6; PBL mode of payment is satisfactory than )BL

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'omparison Prime Bank facilities with (tandard 'hartered Bank

@.; PBL machine online is better than ('B @!; PBL payment system is better than ('B @1; PBL service is better than ('B @2; PBL technology is unguarded than ('B @3; PBL machine types /of line0 are convenient than ('I @4; PBL takes less time for authori+ation than ('B @5; PBL rate of commission is less than ('B @6; PBL mode of payment is satisfactory than ('B

0re6uency $nalysis:
$ransaction form% >ank cash% >ank cheque% >ank credit card% >ank credit.

8actors affect in credit card selling;

Late bill payment% >ate of commission surrendered% (low approval% Lack of logistic support% Less profitability% (ales in credit card.

aster'ard @s @I(# H @anik;

Better technology% 8aster approval% online is better. ore profitability% ore cardholders% achine

PBL @s )BLH ('B

Better payment system% (ervices are better% Epgraded technology% achine types /of line0 are better% Less time taking for authori+ation% >ate of commission is less% ode of payment is satisfactory.

Operationali+ation and 'ardholder #nalysis;

easurement of variable

ultiple >egression #nalysis; <ependent variables; Independent variable; etric in nature etric in nature

easurement is done by using 3 point Likert scale0 (trongly disagree Q ., <isagree Q!, Indifferent Q 1, #gree Q 2,(trongly agree Q 3 8actor analysis; @ariable /measurement is done by using by 3 point Likert scale0

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erchant #nalysis;
<ependent variables; Independent variable; etric in nature etric in nature

easurement is done by using 3 point Likert (cale

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"O,RC& O0 D$ $
(econdary data;
(econdary data has been collected from the #nnual report, brochure, and inCdepth interview with the employer working in the card division of different organi+ation.

Primary <ata;
Primary data has been collected from the respondents /cardholders merchant0 by questionnaire.

(ample <esign
/.0 Population; #ll credit cardholders in Bangladesh #ll merchant engage in credit card transaction. /!0 (ample frame; 'ardholders of PBL with having one or more than one competitorIs card PBL merchant having transaction relation with competitor. /10 (ample technique; Individual credit cardholder Individual merchant =-tendC <haka city $imeCGuly 3 to October 3, !""4 /10 (ampling technique; )onCprobability and convenience sampling /for cardholders0 Bayesian technique /selecting sample depending or prior information of merchants0 (20 (ample si+e; 3" cardholder !" erchant

/30 =-ecuting the sampling process; 'ollection of data knocking in the working place and personal relation /for cardholders0 'ollection address and information of the merchant and collect responses. Q,&" IO--$IR& $-D I-" R,M& OpenCended and closeCended questionnaire /both for cardholders and merchants0 <ata analysis has done by using (P((C."." and icrosoft =-cel

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)IMI $ IO-:
(ufficient data is not available to measure the problem. 'ompetitors are reluctant to provide adequate data when they knew I am doing internee in Prime Bank. >espondents got it difficult to response the scaling techniques. Lack of lab facilities made troubles to work smoothly. $he working time from 7 am to 3 pm made trouble to me to get information, analysis and report writing, >espondents are tremendously busy. (o they gave me a little time to work with them. #s per my desire we do not get sufficient respondents /Prime Bank cardholders who have least one other BankIs credit card0. >espondentIs responses biased for some response of the questionnaire and social views. In fact I tried only for (P(( software but other software might be used for its betterment. $o get 3" responses of cardholders and !" responses of merchants makes a heavy load for a single person like me. 'redit card is a new product in Bangladesh, so respondents do not know much of it. 'omparison analysis sometime made the respondents biased influences of corporate image. Prime Bank card operation is a newly /1 years0 launched phenomenon. (o it is tough to compare with other competitors that are well established in the market.

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0indings $nd Discussion:

#nalysis of Primary <ata 'ardholders 'rossC$abulation (tatistics; 'hiCsquare test of user status and level of customer satisfaction. ?ypothesis $esting;
'ustomers with high user status of 'redit 'ard hold low level of satisfaction and viceCversa.

?ypotheses; ?": )o association between user status of 'redit 'ard and level of customer satisfaction. ?.; #ssociation between user status of 'redit 'ard and level of customer satisfaction. ( Level of significance ) =.05 =-planation;
(ince the value of significance level / at ."3 level 0 is greater than the probability of the 'hiCsquare test D other cross tabulation statistics /.ooo0, we can conclude that the ?" can be re,ected and ?. can be accepted. (o there is association between user status and the level of satisfaction of customer. $he appro-imate 'hiC(quare is .4.66. with 4 degrees of freedom, which is significant at "."3 level. $he value of R O (tatistics /".1240 is denotes lower calculation of factor analysis.

Multiple Regressions:
# statistical technique that simultaneously develops a mathematical relationship between two or more independent variables and an internal scaled dependent variables.

#o: there is no relation e-isting between the dependent variable and independent
variable/s0. 8rom the (P(( output our significance is "."23 is less than the significance of "."3, the null hypothesis of equal population means is re,ected. oreover, \ ultiple >egression equation[

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. J aKb(3(Kb939KLLLLLL=Kb2 32
Q ..27! Z ".!15V.Z ".534V ! Z /C".."70V1 Z /C".""670V2Z /C".32.0V3 Z /".""2"0V4 Z /C"."5150 V5

88

?ere, a Q . .27! which indicates that regression line will cross the yCa-is at point . . 27!. bi Q ".!15 which indicates that if Vi /insufficient retail store number0 change by one unit then y /percentage in credit card e-pense0 will change by ".!15 unit. $his condition will be same for all other variables as per output. 8rom the coCefficient coCrelation matri- we found, 0raud transaction may occur has a positive co'relation with %roblem in operation in transaction 4:=:A?58 &asy transaction in cash rather than credit card 4:=:EA58 #igh interest and charges 4:=? (:5 is one of the main reason for credit card e3pense= In other hand8 &asy transaction in cash other them credit card has positive co'relation with %roblem in credit card payment 4:=:(G58 #igh interest and charges 4:=9:D58 Retailers are reluctant in credit card transaction 4:=:G:5 and Insufficient retail store number 4:=?E(5 denotes that the cash is in a better competitive position them credit card=

0actor $nalysis:
aster'ard @s @isa H @anik; Based on Initial =igenvalue we have chosen two factors and from the communalities matri- we can see that @i and @! are highly coCrelated. On the other hand @s and ]2 are highly coCrelated which we can see in both factors. $hough our null hypothesis is M he variables are not co'related in the populationN so the null hypothesis is re,ected. 8rom the coCrelation we found two factors;

.. ore access /@i and @!0 !. 'harges and transaction /@1 and @20 $here are 2 /44."L0 nonCredundant residuals with absolute value ^"."3.

PBL @s )BL
Based on initial =igenvalue we have chosen four factors /Areater than ..""0 8actor .; @i ,@5 and @7 8actor !; @!and @2 8actor 1 ; @3 and @4 (o the hypothesis is re,ected. $he appropriate 'hiC(quare is ..2..4" with 14 degrees of freedom, which is significant /"."""0 at the "."3 level. $he values of R O statistics /".3640 $here are .6 /3"L0 nonCredundant residuals with absolute values.

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PBL @s ('B
Based on initial =igenvalue we have chosen four factors; 8actor .; @, ,@! 8actor ! ;@3 and @7 8actor 1 ; @s, @e and @g 8actor 2 ; @2 and @5 (o the hypothesis is re,ected $he appro-imate 'hiC(quare is 52.466 with 14 degrees of freedom. 9hich is significant /"."""0 at "."3 level. $he value of R O statistics ".263 may denote 8actor analysis may not be perfect. $here are .7 /3!L0 nonCredundant residuals with absolute value.

erchant #nalysis Multiple Regressions:

?o Q there is no relation e-ist between the dependent variables and independent variable/s0. 8rom (P(( output our significance is ".74. is more then the significance of "."3, the null hypothesis of equal population means is not re,ected. ore over, multiple regression equationC \

. J a Z b.-.Z b! -!.........................bk-k
Q 1.327 Z ".135 -.Z /C".!""0 -! Z /C"...30 -1 Z /C"."6.0 V2Z /C".!"10 -3 ?ere, a Q 1.327 which indicates that regression line will cross the F a-is at point 1.327. bi Q ".135-i which indicates that if Vi /Late bill payment0 change by one unit than F /percentage in credit card selling0 will change by ".135 unit. $his condition will be same for all other variables as per output.

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8actor #nalysis aster'ard @s. @I(#H@anik;

Based on initial =igenvalue we have chosen only one factor from the communalities matri-, we can see all the variable are correlated.

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$he appro-imate 'hiC(quare is .".323 with 4 degrees of freedom, which is not significant at "."3 level. $he value of R O statistics /".3460 denotes lower calculation of factor analysis. $here are 4 /."".""L0 non redundant residuals with absolute values ^ "."3

PBL @s )BL
Based on initial =igenvalue we have chosen 1 factor from the communalities matri- we can see thatC 8actor .; @i 8actor ! ; @! , @5 and @6 8actor 1 ; @1 ,@2 @3 and @4 $he appro-imate chiCsquare is 34.322 with !6 degrees of freedom, which is significant at "."3 level. $he value of R O statistics /".4"40 denotes significance the analysis. $hese are .6 /42."L0 nonCredundant with absolute value.

PBL @s ('B
Based on initial =igenvalue we have chosen 1 factor from the communalities matri- we can see thatC 8actor .; @2 8actor !; @: 8actor 1; @i @! @1 @3 and @4 $he appro-imate chiCsquare is 53.535 with !6 degrees of freedom, which is significant /"."""0 at "."3 level. $he value of R O statistics /".4740 denotes significance the analysis. $hese are .4 /35."L0 nonCredundant residuals with absolute value.

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0I-DI-+
/Primary <ata0 $nalysis of cardholder:
52 L people prefer cash as a form of transaction and only !4L in credit. 56.5L of respondent believe that insufficient number of retail outlets is a problem of credit card and another !..1L strongly agree in this matter. 6".7L of valid respondent remarked that credit card has a problem in transaction and another .".4L strongly agreed such statement. In reluctance of credit card by retailers 2"L of the respondent agreed on the statement, in other case 14L are indifferent. 2!L of respondent face problem in bill payment. In the other side .2L tick strongly disagrees and 16L are in indifferent. In _high rate of interest and chargesI of credit card 41.6L of the respondent strongly agreed on the statement and 41.6L moderately agreed on the statement. 5".!L of total valid percentage agrees upon that cash is easier transaction form that credit card. But in other side .2.7L disagreed on such statement. .""L of valid respondent believe that fraud transaction is a problem of credit card, where 5!.1L agreed on the statement and !5.5L strongly agreed on such statement. Preference of card in ranking; Preference >ank l >ank ! Aold (ilver <ebit and credit ! " 26 23 2 .

>ank 1 1 24 .

$otal 3" 3" 3"

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$nalysis of form competitor

5!L of respondent agreed that master card has more retail access than @I(# or @anik. On the other hand .!L disagreed on such matter. 36L of total respondent agreed that aster'ard has more #$ access than @I(# or @anik. But 2"L of respondent are indifferent such comment. 32L respondent mentioned than aster'ardIs charges are lower than @I(# or @anik In the other contrary 2!L respondent indifferent and 2L remerged disagree in such statement. 92

 In case of _easy operation in transactionI !6L disagreed that aster'ard is not easier than @isa or @anik in transaction. #gain !"L agreed on such statement. On the other hand 2!L are indifferent in such statement.

$nalysis of Industry Competitor: PBL @s )BL

.2L of respondents agreed upon that PBL have more retail access than )BL. On the other hand !4L of total respondent disagreed on such statement. $he largest number 1"/4"L0 remarked indifferent. 72L of respondent do not find any different in operation of transaction. In cash advance facilities, 1!L agreed upon that PBL is better. OB the other had !!L disagreed on such statement. 2"L are indifferent. !"L respondent agreed that PBL offers different types of card and limits than )BL 2L disagreed on such statement. On the other hand 52L are in different. PBL _charges and interest are reasonableI in such statement 3"L respondent disagreed on such statement and another 3"L were indifferent. ."L of respondent agree upon that PBL bill payment is easier. But 7"L of respondent are indifferent is such factor. PBL provides better customer service has been agreed by 22L of respondent. But 3!L are indifferent between PBL and )BL in this factor. 6L respondent remarked that PBL and is well accepted by the retailers, But 7"L of total respondent are indifferent. !"L of respondent replied PBL card give more satisfaction than )BL. 56L do not feel any difference between PBL and )BL in satisfaction.

PBL @s ('B
66L respondents disagreed that PBL has more retail access than ('B in which .!L strongly disagree on such statement. 4!L respondent agreed that ('B card is easier in transaction than PBL. On the other hand 16L are indifferent. 2"L respondent agreed on ('B has more cash advance facilities. In other contrary 3!L are indifferent. PBL offers different types of cards and limits Cin such reply .2L agreed on such statement, 4"L disagreed and !4L are in neutral. 3"L of the respondent does not agree that PBL offers reasonable charges and interest than ('B. On the other hand 22L are indifferent.= 5!L of the respondent reply that there is no significant difference between PBL and ('B in bill payment system. But !!L says that ('B is better than PBL. 56L of total respondent remarked that PBL customer service is not better than ('B, which .2L strongly disagreed on PBL service quality. 93

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 !2L retailer welcome ('B card rather PBL card other /54L0 are indifferent. Only !L respondent reply that PBL card give more satisfaction that ('B. On the other hand 34L says that ('B card give more satisfaction than PBL.

Merchant:
In preference of the transaction from .""L of the respondents /merchant0 like cash rather than credit. Preference of ranking of transaction form. >ank . 'ash 'heque 'redit 'ard 'redit .7 " " " >ank ! " . .5 ! >ank 1 . .6 ! . >ank 2 " . . .5

0actor affect in credit card selling:

7"L of the respondent reply that late bill payment is one of the ma,or cause not to prefer in credit card selling, in which 1"L of he respondent strongly agree on such statement. Only ."L disagree on such statement. >ate of commission is other problem of selling in credit card transaction. 5"L of the respondents agree upon such statement, where in 1"L strongly agreed on such remark. On the other kind !"L replied disagree. 4"L of total responses show that slow approval is a problem of credit /card0 selling in which !3L strongly agree on such problem. ."L remarks disagree from their belief. Lack of logistic support is a complicated head. 3"L of the respondents are indifferent in such comment. On the other head !3L agree and !3L respondents disagree on such statement. (elling in credit card shrunk profitability. 63L respondents agree upon such statement in which 1"L strongly agree on such opinion. Only ."L disagreed on such statement. (ales in credit card;

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Below 3L 3L to ."L ."L to !"L !"L to ore

.3L/of $otal respondent0 !"L 23L !"L

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$nalysis of 0orm Competitor

2"L respondents believe that aster'ard technology is better than @I(# or @anik. In the other hand 2"L respondent disagree upon such statement, where in 3L strongly disagree. aster'ard provide faster approval than @I(# H @anik, in such statement only 13L merchant agreed upon such issue. But 23L respondents do not agree upon such statement in which ."L remark strongly disagrees.

...1"L of respondent agreed that aster'ard provide more profit than @I(# H @anik. On the other hand .3L disagree upon such comment. 5"L of total respondent believe that numbers than the @I(# H @anik. aster'ard cardholder are more in

$nalysis of Industry Competitor: PBL @s )BL

43L respondent /merchant0 agrees upon than PBL payment system is better, where in ."L strongly recommend on PBL. PBL service is better than )BL, 33L respondent agreed on such remark, in which ."L strongly agree upon such remark. Only !3L are not satisfied with this opinion. Only !"L respondents believe that PBL uses upgraded technology. On the other hand ."L believe cast for opposition. 1"L respondents believe that PBL machine /of line0 are better than )BL. Only 3L disagreed on such remark, and 43L are indifferent. !3L respondent found that PBL give less time in authori+ation than )BL. But ."L disagree on such remark. On the other hand 43L are indifferent. In case of commission 53L respondent reply that there is no difference between PBL and )BL. But ."L agree upon and .3L disagree upon such statement. 2"L are satisfactory on mode of payment of PBL rather than )BL. But .3L believe in negative.

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PBL @s ('B;
43L respondents believe that ('B machine online is better than PBL. Only ."L believe that PBL is better. 13L of total respondent remark that PBL payment system is better than ('B. 9here in 3L strongly agree upon such statement, On the other hand 23L disagreed on such statement. 96

 5"L respondent reply PBL service is not upto the mark of ('B, where in !"L strongly neglected. Only ."L remarked on better PBL service. PBL technology is upgraded than ('B, in such statement 53L do not agree upon such statement. Only .3L reply positive on such remark. 3"L of total respondent do not find any difference between PBL and ('B machine of line. !"L favor PBL and 1"L favor ('B. In taking authori+ation 1"L believe PBL takes less time then ('B. On the other hand !3L favor ('B rather PBL. But the largest portion 23L does not find any difference. _>ate of commissionI is a competitive scenario in card merchant market. !3L of respondent agree upon that PBL commission is less than ('B where in ."L strongly agreed on such statement. On the other hand 1"L remark on ('B. But 23L do not find any difference. In mode of payment 13L remark favorably to PBL rather than ('B, in which 3L strongly favor to PBL. On the other hand !"L disagree in such statement. $he largest portion /23L0 does not find any difference in PBL and ('B payment system.

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'?#P$=>C5
anagerial Implication
PBL card division should set a specific mission which is clear and achievable. $hen they should analysis their resources and potentiality to set specific mission towards that mission. $hey need to define their market first. In cardholders analysis they should identify the potential cardholders who will easily use card in their purpose. In such case income, social status and family background should need to take account. InterCsection coCordinate is very poor. ost of the division taken does not know by others. (ometimes problem arise in one end do not want to solve by others. =ach section feels that they do the best and complicated work and others do not. In such contrary rotation or changes of table or end will helpful to know others works. $hey should need to motivate in a single team towards the corporate ob,ective and finally they must need to have transparency between the sections. $o avoid e-tra pressure it is needed to have transparency between division and higher authority by which they can know the real scenario and take strategic decision. $here is a tendency of employees to switch for better options. In some cases they switch to the competitors organi+ation. In such cases it is really harmful for the organi+ation. $o reduce switching of employees PBL should motivate its employees to feel PBL as their organi+ation. In this case special financial, social and personal benefits need to increase and ,ob security and environment needs to be improved. $o increase efficiency of the e-ecutives PBL needs to provide training facilities by which they can run the division efficiently. $o increase efficiency and better customer service PBL need to increase better logistic support like providing better software, improve better telecommunication network and other technical support. 'redit card is a new habit in our country. (o its current rate of return is very low. (ome of us compare credit banking with other retail banking and get frustrated. $hough its present is not well, but in future it has a tremendous opportunity. (o PBL should focus on future need to get prepare itself for the ne-t time conte-t.

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0or Cardholders
In preference of transaction form 'ash is most preferred by the cardholders. $here might be some advantages in cash rather than credit card. (o the demand of credit card might have to be increased by developing awareness campaigns and focuses the importance, facilities that may not get from the cash transaction. #mong the different cards /debit, #$ . credit0 there is a great demand of debit card. (ocial factors are one of the main causes of such effect. In our society very few people like to financial on credit card. 8acilities provided by debit card may include in credit card. akes those group conveniences in autoCdebit formula from his personal account. In other option, PBL can introduce debit card facilities in a single card, which, ('B is already going to launch few months later. Insufficient retail number is a great problem for cardholders who wish to pay cards. In such case PBL should increase merchant number. $his will habituate more cardholders and the volume of transaction will increase. Line down, illiterate merchant, electricity, etc. sometimes makes problem in credit transaction. PBL should use better technology, give merchant education and provide substitute electricity device in =<' machine. $o improve retailer reluctance PBL should campaign the merchant and make them the facilities if transaction. PBL may organi+e a seminar where prospect merchant and merchant who are in this group should be invited. In such seminar e-perienced merchants /like #gora, =lectra, #pon0 will share their e-perience, and cost analysts will show the social and economical benefits. # great portion of cardholders feel that there might be fraud transaction and it is an important cause in volume of transaction in credit card. In such contrary PBL should understand the security policy of cardholders and make them free and fear in credit card transaction. $here is a great demand of gold card rather then silver card to the cardholders. In such case PBL should make ease the matri- by which more cardholders can get gold card. It will give them mental satisfaction that will enhance more volume of transaction in credit card. @I(# and @anik is a strong competitor of aster'ard /in form competition0. ore retail access, more #$ access and low charges are the competitive advantage of aster'ard holders than @I(#H@anik holders. In other case some people believe that @I(# operation is faster than aster'ard. PBL should introduce @I(# as soon as possible because there is a huge demand of @I(# card. #s late as it will loose its market share cumulatively. In some cases there are very limited difference between )BL and PBL. Operation in transaction, cash advance facilities, bill payment system, 99

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retailersI well acceptance of card etc. $o get competitive advantage PBL should increase more facilities. # large portion of respondent remarked that )BL offers low charges and interest rate. But we found that only interest rate /P=L C !.3L, )BL C !L0 is a great factor in pricing where as the others charges are reasonable. In such contrary interest rate should be cut off in a competitive offering. (tandard 'hattered 'ard got some competitive advantage against Prime 'ard like _more retail access% easy operation in transaction% charges and interest are reasonable% better customer service% retailersI acceptance and more satisfactionI. In this situation, PBL should concentrate the above factors sincerely. PBL should increase the merchant number by aggressive marketing activities, increase promotional tools and increase e-penditure in marketing. Better technology should provide that makes the transaction easy within the least possible time. #t the same time corporate image and service developed that creates a competitive brand image in the market. Only ."L respondents transact 3L to ."L of total e-penditure in credit card. $o increase the volume and frequency of transaction, PBL should increase awareness campaign to the target income group of the society. It is found that age !3 to 2" years group e-pends the largest volume in credit card. (o marketing activities should special focus on such group and give more supplementary card to increase the volume of transaction. PBL should collect more information about its client to send gifts and for other promotional program. By this the rate of recovery will be higher when the cardholders feel a social tie with PBL. PBL can send; Birthday gift, marriage anniversary gift (pecial offer 'orporate offer /PBLIs other products0 'oCoffer with other organi+ation

PBL should focus the target group who will use card frequently. It may beC #ge limit !" to 2" years 9ell family background iddleCmiddle class to upper higherCclass income group Epper class supplementary cardholderIs likeCwife, children etc. 9ho frequently tours foreign countries

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0or Merchant
ost of the merchants prefer cash as a form of transaction. $here are some special benefits in cash rather than credit. PBL has to identify those demerits likeClate bill payment% rate of commission surrendered% slow approval% lack of logistic support% less profitability in credit card transaction. $o get a competitive advantage PBL should send merchantsI bill as early as possible.

>ate of commission is a ma,or factor in charging card. In such case PBL should set a dynamic commission policy that might reduce merchant obligation. $hey can set spell commission system in terms of volume of sales. (uch as onthly sale /$k.0; .."" to !3 """ >ate of commission 1."" L !.53 L !.3" L !.!3 L !."" L

!3 """ to 3" """ 3"""" to .""""" ."" """ to !"" """ ore than !"" """

(pecial concentrate on the high volume present and prospect merchant who transact ."L or more sales in credit card. 8rom a survey we found tat 43L respondents sell more than ."L in credit sales /card0, and among them more than !"L sales on credit card is oneCfifth of the total respondent /merchants0. ost merchants do not find any discrimination among @I(#, @anik and aster'ard. But a group of them believe that @I(# can get faster approval. (o PBL has to improve its communication network to compete with ('BIs @I(#.

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PBL get competitive advantage over )BL by providing better payment system% upgraded technology% better machine of line service and satisfactory mode of payment. $o hold this advantage PBL should improve the facility with fastness and efficiency. $o improve better payment system PBL can open merchant account in convenient branch by which merchant can get payment within the shortest time. #n on line system can improve the best payment service. (tandard 'hattered Bank is the market leader of credit card market. $o hold that position it takes some competitive positioning strategy that strongly differentiates from )BL and PBL. # good portion of merchants 101

believes that ('BIs machine on line is better than PBL. (o PBL should improve its B$$B line or have to find other alternatives that give better than the present. $o get better relation with merchants PBL should improve services, less time to take authori+ation% competitive commission offer and use better technology that can provide competitively better service. ('B is a multiCnational bank with good corporate reputation in Bangladesh. (o merchants feel prestigious to open an account in ('B. In such situation they can get their payment in on line where PBL is in traditional way. (o PBL should improve its faster payment system. $here are complains that PBL service is not up to the mark of ('B. In such contrary PBL service should improve in a competitive mark. But some other e-tent machine /of line0 service% time taking authori+ation% commission policy should be improved and upgraded to get competitive advantage against ('B and )BL.

Card Division:
'redit card culture is a new phenomenon in our society. ost of the people do not know much about it. $o e-pand its total market Prime Bank should take steps to build awareness and interest in the general mass. PBL can take the following strategies; 'ollect the different business, government, )AO and other social concern /from Fellow Page or other sources0 and write later to the '=O or in charge about credit card /what is credit card, function of credit card, uses, facilities, #$ uses, present world view and user rate in different countries and as well as PBL credit card offer0 8ormulate business or group offer to the particular offer to the particular business or nonCbusiness organi+ation with a bundle of benefits addressing the '=O. 8emale <(#s should be appointed to deal special prospect #pproach to the present #H' holders in different branches in a rebate as a promotional tool so that the prospect cardholder being a deposit on the bank as security. # relationship with merchant will be strong when the merchant will be a cardholder of PBL. In two types of relationship PBL can get more transaction from merchant and can be good valued cardholders. In such caseCgiving merchant in least cost would be a promotional tool. (ome cardholders get problem when they use the card for the first time. In this case PBL can provide information of full function of a card, uses of a card, #$ operation, cash withdrawals, fraud transaction in the time of dispatch of the card from the 'ard <ivision.

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 In response of credit limit increase claimed by the cardholders, PBL should assure that when the cardholder would follow the ideal rules of the credit card transaction limit will be provided according to his desire. arketing people are less motivated in their ,ob. <(#s says that their remuneration is only on the commission basis, like as follows[

'ard issued . to .7 Q $k.1"" per card 'ard issued !" to !2 Q $k.153 per card Z $k..""" mobile bill 'ard issued !3 or more Q $k.2"" per card Z $k..""" mobile bill In such situation they feel ,ob insecurity. $o increase otivation they need to fi- monthly amount and other financial incentives with the commission. On the other hand who deals with merchant marketing sometimes become frustrated. $hey feel that they do not get enough as their effort, labor and output. $hey want a commission on the total merchant income. In #ccount section, officers feel a load of work in the traditional manner. $hey deserve better software that will reduce paper and other unnecessary works. In Operation section officers want better software and better communication system mat can provide better and faster service to the cardholders. It is also needed to train of the service providers. In the >ecovery side, it is very difficult to collect the due amount or bad debts sometimes. In such case, efficient recovery agent is needed to recruit as commission basis. In case card process time, 'ard proposal and analysis and verification department should faster their activities with least time that may bring competitive advantage over the competitors. $here are complains of 'ardholders and erchants on 'ustomer (ervice <epartment. #s customersI problem is linked with other ends, when the 'ustomer (ervice <epartment is unable to solve it, they should divert the call to the perfect end. arketing people /card, merchant0 need a proper training of how to handle a prospect customer to develop awareness, interest, desire and action to make him a final customer. It can be done through hiring e-perts in sales and marketing in different organi+ation and university teachers.

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$oday customers are harder to please. $hey are smart, more price conscious. ore demanding, less forgiving and approach by more competitors with equal or better offers. $he challenge according to Geffrey Aitomer, is not to produce satisfied customer% several competitors can do this. $he challenge is to produce loyal customer. 9e can invest the following customer relationship building to increase loyalty;

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 >eactive arketing; $he sales person sales the product and encourages the customer /cardholders, merchants0 to call if heHshe has questions, comments or complains. #ccountable arketing; $he sales person phones the customer a short term after the sales to check whether the product is meeting e-pectation. Proactive arketing; $he company sales person contract the customer from time to time with suggestions about improved product uses or helpful new products. Partnership arketing;$he company works continuously with the customers to discover ways to perform better. PBL should need to follow above steps. (low interCbranch transaction often create problem in _payment due dateI of the cardholders. (ome cardholders complained that they paid before the payment due date, but they faced penalties and got a bad impression on card division. In such situation, online interCbranch transaction or better transaction process need to develop to minimi+e complains. erchant arketing is a new competitive arena of retail banking. (tandard 'hartered Bank has a strong relation with retailers. #s a result most of the good merchant has an account in ('B. #s a result ('B got a competitive advantage on faster payment on credit card to their merchant. PBL need to establish coCrelation with erchant arketing (ection of 'ard <ivision with erchant arketing (ection of arketing <ivision in a contingency approach to take a strategic marketing strategic to capture new merchant /deposit collection and credit transaction through PO( machine0 and provide better services.

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C#$% &R'F
'ontribution of Prime Bank 'ard to the 'ompany /PBL0 Arowth
Prime Bank has already completed three years of operation in card business. Because the card market was showing growth with the increasing acceptability of plastic money in many outlets, the business had become intensely competitive. ore players had entered into the market and some others were preparing for entry into the same. #s increasing number of customers were turning to the convenient features of credit card usage, we had stepped up marketing efforts to retain and enlarge our market share. 9e have already hired a group of marketing e-ecutives purely on commission basis to solicit prospective customers to be our cardholders. $hat has resulted in increasing the customer base and similarly we had enlarged merchant network for acquiring business as well. (ince then the ,ourney was for steady and sustainable growth. ?ere are some of our growth indicators, which will ,ustify the e-pectations of the Board with card business. $he bankIs earning capacity grew and the customers got a new product of plastic money, which gave them convenience. !rief overview of cost for Card Division #. 8i-ed #ssets schedule for the yearC!""3 Particulars 8i-ed assets <epreciation before charged depreciation and 7!6"534.6! !.232..12 7273!76..4 .,11.,51".42 .6,511.1" .13"241.72 8i-ed assets after depreciation 5,727,"!4..6 .73,6"6."2 6,.22,612.!!

=quipment machinery 8urniture $otal

B. Operating =-penses <epreciation Interest on prime general (alary and allowances Other e-penses .1.3" 6".22 27.!4 67.32

!1!.52

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'. Income from 'ard business; 8ee local 8ee International erchant commission Other income 7!.5. 41.1. !!.2. 1!6.!4

3"4.47

<. Profit generated from card business Profit 105 351.73

(ome Important >atio #nalysis; (I. )o . ! 1 2 Particulars >eturn on #ssets />O#0 >eturn on =-penses Field on advances 'ost of 8und Ep to GuneC"3 !1.".L ."4."1L !".51L .".3"L

Arowth of Income and Profit of credit cards /8igure in lac0 Particulars Income 8ees /local0 8ees /IntIl00 erchant 'ommission Other Income $otal Income Profit .4.73 54.23 17.37 17.4. "."" 3.1. 13.L "L 31.L 12.L !.5L 562L 7!.5. 41.1. !!.2. 1!6.!4 3"4.47 151.73 !.L 4"L 1!!L 4"L 33L 26L ....!3 53.75 !4.67 171.7. 4"6."1 226.52 !""" !"". Arowth Over !""" !""! Arowth Over C!"". =stimated yearC!""1

24.43 !"3.46 ."1..7 1!5."3 !6.4! !31."6

/=stimated growth is !"L in the year !""1 over the year !""!0

0ig: "haring %rofit B Income in the .ear 9::A

Contribution of Card Division to the mother concern is as follows:

Income /$k. in million.0 Prime Bank 'ard PBL !""1 .".1" .3.3.41 !""2 1!.5" .765.36 !""3 3".5" !!3".74

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=-penditure /$k. in million.0 Prime Bank Ltd. PBL 'ard <ivision !""1 7!!.21 !""2 .!1..27 5.2" !""3 .3"1..! !1.!5

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Profit /$k. in million.0 !""1 3!4.!" !.5" !""2 5"3."7 !3.." !""3 474.62 !5.2"

Prime Bank Ltd. PBL 'ard <ivision

8ig; =-planation of income and e-penditure through graph.

8ig; Profit (tructure of the credit 'ard of Prime Bank

(eparate Identity;
$hough 'ard <ivision is under ?ead Office, Prime Bank Limited, but it has separate identity. Its transaction code is .1" and it has to calculate income, e-penditure and profit as the other brunches of PBL. 'redit 'ard business is quite different from other banking business. It cannot collect deposit from people. $he classified loan /1"L0, interest rate /1"L0 and slow rate of return make it speciali+ed banking services.

Issues and 'hallenges;

$he credit card business has many issues and challenges as well. Enlike any other country, we issue two separate cardsC one for local taka currency and one for dollar for international usage. One global card for local and international usage will simplify the process and customers will be much benefited. $his may even lead to growth in card usage. In line with liberali+ed economy and open market concept, more reforms are required to encourage people to use credit card outside Bangladesh. One other issue, which leads the growth of card business, is connectivity. $he success of this business is dependent upon availability of communication line round the clock. (ince we rely on B$$B for our connectivity, it has become increasingly difficult to keep the line up at a desired level. Poor infrastructure and inadequate maintenance

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often cause disruption. ?owever in order to provide quality service to the customers, Prime Bank Limited is looking into state of the art solution outside B$$B. <efaults on credit cards are both an issue and challenge for the card operations. $o keep defaults at a minimum level has become an uphill task. Once our society consisted of conservative people with relatively low spending and minimum borrowing habits. But the scenario has undergone changes. <elinquency rate in card business has registered upward trend making the issue uneasy. $hough in Bangladesh market we are yet to hit the global benchmark of !"L defaults, the issuers have become more selective. In order to offset the loss from default, the interest rate has been kept as high as 1"L per annum. (ince the credit is allowed to cardholder without any security, the bank can hardly recover from organi+ed group of defaulters. =-isting recovery laws are inadequate and the loan courts take unusually long time. Prime Bank has engaged recovery agent on commission basis on recovered amount. $here is a need for constructive reform to recover bankIs money and the sooner it is done it is better for the country. #lliances and partnership with other business houses has become the order of the day so that core strength can be fully e-ploited. Prime Bank has been looking forward for such alliances and partnership to address new segments of the card market, which has not yet been reached by them. $heir strategy is to reduce the cost of doing business and utili+e the full capacity of our infrastructure. $he upshot is to make or create new avenues for business growth. It has already made alliance with ?(B' for issuing credit cards on their behalf. $his alliance will help it to access up market in the society. PBL e-pect quick surge in the card issue area from ?(B'Is customer base. $he Bank is also talking to (cholastica, a leading =nglish medium school for issuing e-clusive cards for the parents of the school children. PBL has also signed an agreement with another local bank =VI Bank to issue cards on their behalf and provide all support services. #ll these are likely to contribute in our growth and overall profitability in the days to come.

)ew
?(B'

arket Opportunity;

?(B' is interested in issuance of local credit card for their customers. #ccording to their estimate, they have a base of !",""" customers who are likely to be cardholders. $his base is likely to e-pand progressively with addition of new customers every month. $he relationship will be; .0 Prime Bank will be fully responsible for credit risk, collection activities, funding, and interest income. Bad debts would be for Prime Bank Limited !0 Prime Bank Limited would do card issue and embossing. 10 #nnual membership fee would be split at a certain ratio. 20 erchant acquiring would be Prime BankIs responsibility. 30 erchant commission would be split at a certain ratio. $o add to the above, ?(B' has put forward a draft business model containing appro-imate cost benefit analysis of coCbranding credit card with Prime Bank Limited. $he net income from this segment would be $k. 35,7.",""".""

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-otes to the 0inancial "tatements for the year ended ?( December8 9::A8 9::@8 9::? of %rime !an2 )td=
108

#ssets;
Particular 'redit 'ard !""3 16,142,315 !""2 .6,."",623 !""1 .3,"1!,3"1

Liabilities;
Particular 'redit 'ard !""3 1",67.,674 !""2 .,767,262 !""1 C

Operating Income;
Particulars 'redit 'ard Income /)oteC!1.!0 !""3 22,256,44! !""2 11,44",76. !""1 1.,."7,27.

'redit 'ard Income;

Particulars #nnual 8ees Late Payment fees InterCchange, arkC up, e-cess limit, cash advance fees etc. Others !""3 .4,54!,756 3,6"6,662 .",773,433 .",7..,.23 !""2 ..,762,377 2,2.3,571 5,77.,3"1 7,!47,"63 !""1 .2,4!2,16" 1,63.,..2 6,4.!,"77 2,"!.,676

=-penses;
Particulars 'redit 'ard =-penses !""3 .2,!4!,4!4 !""2 .",645,43. !""1 .!,2.1,126

>eceipt from operating activities;

Particulars 'redit 'ard Income !""3 22,256,44! !""2 11,44",76. !""1 1.,."7,27.

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Increase of assets;
Particulars 'redit 'ard !""3 16,142,315 !""2 .6,."",623 !""1 .3,"1!,3"1

Increase of Liabilities;
Particulars 'redit 'ard !""3 1",67.,674 !""2 .,767,262 !""1 C

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CO-C),"IO$he popularity of credit cards in Bangladesh looks set to grow by leaps and bounds as domestic and foreign banks capitali+e on the nationIs infant credit card market and growing affluence. 'ard segment will undergo skyrocketing growth in future, sparked by fierce competition from several other banks. #n increased use of credit card and foreign e-change cards coinciding with the e-pansion of personal banking services, crossCborder business and travels is helping the e-plosion. 9eQw Prime Bank is fully aware of this e-plosion. Prime Bank has already renewed our marketing efforts to increase our market share. PBL is trying to improve its quality in the competitive card market with its limited resources and always try to monitor the competitorsI trail.

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