Customer Satisfaction on Home Loan in Bangladesh:

A Comparative Study of Some Selected Financial Institutions

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Chapter: One Introduction Part Page No.
1.1 Introduction
1.2 Purpose of the Report
1.3 Scope of the Report:
1.4 Objective of the Study
1.5 Limitations of the Report
1.6 Methodology of the Report
1.7 Significant Recent Events of the
Industry

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1. Introduction
The word Bank refers to the financial institution deals with money. Commercial banks are
the primary contributors to the economy of the country. On the other hand they are borrowing
money from the locals and lending the same to the business as loans and advances. So the
people and the government is very much dependent on these banks as the financial
intermediary. Moreover, banks are profit - earning concern, as they collect deposit at the
lowest possible cost and provide loans and advances at higher cost. The differences between
two are the profit for the bank.

Involvement of the banking sector in different financial events is increasing day by day. At
the same time the banking process is becoming faster, easier and the banking arena is
becoming wider. As the demand for better service increases, the banking organizations are
coming with innovative ideas. In order to survive in the competitive field of the banking
sector, all banking organizations are looking for better service opportunities to provide to
their clients. As a result, it has become essential for every person to have some idea on the
bank and banking procedure.

A student takes the thesis program when he or she is at the last leg of the MBA degree thesis
program brings a student closer to the real life situation and thereby helps to launch a career
with some experience.

1.2 Purpose of the Report:

The main purpose of the report is to fulfill the three-credit of MBA course Research Project
and it is partial fulfillment of the MBA Program in the University of Information Technology
and Science. This report is submitted to School of Business of UITS.

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1.3 Scope of the Report:

The report covers different departments of The Some selected Financial Institutions, like
Loan sector and general banking.

1.4 OBJECTIVE OF THE STUDY

The first objective of writing this report is to fulfill the partial requirements of the MBA
program. Other objectives of the report are:
To familiarize with the operation in the financial institutions arena including
management overview of financial institutions and analysis of financial institutions
operation in customer satisfaction & loan section.
To provide a general description of the loan section,
To provide an exposure of practices of different financial institutions activities of The
financial institutions.
To observe the existing rules for financial institutions.
To find out current performance of financial institutions in the home loan of
competitive financial institutions.
To analyze the strength, weaknesses, opportunities and threats for financial
institutions.
To increase the analytical capability on financial institutions management.
To give some Recommendations & some guidelines to improve the effectiveness and
effectiveness of financial institutions.

1.5 Limitations of the Report

The limitations are given below-

The main constraint of the study was insufficiency of information which is highly
required for the study.
Unavailability to required published documents.

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 It was very different to collect the information from various personnel for the job
constrain.
Organization policy was not disclosing some data and information for obvious
reasons.
Lack of a wider coverage due to time constraint. We did not have much time to visit
all the relevant places and meet respective personnel.

1.6 Methodology of the Report

Sources of Data collection:

This report has been made on the basis of different kinds of information. This information is
collected from two types of sources. They are primary source and secondary source.

The primary sources are:

I was collected information of my report as student by asking queries to various level

personnels. They helped me very much without showing any irritation. Information and data
regarding Overview of the Financial institutions, Products and Schemes, interest rates &
charges, credit operations, etc. were collected from these sources.

The secondary sources are:

Annual Report of The Financial institutions, Financial institutions Companies Act, Different
Publications regarding Financial institutions functions, credit policies, newspapers &
magazines, bank web site, Practical Orientation Report of previous years.

1.7 Significant Recent Events of the Industry

The outputs and data that can be drawn from this research will be of great contribution to the
field in the academics and for the practitioners. This study will try to assess and evaluate the

5 | Page
level of satisfaction of the customers in the financial institutions business in Bangladesh, thus
revealing and studying the salient and influential factors that could affect the satisfaction of
the customers. It will also reveal areas and factors that need consideration for improvement. It
will also try to link the relationship, if any, of the customer satisfaction level and the success
of the firm, in support of the other previous literatures. This study then will ultimately assess
and reveal the strong points of the Bangladeshi financial institutions and its edges as reasons
for the continuous boom and development in it financial industries.

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 Chapter: Two Brief Profile Four Financial Page No.
Institution of Bangladesh

2.1 IDLC

2.2 Islami Bank Ltd

2.3 Prime Bank

2.4 Pubali Bank Ltd.

2.5 Standard Chartered Bank

2.1 IDLC
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About Us
IDLC was initially established in Bangladesh in 1985 through the collaboration of
International Finance Corporation (IFC) of the World Bank, German Investment and
Development Company (DEG), Kookmin Bank and Korean Development Leasing
Corporation of South Korea, the Aga Khan Fund for Economic Development, the City Bank
Limited, IPDC of Bangladesh Limited, and Sadharan Bima Corporation. As the company
evolved, initial foreign shareholding of 49% was gradually withdrawn and the last foreign
shareholding was bought out by local sponsors in 2009.
Although we initially started with Lease Financing as our core product, IDLC has grown to
become the largest multi-product Non-Bank Financial Institution of Bangladesh, with almost
equal focus in Corporate, Retail and SME sectors. Moreover , IDLC has a significant
presence in the Capital Markets. Our merchant banking arm, IDLC Investments Limited, a
wholly-owned subsidiary of IDLC is a premier brand for investment banking in the country.
Our stock brokerage arm, IDLC Securities Limited, another wholly-owned subsidiary of
IDLC is also amongst the top five brokers in the country .
Over the years, IDLC has attained a significant presence in the corporate sector of
Bangladesh. IDLC is highly respected by our clients, peers, employees and regulators for our
strong corporate governance, statutory compliance, high ethical standards, a progressive and
enabling working environment, and strong commitment to environmental and social
development.
IDLC continues to play a pioneering role in introducing and popularizing a variety of
financial instruments suiting ever-changing requirements of its fast-growing clients. We are
continuously expanding our presence to ensure the best quality of service to our clients at all
times.

Vision, Mission and Values

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Vision

We will be the best financial brand in the country.

Mission
We will focus on quality growth, superior customer
experience and sustainable business practices.

Strategic Objectives 2012/2013

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 Grow and develop our talent pool

Fully leverage new core banking platform

Optimize distribution points

Grow and diversify funding sources

Grow sales and service capabilities in Consumer Division

Aggressively grow SME portfolio

Focus on top-tier clients in Corporate

Consolidate capital market operations and enhance capabilities

Embrace internationally accepted corporate governance and sustainable business practices

Our Values

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Our Code of Conduct and Ethics

In accordance with the approved and agreed Code of Conduct, IDLC employees shall:

Act with integrity, competence, dignity and in an ethical manner when dealing with
customers, prospects, colleagues, agencies and the public

Act and encourage others to behave in a professional and ethical manner that will reflect
positively on IDLC employees, their profession and on IDLC at large

Strive to maintain and improve the competence of all in the business

Use reasonable care and exercise independent professional judgment

Not restrain others from performing their professional obligations

Maintain knowledge of and comply with all applicable laws, rules and regulations

Disclose all conflicts of interest

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 Deliver professional services in accordance with IDLC policies and relevant technical and
professional standards

Respect the confidentiality and privacy of customers, people and others with whom they
do business

Not engage in any unprofessional conduct involving dishonesty, fraud, deceit or

misrepresentation or commit any act that reflects adversely on honesty, trustworthiness or
professional competence

IDLC employees have an obligation to know and understand not only the guidance contained
in the Code of Conduct but also the spirit

on which it is based.

IDLC Finance Limited is Bangladeshs largest and fastest growing Non-Banking Finance
Institution (NBFI)

Our legacy

IDLC Finance Limited, incorporated as Bangladeshs pioneering leasing company, was

established in Dhaka in 1985 and was constituted through the collaboration of International
Finance Corporation (IFC), German Investment and Development Company (DEG),
Kookmin Bank, Korea Development Financing Corporation, The Aga Khan Fund for
Economic Development, The City Bank Limited, IPDC of Bangladesh Limited and Sadharan
Bima Corporation.

Who we are today

IDLC has emerged as a pioneering multi-product NBFI in Bangladesh with 26 branches and
over 642 team members.

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What we offer

IDLC offers a wide range of products and solutions comprising loans, deposit and capital
market products and services to corporate, consumer and SME clients.

Our subsidiaries

IDLC also operates two wholly-owned subsidiaries in the capital markets through IDLC
Investments Limited (providing merchant banking services) and IDLC Securities Limited
(providing brokerage services).

Our listing

IDLC is listed on the Dhaka and Chittagong stock exchanges. The Companys market c
pitalisation stood at Taka 10,119 million as on

Our promoters/ directors holding

The promoters/ directors of IDLC hold 63.82% of the Companys common equity.

Dividend declared, 2013 IDLC has declared a stock dividend @ 25% (one Bonus share for
every four shares held) and cash dividend @ 5% (Taka 0.50 per share) for 2013.

Our Products & Services Basket catering to wide-ranging customer needs and requirements

Small and Medium Enterprise (SME)

Small Enterprise Finance

Small Enterprise Loan/ Lease

Seasonal Loan

Women Entrepreneur Loan

SME Shachal Loan

SME Surakkha

SME Deposit

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 Medium Enterprise Finance

Medium Enterprise Lease/ Loan

Commercial Vehicle Finance

Machinery Lease

Healthcare Finance

Revolving Short Term Loan

SME Deposit

Supplier & Distributor Finance

Factoring of Accounts Receivable

Bill/Invoice Discounting

Work Order Financing

Distributor Financing

Consumer finance

Home Loan

Flexible Term Deposit Package

Car Loan

Regular Earner Package

Personal Loan

Loan Against Deposit

Corporate Division

Corporate finance

Lease Financing

Term Loan Financing

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 Working Capital Arrangement

Project Financing Appraisal

Specialized Products

Structured finance solutions

Loan/ Lease Syndication

Private Placement of Equity

Preference Shares

Project/ Infrastructure Finance

Bond

Foreign Currency Loan

Refinancing of Special Funds

Mergers & Acquisitions

Joint Venture Matchmaking

Balance Sheet Restructuring

Feasibility Study

Securitization of Assets

Structured Solutions

Treasury

Common Equity Investments

Term Placement

Call Placement

Zero Coupon Bonds

Debenture

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Capital markets

IDLC Securities Limited

Brokerage Service

CDBL Service

IDLC Investments Limited

Margin Loan Operations (Cap Invest)

Discretionary Portfolio Management (MAXCAP)

Corporate Advisory

Issue Management

Underwriting

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Our Organization Chart (Organogram)

Our Business Model Review

IDLC Finance Limited is Bangladeshs premier financial services Group in the NBFI (non-
banking financial institutions) space, providing a wide range of deposit solutions on the one
hand and offering a diverse set of loans and advances to a vast number of SMEs (small and
medium enterprises) corporate and consumers on the other. We typically operate in segments
of the financial market where we can strategically differentiate ourselves and leverage our
core competencies to counter competitive pressures from peers in the NBFI space as well as
from traditional financial institutions including banks. Though each of our businesses is
distinct with specialised and focused teams, they collaborate on a number of key attributes,
which not only help us drive synergies but also enable us to offer differentiated yet integrated
propositions to our clients. This underpins our long track record of financial performance
through economic cycles while our deposits have grown at a compounded annual growth

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rate (CAGR) of 31% over 2009-13, our loan book has reported a CAGR of 20% over the
same period. The key features of our business model are highlighted below:

Simple

Our business activities are organised and straightforward. We offer deposit and loan
solutions that cater to a wide range of needs and requirements; we provide capital market and
merchant banking services; we also trade securities and provide advice and investment
management solutions to our customers.

We offer simple products with straightforward, transparent and unambiguous pricing.

Our Balance Sheet is transparent and we do not invest in complex securities products or
derivatives. As a prudent measure, we provided for provisioning of Taka 1,044 million

in 2013 with a provisioning coverage ratio on our gross loans of 3% (consolidated level).

Expert

Our employees are specialists in their fields with strong knowledge of their products and
markets with an exceptional ability to establish strong bonds with our customers.

Our experienced local teams cover every corner of the Bangladesh market and have
delegated decision-making authority (enabling capture of opportunities with speed and
surety) with strong central oversight.

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 Our remuneration structures aim to balance long and short-term performance to keep our

teams motivated and energised and ensure a culture of high productivity.2.2 Islami
Bank Ltd.

Overview of Islami Bank Ltd.

Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in
commercial banking business based on Islamic Shari'ah with 63.09% foreign shareholding
having largest branch network ( total 286 Branches) among the private sector Banks in
Bangladesh. It was established on the 13th March 1983 as the first Islamic Bank in the South
East Asia.

It is listed with Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. Authorized
Capital of the Bank is Tk. 20,000.00 Million and Paid-up Capital is Tk. 14,636.28 Million
having 33,686 shareholders as on 31st December 2013.

Mission

To establish Islamic Banking through the introduction of a welfare oriented banking system
and also ensure equity and justice in the field of all economic activities, achieve balanced
growth and equitable development in through diversified investment operations particularly
in the priority sectors and less developed areas of the country. To encourage socio-economic
upliftment and financial services to the loss-income community particularly in the rural
areas.

Vision

Our vision is to always strive to achieve superior financial performance, be considered a

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leading Islamic Bank by reputation and performance.

Our goal is to establish and maintain the modern banking techniques, to ensure soundness
and development of the financial system based on Islamic principles and to become the
strong and efficient organization with highly motivated professional, working for the benefit
of people, based upon accountability, transparency and integrity in order to ensure stability of
financial systems.

We will try to encourage savings in the form of direct investment.

We will also try to encourage investment particularly in projects which are more likely to
lead to higher employment.

Strategic Objectives

To ensure customers' satisfaction.

To ensure welfare oriented banking.

To establish a set of managerial succession and adopting technological changes to

ensure successful development of an Islamic Bank as a stable financial institution.

To prioritize the clients welfare.

To emerge as a healthier & stronger bank at the top of the banking sector and
continue stable positions in ratings, based on the volume of quality assets.

To ensure diversification by Sector, Size, Economic purpose & geographical location

wise Investment and expansion need based Retail and SME/Women entrepreneur
financing.

To invest in the thrust and priority sectors of the economy.

To strive hard to become a employer of choice and nurturing & developing talent in a
performance-driven culture.

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 To pay more importance in human resources as well as financial capital.

To ensure lucrative career path, attractive facilities and excellent working

environment.

To ensure zero tolerance on negligence in compliance issues both shariah and

regulatory issues.

To train & develop human resources continuously & provide adequate logistics to
satisfy customers need.

To be excellent in serving the cause of least developed community and area.

To motivate team members to take the ownership of every job.

To ensure developemnt of devoted and satisfied human resources.

To encourage sound and pro-active future generation.

To achieve global standard.

To strengthen corporate culture.

To ensure Corporate Social Responsibilities (CSR) through all activities.

To promote using solar energy and green banking culture and echological balancing.

Core Values

Trust in Almighty Allah

Strict observance of Islamic Shariah

Highest standard of Honesty, Integrity & Morale

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 Welfare Banking

Equity and Justice

Environmental Consciousness

Personalized Service

Adoption of Changed Technology

Proper Delegation, Transparency & Accountability

Commitments

To Shariah

To the Regulators

To the Shareholders

To the Community

To the Customers

To the Employees

To other stakeholders

To Environment

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Organization Structure

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Corporate Information

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Financial Information: [ As on: 31 December 2013 ]

BDT (Tk.) US Dollar ($)

Authorized Capital 20,000.00 Million 257.23 Million

paid-up Capital 14,636.28 Million 188.25 Million

Equity 45,511.90 Million 385.36 Million

Reserve Fund 29,149.01Million 374.91 million

Deposits 473,140.96 Million 6,085.41 Million

Investment
(including Investment in 474,015.95 Million 6,096.67 Million
Shares)

Foreign Exchange
BDT (Tk.) US Dollar ($)
Business

Import 285,890 Million 3,677.04 Million

Export 205,269 Million 2,640.12 Million

Remittance 286,956 Million 3,690.75 Million

Organizational Information:

Chairman, Board of
Prof. Abu Nasser Muhammad Abduz Zaher
Director

Managing Director &

Mohammad Abdul Mannan
CEO

Company Secretary Abu Reza Md. Yeahia

CFO Mohammad Nesar Uddin, FCA, ACMA

Number of Zones 15

Number of Branches 286

Number of AD
48
Branches 25 | P a g e

Number of ATM Booth 298

Products & Services

Local Currency Deposit Accounts

1. Al-Wadeah Current Account

2. Mudaraba Savings Account

3. Mudaraba Term Deposit Account

4. Mudaraba Special Notice Account

5. Mudaraba Special Savings (Pension) Account

6. Mudaraba Hajj Savings Account

7. Mudaraba Savings Bond Account

8. Mudaraba Waqf Cash Deposit Account

9. Mudaraba Monthly Profit Deposit Account

10. Mudaraba Muhar Savings Deposit Account

11. Students Mudaraba Savings Account

12. Mudaraba Farmers Saving Account

13. Mudaraba NRB Savings Bond (MNSB)

Deposit Products in Foreign Currency

1. Mudaraba Foreign Currency Account (MFCA)

2. Mudaraba Exporters Retention Quota

Account (MERQ)

3. Foreign Currency Account (FCA)

4. Foreign Currency Account (ERQ)

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5. Foreign Currency Account of EPZ Enterprise

6. Resident Foreign Currency Deposit Account

(RFCD)

7. Non-Resident Foreign Currency Account of

Exchange Houses/Banks

Products in Off-shore Banking Unit (OBU)

Deposit products

1. Al-Wadeah Current Account

2. Mudaraba Savings Account

Investment Products

1. Bill Financing (Mudaraba Documentary Bills

UPAS)

2. Import Financing

3. Export Financing

4. Short-term Murabaha

5. Project Finance (HPSM term investment)

Foreign Remittance Products

1. Remittance Card

2. Foreign Demand Draft

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Foreign Remittance Services

1. Central Crediting of Remittances

2. Payment of 3rd Bank Remittance through

TT & PO

3. Payment of Spot Cash Remittances-

Online and Web-based

4. Centralised NRB Account Opening

5. SMS Notification

6. SMS Push Pull Service

7. Maintaining of NRD & NRT Accounts

Investment Products

1. Bai-Murabaha

2. Bai-Muajjal

3. Bai-Istijrar

4. Bai-Salam

5. Bai-Istisna

Services

6. Hire Purchase under Shirkatul Melk (HPSM)

7. Mudaraba

8. Musharaka

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9. Musharaka Investment in Potato Storage

10. Murabaha Post Import (MPI)

11. Murabaha Import Bills (MIB)

12. Murabaha Import LC

13. Bai-Muajjal Back to Back Bills

14. Bai-as-sarf (Foreign Documentary Bill: FDB)

15. Bai-as-sarf (Foreign Currency Cheques/Drafts:

FCD)

16. Murabaha Foreign Currency Investment

(MFCI)

17. Musharaka Documentary Bill (MDB)

18. Bai-Salam (Pre-shipment)

19. Mudaraba NRB Entrepreneur Investment

Scheme (MNEIS)

Welfare-oriented Special Investment

Schemes

1. Household Durable Scheme (HDS)

2. Housing Investment Scheme (HIS)

3. Real Estate Investment Program (REIP)

4. Transport Investment Scheme (TIS)

5. Car Investment Scheme (CIS)

6. Investment Scheme for Doctors (ISD)

7. Small Business Investment Scheme (SBIS)

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8. Agriculture Implements Investment Scheme

(AIIS)

9. Rural Development Scheme (RDS)

10. Micro Enterprise Investment Scheme (MEIS)

11. Urban Poor Develepment Scheme (UPDS)

12. Micro Industries Investment Scheme(MIIS)

13. Women Entrepreneurs Investment Scheme

14. Palli Griha Nirman Beniyog Prakalpa

15. NRB Entrepreneurs Investment

Scheme(NEIS)

16. Solar Panel Investment Scheme(SPIS)

ATM Services

1. Cash Withdrawal

2. Fund Transfer

3. Mini Statement of Accounts

4. Balance Enquiry

5. Payment of Utility Bills (Electricity, Water,

Phone and Gas etc.)

Locker Service

Our safe deposit locker service offered from select branches gives you a completely secured
facility for safekeeping of precious items, confidential documents and other valuables.

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Services

o Personalised service

o Facilities to access outside scheduled time

o Parcel handling

o Safe custody of goods and bonds/shares

o Lockers available in various sizes. i.e. Small, Medium and Large.

Terms & Condition

For obtaining a Locker at IBBL you must be an account holder with our Bank.

Lockers can be allotted individually as well as jointly.

The Locker holder is permitted to add or delete names from the list of persons who
can operate the Locker and can have access to it.

Loss of Key is to be immediately informed to the concerned Branch.

For Schedule of Rentals, please contact the branch nearest to you.

An individual (not minor), firms, limited company, associations, clubs, trusts,

societies, etc may hire a locker.

Locker Service Available @

Head Office Complex Branch

Farmgate Branch

New market Branch

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 Kawran Bazar Branch

Sylhet Branch

Rajshai Branch

Elephant Road

Cox's Bazar

Anderkilla Branch

Chiringa Branch

Gulshan Branch

Dhanmondi Branch

Uttara Branch

VIP Road Branch

Khulna Branch

Agrabad Branch

Chawkbazar

Mouchak

CDA Avenue Branch

Feni Branch

Other Banking and Value Added Services

1. Payment Order (PO)

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2. Demand Draft (DD)

3. Telegraphic Transfer (TT)

4. Locker Service

5. Quard against TDR

6. Counseling

7. Online Banking

8. SMS Banking

9. Internet Banking (i-banking)

10. IBBL Web portal facility

11. Islami Bank mCash

12. Letter of Credit

13. Back-to-Back Letter of Credit

14. Bank Guarantee

15. Foreign Bank Guarantee

16. Murabaha Import Bill under UPAS

17. Export Bills Collection

18. Substitute Cash Assistance

19. SWIFT

20. Outward Remittance

a. Travel purpose

b. Study purpose (Student File)

c. Medical purpose

d. Others

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21. Inward remittance

a. Encashment of cash Foreign Currency

b. Collection of F.C. Cheques/Drafts

c. Payment of Foreign TT & DD

d. Others

Treasury Activities

Dealing Room Operations:

1. Foreign Exchange Operations

2. Money Market Operations

Special Services through Islami Bank

Foundation

1. Islami Bank Hospitals

2. Islami Bank Medical College, Rajshahi

3. Islami Bank Community Hospitals

4. Islami Bank Nursing Training Institute;

5. Islami Bank Institute of Health Technology

6. Islami Bank Homeopathic Clinics

7. Monorom: Islami Bank Crafts & Fashion

8. Islami Bank Service Centre

9. Islami Bank Institute of Technology

10. Islami Bank International School and College

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11. Islami Bank Model School

12. Islami Bank Mohila Madrasah

13. Bangladesh Cultural Centre

14. Distressed Women Rehabilitation Centre

Training Services

1. International : Officials of Foreign Banks on

Islamic Banking

2. National : Training of own work force & others

on Islamic Banking

35 | P a g e
 2.3 Prime Bank

About Prime Bank

In the backdrop of economic liberalization and financial sector reforms, a group of highly
successful local entrepreneurs conceived an idea of floating a commercial bank with different
outlook. For them, it was competence, excellence and consistent delivery of reliable service
with superior value products. Accordingly, Prime Bank was created and commencement of
business started on 17th April 1995. The sponsors are reputed personalities in the field of
trade and commerce and their stake ranges from shipping to textile and finance to energy etc.

As a fully licensed commercial bank, Prime Bank is being managed by a highly professional
and dedicated team with long experience in banking. They constantly focus on understanding
and anticipating customer needs. As the banking scenario undergoes changes so is the bank
and it repositions itself in the changed market condition.

Prime Bank has already made significant progress within a very short period of its existence.
The bank has been graded as a top class bank in the country through internationally accepted
CAMELS rating. The bank has already occupied an enviable position among its competitors
after achieving success in all areas of business operation.

Prime Bank offers all kinds of Commercial Corporate and Personal Banking services
covering all segments of society within the framework of Banking Company Act and rules

36 | P a g e
and regulations laid down by our central bank. Diversification of products and services
include Corporate Banking, Retail Banking and Consumer Banking right from industry to
agriculture, and real state to software.

Prime Bank, since its beginning has attached more importance in technology integration. In
order to retain competitive edge, investment in technology is always a top agenda and under
constant focus. Keeping the network within a reasonable limit, our strategy is to serve the
customers through capacity building across multi-delivery channels. Our past performance
gives an indication of our strength. We are better placed and poised to take our customers
through fast changing times and enable them compete more effectively in the market they
operate.

Our Vision

To be the best Private Commercial Bank in Bangladesh in terms of efficiency, capital

adequacy, asset quality, sound management and profitability having strong liquidity.

To build Prime Bank Limited into an efficient, market-driven, customer focused institution
with good corporate governance structure.

Continuous improvement of our business policies, procedure and efficiency through

integration of technology at all levels.

Corporate Philosophy

For our Customers

To provide the most courteous and efficient service in every aspect of its business. To be
innovative in the development of new banking products and services.

For our Employees

By promoting their well-being through attractive remuneration and fringe benefits.

By promoting good staff morale through proper staff training and development, and provision
of opportunities for career development.

For our Shareholders

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By forging ahead and consolidating its position as a stable and progressive financial
institution.

By generating profits and fair return on their investment.

For our Community

By assuming our role as a socially responsible corporate citizen in a tangible manner By

adhering closely to national policies and objectives thereby contributing towards the progress
of the nation.

By upholding ethical values and best practices.

Constantly seeking to improve performance by aligning our goals with stakeholders

expectations because we value them.

Our Efforts are Focused

On delivery of quality services in all areas of banking activities with the aim to add increased
value to shareholders investment and offer highest possible benefits to our customers.

Corporate Milestones

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 05.02.1995 Memorandum and Articles of Association signed by the sponsors

12.02.1995 Incorporation of the company

12.02.1995 Certificate of commencement of Business

20.02.1995 License issued by Bangladesh Bank

1995
08.04.1995 License issued for opening the first branch, Motijheel

17.04.1995 Formal launching of the Bank

17.04.1995 Commencement of Business from Motijheel Branch

18.12.1995 Commencement of Islamic Banking Business from IBB, Dilkusha

29.08.1999 Initial Public offering - Publication of Prospectus

09.09.1999 Initial Public offering - Subscription Opened

1999
22.09.1999 Initial Public offering - Subscription closed

15.11.1999 Listed with Chittagong Stock Exchange Limited

2000 27.03.2000 Listed with Dhaka Stock Exchange Limited

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 29.03.2000 Trading of Shares in Dhaka Stock Exchange Limited

29.03.2000 Trading of Shares in Chittagong Stock Exchange Limited

2001 29.03.2001 Registered Merchant Banker with SEC

2005 17.04.2005 Completion of 10 years of service

Introduction of Prime Exchange Co. Pte. Ltd. (Subsidiary of

2006 08.07.2006
Prime Bank Limited)

15.03.2007 Opening of First Off-shore Banking Unit at DEPZ , Savar, Dhaka

2007
01.04.2007 Introducing of Temonous as Core Banking Software T24

2008 11.03.2008 Launching of ATM

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2009 01.08.2009 Launching of Internet Banking

02.08.2010 Introducing of PBL Exchange UK Limited - London Branch

2010 03.08.2010 Introducing of PBL Exchange UK Limited - Birmingham Branch

04.08.2010 Introducing of PBL Exchange UK Limited - Oldham Branch

Introduction of Prime Exchange Co. Pte. Ltd. (Jurong East

2011 22.02.2011
Branch)

Strategic Priority:

Maintain satisfactory capital to support growth and remain compliant.

Have a strong customer focus and build relationship based on integrity, superior
service and mutual benefit.
Continue to provide new service to customers with support of superior information
technology platform.
Ensure effective risk management for sustainable growth in shareholders value.
Diversification of loan portfolio through structured finance and expansion of Retail
and SME financing.
Explain of brand image by in house capacity development through continuous
training
Be leading in serving the interest of our community and country.

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Hierarchy of Prime Bank Limited:

Managing Director (MD)

Additional Managing Director (AMD)

Deputy Managing Director (DMD)

Senior Executive Vice President

(SEVP)

Executive Vice President (EVP)

Senior Vice President (SVP)

Vice President (VP)

Senior Assistant Vice President

(SAVP)

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 Assistant Vice President (AVP)

First Assistant Vice President (FAVP)

Senior Executive Officer (SEO)

Executive Officer (EO)

Senior Officer (SO)

Management Trainee (MT) Officer (O)

Junior Officer (JO)

2.4. Pubali Bank Ltd. Trainee Assistant (TA)

Overview of Pubali Bank Limited

Pubali Bank Limited is the largest Commercial Bank in the Private Sector in Bangladesh. It
provides mass banking services to the customers through its branch network all over the
country. This Bank has been playing a vital role in socio-economic, industrial and agricultural
development as well as in the overall economic development of the country since its
inception through savings mobilization and investment of funds. During the last 5 years the
growth rate of bank's earnings is more than 25% on average.

History of the Pubali Bank Limited

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The Bank was initially emerged in the Banking scenario of the then East Pakistan as Eastern
Mercantile Bank Limited at the initiative of some Bengali entrepreneurs in the year 1959
under Bank Companies Act 1913. After independence of Bangladesh in 1972 this Bank was
nationalized as per policy of the Government and renamed as Pubali Bank. Subsequently due
to changed circumstances this Bank was denationalized in the year 1983 as a private bank
and renamed as Pubali Bank Limited. The Government of the People's Republic of
Bangladesh handed over all assets and liabilities of the then Pubali Bank to the Pubali Bank
Limited. Since then Pubali Bank Limited has been rendering all sorts of Commercial Banking
services as the largest bank in private sector through its branch network all over the country.
There are 366 branches all over Bangladesh doing business as well as giving services to the
people. The Head Office of the Bank is situated at 26, Dilkusha commercial Area on its
fourteen-storied own building. It is listed in the Stock Exchanges at Dhaka and Chittagong as
publicly traded company for its general class of shares. In 1983 PBL started their new
journey with the deposit of Tk. 645.14 Crore and they sold 16 Lac shares in the market.

Economical Backgrounds

In 1983 PBL started their new journey with the deposit of 645.14 crore taka and they sold 16
lac share in the market.

Vision

To stand out as a pioneer banking institution in Bangladesh and contribute significantly to the
national economy. By assuring customer satisfaction for its customers and through proper
training of its most selected group of employees its mission. Also through constant innovation
of its product line and establishing constant networking with prospective corporate clients it
plans to accomplish its mission.

Banks Mission

High quality financial services with the help of latest technology.

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 Fast & accurate customer service.

Balanced growth strategy.

High standard business ethics.

Steady return on shareholders' equity.

Innovative banking at a competitive price.

Deep commitment to the society and the growth of national economy.

Attract and retain quality human resource.

Principal objectives

Pubali Bank Ltd. main objective is to maximize profit through customer satisfaction. Pubali
Bank Limited has been ensuring maximum profit by providing best and improved customer
service along with other corporate objectives mentioned below.

o Profit maximization
o To provide standard financial services.
o To provide excellent customer services to its clients.
o Ensuring high return on investment and services with different service product.
Mainly done for the use of promote, disciplinary action and to control human
resources. Performance feedback is almost absent in PBL. No systematic culture has
yet been developed for performance feedback.
Organization Structure of PBL

Pubali Bank Ltd expanded as the largest commercial bank in the country. Its operational
networks cover almost every part of the country including the major cities, rural townships,
which are prospective business centers in Bangladesh. The bank was established primarily as
a private bank. After liberation it was nationalized and it remained as a nationalized bank a
long period. The bank was denationalized and went back to it private hands. But the bank
could not get rid of all the rules and norms of nationalized bank. The bank is run by an

45 | P a g e
excellent management team under the direct supervision of a competent board of directors.
The board of directors consists of total members headed by the Chairman, Mr. Hafiz Ahmed
Mazumder. The Managing Director (MD) heads management team. Under him a General
Manager (GM) heads each department of the bank. Mr. Helal Ahmed Chowdhury is the
present MD of PBL.

Business Growth

Pubali Bank limited has achieved constantly about 20% growth for the last 6 (six) years. Following
table summarizes the performance of the key financial indicators of the Bank.

(Taka in Crore)

Classified
Year Deposit Advance Import Export Profit Remittance NPL
Advances

2006 4,867.59 4,038.67 4,017.03 1,795.68 181.01 318.42 1,530.10 7.88

2007 5,799.68 5,054.91 4,834.54 1,990.75 294.20 259.49 2,400.00 5.13

2008 7,301.65 6,178.81 5,800.91 2,479.56 344.58 221.93 2,800.00 3.59

2009 8,846.64 7,420.33 6,049.38 2,473.96 383.94 219.00 3,525.00 2.96

2010 9,885.05 8,910.62 8,568.35 3,390.97 548.50 181.85 3,193.00 2.04

2011 12,380.59 10,632.96 9,857.90 4,751.59 548.02 214.60 3,400.00

The Management Hierarchy of Pubali Bank Limited:

Chairman

Board of Directors

Managing Director

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 General Manager

Deputy General Manager

Assistant General Manager

Senior Principal Officer

Principal Officer

Senior Officer

Officer

Junior Officer

Sub-staff
Figure (2.1): The management hierarchy of PBL

Divisional aspect of PBL:

There are total fourteen divisions in the Head Office of PBL. List of various divisions of PBL
is given below:
Board Division

Human Resources Division

Establishment Division

Credit Division

Credit Monitoring & Recovery Division

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 International Division

Central Accounts Division

Lease Financing Division

Consumer Loan Scheme Division

Information Technology Division

General Services & Development Division

Audit Division

Branch Operation Division

Law Division
Figure (2.2): Divisions hierarchy of PB

2.5 Standard Chartered Bank Bangladesh

About us

Country Chief Executive Officer: Jim McCabe

Local time: GMT +6 hours

Language: Bengali, English

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 Population: 164 million (July 2010 est.)

Currency name: Taka (BDT)

No. of branches: 26

No. of ATM: 97

No. of Financial Kiosk: 19

Established: 1905 (including ANZ Grindlays experience; Standard Chartered Bank

originally established its first branch in Chittagong in 1948)

We are the oldest and largest foreign bank in Bangladesh

Only bank that never closed its doors over 100 years of banking operation in the country

First international bank to extend credit lines to Bangladesh and open the first external
letter of credit (LC) in Bangladesh in 1972

Financial Institutions business is the largest contributor to USD Clearing in New York

A leading price player in treasury instruments and foreign currencies

Leader and pioneer in Retail Banking

Overview of Standard Chartered Bank

Standard Chartered Bank is a leading foreign bank in Bangladesh, which brings the
revolution in banking service industry through adaptation of modern technology and process
with a view to enhancing customer satisfaction. Having been established in the British
colonial period, the bank has positioned itself as a unique business serving the local
community with due professional and ethical fervor. It has been operating in Bangladesh for
more than 100 years. Now it has 18 branches in different significant places of the country and
intends to expand its presence all over the country.

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The bank excels in providing the most efficient, consistent and timely services through 600
offices in more than 51 countries of Asia, Africa, Middle East and European region
incorporated in the UK with its Headquarter as 1 Aldermanbury Square, London. At present,
it has managing assets worth of 49 billion and maintaining corresponding relationship with
over 600 banks in 157 countries. SCB specializes in personal, corporate, institutional and
personal finance and custodial service with having a staff of about 33,000 people.

Historical Background of Standard Chartered Bank:

Standard Chartered Bank has a history of more than 150 years. The name of the bank came
from the two original banks - the Standard Bank of British South Africa and the Chartered
Bank of India, Australia and China.
Of the two banks, the Chartered Bank was established in 1853 by a Royal Charter granted
by Queen Victoria of England. The key person behind the Chartered Bank was a Scot, James
Wilson who has started The Economist, which is still one of the world's pre-eminent
publications. He visualized the advantages of financing the growing trade links with the areas
in the East, where none of the other financial institutions were present at that time and
therefore the Chartered Bank opened two branches in 1858 in Chennai and Mumbai.
On the other hand, the Standard Bank was founded by another Scot, John Paterson in 1862.
He immigrated to the Cape Province in South Africa and became a successful merchant there.
Coming from the similar background, he also visualized the great opportunities through
linking between Europe and South Africa.
From the very beginning both the banks were keen to capitalize on the huge expansion of
trade between Europe, Asia and Africa and to reap the handsome profits to be made from
financing on that trade. Therefore, although they were separate entities, survived the First
World Ware and the Depression. But were directly affected by the wider conflict of the
Second World War in terms of loss of business and closure of branches and for that they
decided to merge in 1969. After the merger the new shares of the Standard and Chartered
Banking Group Limited were listed in the London Stock Exchange on January 30, 1970.
Although the two banks merged in 1969, but their operations were being executed from two
different headquarters, until on June 1980, the original building of the Chartered Bank was
demolished and a new headquarter of the Standard Chartered Bank was opened on March
20th, 1986. Right after the merger the bank embarked on a vigorous mission to expand its
business in Europe and the USA.

50 | P a g e
In the last thirty years, Standard Chartered Bank has experienced continuous growth, which
led to its becoming one of the top 100 listed banks in the world. In the year 1993 and 1994 it
was judged as the best bank in the Asia Pacific region for its excellent service and growth
rate as well.

Recent Achievements

First commodity derivatives in Bangladesh and cotton hedge for the Group for Square
Textiles

Joint lead arranger for countrys first 5 year Asset backed Securitization (ABS)

Record Call Account growth in RAJUK fund Ranked first among all collecting
banks

Enhancement of Microfinance: BRAC, BURO, Shakti

First country to go live with IFRS compliant IMEX

Retail Banking new asset product system e-Lending introduced

Rolled out RCMS on eBBS, first time in Group

Pioneer country in e-CDD rollout

Best Bank for Corporate Social Responsibility for 2006 by Bankers Forum

Best Retail Bank in Bangladesh award in The Asian Banker Excellence in Retail
Financial Services programme for its performance in 2007

National Best Corporate Award 2007 by Institute of Cost Management Accountants

"Best IT Use Award 2007" by Bangladesh Association of Software & Information

Services (BASIS)

Best Employer of IBA Graduates in 2008 by IBA Alumni Association

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 Best Foreign Commercial Bank in Bangladesh" by FianaceAsia in 2013, 2012, 2011,
2010 & 2009

Bank of the Year award by The Banker in 2013, 2012 & 2010

Best Consumer Internet Bank at the Global Finance Awards in 2013

Points of interest

Flagship country for the Seeing is Believing initiative where we built an Operation
Theatre and Childrens Ward at Islamia Eye Hospital to provide cataract surgery to at
least 12,000 patients per annum

We jointly initiated the 'Standard Chartered-Financial Express Corporate Social

Responsibility Award' in 2006

Leading bank in community activities (please refer to CSR Activities below for details

Our ambition

The worlds best international bank

Our brand promise Here for good
Our strategy

We bank the people and companies driving

investment, trade and the creation of wealth across
Asia, Africa and the Middle East

Our aspirations

Build trusted relationships with the people,

companies and institutions shaping our
markets future

52 | P a g e
 Investment
Play a leading role in facilitating investment
and deepening financial markets
Trade
Become the undisputed leader in
commercial payments and financing
for and in Asia, Africa and the Middle East
Wealth
Be recognised as a leader in growing and
protecting our clients wealth
Relevant scale
Establish sufficient scale and balance sheet
and franchise strength to be relevant and
influential in our key markets
Our values

Courageous
We take measured risks and stand up for
what is right
Responsive
We deliver relevant, timely solutions for
clients and customers
International
We value diversity and collaborate
across the network
Creative
We innovate and adapt, continuously
improving the way we work
Trustworthy
We are reliable, open and honest

53 | P a g e
Our commitments

Colleagues
A great place to work, enabling individuals
to grow and teams to win
Society
A force for good, promoting sustainable
economic and social development
Investors
A distinctive investment, delivering
consistently superior performance
via disciplined growth
Regulators
A responsible partner with exemplary
governance and ethics

Our activities

54 | P a g e
World wide Operational Activities of SCB:

Standard Chartered Bank has its wide range of network all over the world.

Asia Bangladesh, India, China, Taiwan, Pakistan, Nepal, Sri Lanka,

Japan, Hong Kong, Singapore, Korea, Malaysia, Vietnam,
Indonesia, Thailand.

Europe France, Germany, Cyprus, United Kingdom, Poland.

Africa Nigeria, Zambia, Tanzania, Ghana, Zimbabwe, Morocco, Tunisia,

Mauritius, Seychelles, Ethiopia, Ivory Coast, Kenya, Uganda,
Botswana, Malawi, Mozambique, Gambia.

Middle East Dubai, Oman, Jordan, UAE, Qatar, Kuwait, Saudi Arabia, Egypt,
Bahrain

Australia Australian Capital, New South Wales, South Australia, Melbourne,

Queens Land Western Australia

Latin America Brazil, Chile, Colombia, Mexico, Argentina.

The global strategies of Standard Chartered Bank:

55 | P a g e
At the global level, Standard Chartered Bank operates with some unique strategies such as

To build and grow strong businesses in East and South East Asia- the Asia Pacific
Region.
To enhance historical position in the Middle East and South Asia region.
Provides support in newly industrialized and emerging markets.
Capitalize on the good track record in these regions by building unique position and
image among the target customer segment and being responsive to the needs and
serve better than the competitors.
To concentrate operations in the activities that have direct impact on the communities
of the countries; help the country and its economy and at the same time earn profit in
an ethical way.

Business Activities of the Global Standard Chartered Bank:

Standard Chartered Bank operates in every Asia Pacific market with the exception of North
Korea and some 60 percent of the Groups profits come from the Asia Pacific region.

Hong Kong continues to be major importance to the group and contributes 30 percent of the
total profit with around 80 branches in Hong Kong and strong representation in China,
Standard Chartered- a note issuing bank in Hong Kong is well placed to continue playing an
important part in Greater Chinas development. A resident Group Executive Director manages
the Groups business there.
Consumer banking, Corporate and Institutional Banking are managed out of Singapore each
by a Group Executive Director resident in the island state. Other East Asian countries of note
for the Group Malaysia, Taiwan and Thailand where, in 1999, the acquired 75 percent interest
and management control in Nakornthon.

Standard Chartered is the leading international bank in Sub-Saharan Africa, operating several
countries, the most prominent being Kenya, Zambia, Zimbabwe and Ghana. The Groups
operations in the Gulf and south Asia are managed from Dubai.

Standard Chartered Bank provides a full range of products and services to its customers all
around the world, some of which are mentioned below:

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 Consumer Banking
Personal Banking
Global Corporate Banking and Institutional Banking
Global Custodial Service
International Trade Management
Global Cash Management
Global Institutional Banking
Global Treasury
Global Electronic Banking

Key Operation Areas of Global SCB:

Standard Chartered as a bank operates globally with key business objectives and specific
business areas to specialize in. Some major areas where SCB specializes as a bank are stated
below:

Consumer Banking:
Standard Chartered Banks consumer banking has near around 5 million customers
worldwide. In recent years, this retailing banking has grown large and significant
growth in South Asia and Middle East countries. Around 50%of the total profit is
contributed by consumer banking division of SCB. Major initiatives support the rapid
development of the credit card business in the exiting markets of India, Indonesia and
Taiwan. There are 76 branches and finance centers under this division in about 10
countries with a workforce of 1615 employees.
Personal Banking:
There are 410 offices or branches with a workforce of 12000 employees working
under this division in 28 countries. Some of the services provided by this division are
various kinds of insurance and loans, various types of accounts, travelers cheque and
card money.
Corporate and Institutional Banking:
The principal strength of this division is in supporting regional and international
cross- boarder trade and investments. Product and services are focused primarily on
these areas, specially trade banking, cash management and custody. Institutional
banking deals with the groups relationship with the banks, investment companies and
other financial institutions. It intends to be the Bankers bank operating in customers
time zone and providing network linkages between international market. This
business has continued to expand rapidly in Asia, Africa, Middle East and Latin
America.

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Institutional Banking Group:
The IBG of Standard Chartered Bank offers a wide variety of products and services to
banks and financial institutions. It has global links with leading banking institutions
and agency arrangements through its network of offices in 40 countries. The Bank
offers a full range of clearing, payment collection and import-export handling
services. The bank offers foreign missions, voluntary organizations, consultants,
airlines, shipping lines, and their personnel the following financial services:
Current accounts in both Taka and other major foreign currencies

Convertible Taka accounts (these funds are freely convertible to major

international currencies)
International Trade Management:
This division operates throughout the group and is one of the core operational strength
of Standard Chartered bank. Over the 150 years experiences it has depth expertise in
export and import finance, Letter of Credit, Performance Guarantees, Back-to-Back
L/C, Export Bill Collection and issuance of Bonds and Promissory notes.
Global Custodial Services:
There are 17 offices and about 900 staffs are under this division. It operates in 14
countries and is headquartered in Singapore. SCB group fulfills its strategic
commitment in providing custody and clearing services in greater Asia. Standard
Chartered Bank is the number one custodian in Asia for over 40 years.

Corporate Social Responsibility at Standard Chartered Bank, Bangladesh

In addition to its business activities, Standard Chartered Bangladesh benefits the country
through its wide range of sustainability and community investment programs. The Bank is the
forerunner in CSR and Sustainability initiatives in Bangladesh. The major areas of focus for
the Banks sustainability and community initiatives in Bangladesh are Health, Sports,
Education, Arts and Culture, Environment and Climate Change. We continuously carry on
various meaningful activities that help the community. We always strive to be a force for
good in Bangladesh.

Under our Seeing is Believing Project, Standard Chartered helps restore eyesight of the
underprivileged. Seeing is Believing, the Standard Chartered Groups largest CSR initiative,
was born here in the hands of Standard Chartered Bangladesh, and continues to restore
millions of eyesight every year. Standard Chartered Bangladesh has built an Operation

58 | P a g e
Theatre and childrens Ward at Ispahani Islamia Eye Institute & Hospital and provides for its
maintenance since 2003. We funded free cataract operations for the underprivileged in
Chittagong & Sylhet. Standard Chartered Bank, recently signed an agreement with Ispahani
Islamia Eye Institute and Hospital for basic cataract operation for the underprivileged patients
as a part of 10th Anniversary of Seeing is Believing. Under this MoU, Standard Chartered
Bank credit card holders would be able to donate their 360 degree rewards points for basic
cataract surgeries with regular lens to underprivileged patients at Ispahani Islamia Eye
Institute & Hospital.

Through the Living with HIV programme, Standard Chartered helps educate not only our
staff but the youth in our communities about HIV/AIDS and its prevention. Under this project
we have organized Living with HIV seminars for our clients in the RMG Sector. In 2013 the
bank has developed an infomercial on HIV/AIDS starring Partha Pratim Majumder, world
renowned Bangladeshi Mime artist, to raise awareness about this important issue.

Womens empowerment is central to the values of Standard Chartered Bank and critical to
economic development. Women represent a large customer and talent segment for the
business and will drive economic growth in Bangladesh in the future. With this in mind,
Standard Chartered Bank, Bangladesh have partnered with BRAC and Women Win to launch
Goal in Bangladesh. Goal is a unique community program that aims to empower young
women for personal and economic development using sport and education as vehicles for
change.

Recently, the bank commissioned a study to assess the social and economic impact of
Standard Chartered in Bangladesh. This study was done by Professor Ethan Kapstein from
INSEAD. The report assesses the direct, indirect and induced impact of Standard Chartered
on Bangladesh and how it positively impacts countrys GDP, employment, trade, various
business sectors and the community at large. The Bank has also focused its efforts in the
areas of history, culture and art, seeking to make a difference and surface little known events
and artwork. Recent works have included publications of books Coins from Bangladesh a
special compilation of the history of coins found in this region from Ancient period, medieval
period, and Colonial to Modern period. Weve also published English version of Bandhon
Hara by the National Poet of Bangladesh Kazi Nazrul Islam.

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Standard Chartered - The Daily Star Celebrating Life Contest is a platform for new talents
across the country to pursue their artistic and career goals in Film, Photography & Lyrics.
The Bank has been sponsoring this for the last 6 years. Apart from the gala annual award
giving ceremony, concerts and exhibitions (of photos and films) organised at several districts
drew huge crowds. In 2013, an intensive Film-Making Workshop was organised where 3
leading directors taught participants for 4 months, and helped the students direct their own
short films.

Standard Chartered encourages development of youth through education scholarships and

sports sponsorships. Our efforts include sponsorship of Young Learners Club of The British
Council; Governor Scholarship in partnership with Dhaka University Economics
Department Alumni Association (DUEDAA) & Dhaka University Department of
Development Studies (DUDS). The bank donated to Utsho Bangladesh, Autism Welfare
Foundation as well. The bank also built a classroom in Jaago school for the under privileged
students.

The Bank also encourages all corporate bodies in Bangladesh to uphold high standards of
social responsibility. We recognize exemplary work in the field of CSR through Standard
Chartered - Financial Express Corporate Social Responsibility Award. Standard Chartered
also partnered with The British Council for 'Climate4Classrooms' and 3000miles to go
campaigns to raise nationwide awareness on climate change issues, mostly amongst school
children and teachers.

Standard Chartered has always stood by the people of this community. During the cold wave
that shook the whole country in 2013, the bank handed over warm blankets to Bangladesh
Bank for distribution among the poor and cold-affected people in different parts of the
country. Employees from all departments volunteered nearly 1,000 days in 2013 (every
employee is entitled to volunteer 3 days with full pay for the community) at different events
including World Sight Day & World Environment Day.

With a presence in Bangladesh that spans over 100 years, Standard Chartered is proud to be
the oldest bank in the country; and an integral partner in progress for the nation and its
people. At Standard Chartered, we are committed to be here for people, here for progress,
here for the long run - Here for good.

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Chapter: 3 Literature Review Page No.

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 LITERATURE REVIEW

Home Loan in Bangladesh & Customer Satisfaction

3.1 Home Loan in Bangladesh

Housing development of Bangladesh

The Housing of construction industry in the Gross Domestic Product (GDP) is significant.
Over the last 15 year the Housing Development sector has made significant contributions to
many sectors of our economy. Since 1985 this sector has created homes for over 12000
families in the metropolitan city. Additionally, thousands of acres of land have been
developed into housing estates where lower middle and middle-income families can construct
their own dwellings. The fact that many cement manufacturing industries have now been set
up in Bangladesh is a reflection of the impetus the Housing Development sector has given to
our economy. In the last decade many steel mills would have shut down had it not been due
to the support of the Housing Development sector. Several new mechanized construction
material manufacturing industries have recently come up due to the existence of this sector.
Today about 200 architects and consulting engineers are directly supported by this sector;
over 500 graduate engineers are holding management positions in this sector and almost 2500
diploma engineers are engaged by this sector. The construction sector is directly linked with
employment. There are both formal and informal building firms, who undertake works. In the
period 1985-90, this sector contributed more than 5.55% in GDP. It is estimated that about
1.77 million man/ year in 1994/95 (according to Fourth Five year plan) were engaged in this
sector. A large number of companies/firms in Dhaka are engaged in construction activities
Contribution of construction industry may be summarized as:

Construction industry generates huge formal and informal sector employment. This
fact needs to be remembered more generally while policy making.

Income redistribution through employment generation, skill upgrading, favorable

financing for low-income housing, capital spending for large-scale civil engineering

63 | P a g e
 works, all contribute to redistribution of national products downwards (social justice
component).

On-the-job skill acquisition frequently leads to further specialization, both in the

construction sector and in serving other industrial sectors. Skill generation is thus
possible by construction industry.

The low-income population, after the provision of shelter and civil infrastructure, feel
morally upgraded (direct contribution to labor productivity). It has also been observed
that improved dwellings are frequently transformed into some sort of informal
economic production units. Improved road systems make commodity outputs of small
units more easily accessible. Construction industry thus contributes to higher
productivity.

The construction sector directly relates to employment, power and transport sectors. The
construction industry is a very labor intensive, providing many jobs for skilled, semi-skilled
and unskilled workers both in the formal and informal sectors. The informal sector also
employs many people in construction industry. For the migrants from the rural areas the
construction industry is a stepping stone to urban life.

It is a recognized fact that the health of the Housing Development sector is the barometer of
the national economy. Housing is indeed one of the most important priorities of any
government. It is very unfortunate that today the Housing sector of Bangladesh is in the
doldrums. Many Housing projects are left incomplete; many people who have invested their
money face uncertain future; and many related industries will face the consequence of this
depression in the immediate future. It is our view that a part of the reason behind this pathetic
scenario is the misunderstanding of this sector by the successive governments. Instead of
receiving encouragement and nurturing, this sector has been progressively quashed by
regressive government policies. A few examples are listed hereunder: In 1989 the Ministry of
Industries declared construction of residential complexes on commercial basis as an industry.
However, to-date this notification from the Ministry of Industries is not recognized by the
National Board of Revenue. Therefore, this sector is not entitled to any benefit of an industry.
Transfer fees stamp duty and registration charges for property in Bangladesh are amongst the
highest in the world. In the metropolitan city, a purchaser has to pay approximately 25% of
the total value of the property to the government exchequer under different heads for

64 | P a g e
registering the apartment. House Building Finance Corporation is the only government
institution dedicated to the financing of homes. Over the last 15 years this institution has been
constantly cash starved and has made negligible contribution to the financing of this sector. In
Bangladesh there is virtually no financing facility for this sector and almost all procurements
are made with 100% equity. Recently some private institutions have entered the housing
financing business but the cost of borrowing from these institutions is prohibitive.

Housing policies of Bangladesh

The policy of the Government has some impact on the developing of housing cooperatives and
building of house. Policy affects the housing cooperatives in two ways. First, the registration charge
for transfer of land has to be borne by housing cooperative; this is required for the housing
cooperatives when they buy land from private parties for the housing site and subsequently when
titles of plots are transferred to their members. Secondly, personal income tax on rental income affects
to decision of cooperative members to build houses for rental income. Because, members will
consider whether their rental income net of tax would be adequate on the investment in house
building. The rental income from houses would be considered adequate by members if their
investment in houses building cannot earn higher retune in other investments. In other works,
members will be reluctant to build more houses for rental income if the opportunity cost their
investment higher than the rental income. If the house building investment is financed by loans, rental
income must be sufficient to service interest expense. Other than the opportunity cost of capital,
soaring cost of building materials may also influences to build their house. Members joining in the
housing cooperatives and their building of house are partially dependent on the potential source of
external financing. If a persons own fund is not sufficient to buy a plot and build a house, they have
to depend on external funds. They may seek personal loans from relatives and friends. But a person
can hardly depend on this type of loans. Rather a person can be member of a housing cooperative in
expectation of institutional loans. In developed countries, institutional loans are available both for
land and building. In Bangladesh, loans are available for housing building but generally not for their
land. House building loans are available from Bangladesh House Building Finance Corporation
(HBFC) and a few commercial banks. These loans are provided subject to a margin and have an upper
limit; HBFCs loans are generally cheaper than other commercial loans. In many cases from HBFC. In
a very few cases, employers provide loans to their employees for both land and building. Necessary
infrastructure is a precondition for developing housing cooperatives. First, there must be adequate and
cheap land for a housing site within or nearby the city. Second, there must be road connections,
people will be reluctant to make housing site in the area. Third, utility services must reach or be

65 | P a g e
expected to reach the cooperatives housing site. In the absence of utility services like electricity and
gas, people will not be building their house in the site, even if they purchase a plot there.

Housing schemes in Bangladesh

Housing loan scheme

Construction of buildings is not progressing as expected because of scarcity of housing loans. Many
people can purchase flat or construct hose if they are facilitated with the sanction of institutional loan.
With a view to creating financial capability of the prospective clients in purchasing flats/ hoses and in
constructing houses and with the objective of exploring a profitable investment area Financial
institutions scheme has been introduced. The purposes of this scheme are:

Advances

The prime asset of any financial institution consists of its loans and advances and other investments.
These assets are created primarily out of funds received from the depositors, loans and some other
liabilities. The depositors as well as the investors in the institution are interested in real /realizable
value of the assets of the institutions. The creditors are interested, as they want to know the depth of
risk on their deposits, while the equity holders desire to be acquainted with viability of their source of
income. The management of the institution as well as their supervising authority i.e. the Central Bank,
evaluate the assets of the institution keeping in view the aforesaid aspects. This evaluation at
stipulated intervals is called Classification of Advances. It is in fact, placing all loans and advances
under pre-determined different heads/ classes based on the depth of risk each and every loan has been
exposed to and to bring discipline in financial sector so far risk elements concerned in credit portfolio
of banks.

Classification of advances

At present loans and advances are classified under three heads according to degree of risk element
involved these are-

1. Sub-standard

2. Doubtful

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 3. Bad

Substandard:

A loan value of which is impaired by evidence that the borrower is unable to repay but where there is
a reasonable prospect that the loans condition can be improved is considered as substandard.

Doubtful:

A loan is doubtful when its value is impaired by evidence that it is unlikely to be repaid in full but that
special collection efforts might eventually result in partial recovery.

Bad:

A loan is considered as bad when it is very unlikely that the loan can be recovered. Good loans are
classified as un-classified loans. Naturally depth of risk is more in doubtful or bad loans than
unclassified ones.

3.1.4 Housing situations in Dhaka city

Housing is an enormous problem for Dhaka city. Only 15% of the 9 million inhabitants of the
city own their house, 18% live in flats provided by the employer, 34% in rented
accommodations, 18% in slumps and 20% is floating. About 90% of the dwelling of the city
is privately owned. Dhaka is the hub of all sorts of activities and therefore the pressure of
human inflow into Dhaka and consequently on housing is ever increasing. The density of
population in Dhaka city is about 15000 people per square mile with substandard facilities
and by the year 2025 population per sq. mile will be nearly 32000. In that case the city of
Dhaka will be in great distress if proper care is absent. Already in 1995 most of the areas in
Dhaka city didnt have enough supply of water, gas and electricity. Price of land in this city
has increased nearly 200 times on an average since 1974. A 1982 survey showed that about
70% of Dhaka city people were lower-middle to lower class but only about 20% of the land
was in their possession. Remaining 80% was in the possession of the affluent class people.
Due to rapid rise in land price most of the land will remain beyond the purchasing power of
the middle and lower class people for all time to come. Annual demand for additional housing
units in Dhaka is 100,000 whereas the total new units built (both in the public and the private
sector) annually is between 15000- 20000 and there is a clear gap of about 80000 units which
is alarming.

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Dhaka is surrounded by swamps of between 10-15 feet depth and it is highly expensive to
construct buildings through filling this low lands. The cost of filling of one bigha of low land
is between taka 1.2 1.5 million. Residential plots within Dhaka city cost between taka 20-30
million per bigha. On the other hand the cost of residential flats ranges between 1500- 2000
taka per square feet. Thus about 60% of the city people are unable to buy either a flat or a
piece of land.

The institutional framework for providing housing finance

The decision to buy or renovate a home is probably the most important investment decision we will
ever make. So some of the organizations put together a loan facility to assist us in purchasing new
apartment or to help us during renovation of their house. Right this moment there are several
organizations operates there business in housing finance industry. There are some organizations that
are specially provide this service and they are the expertise in this sector like IDLC and IBBL.
Besides these there are also some banks involve in this sector and they provide loan facility both the
individual and developers. They provides loan to the developer as a project basis and its called project
financing where the amount of loan is a chunk amount. There are also some financial institutions who
are also operates there business in this sector like PBL, Pubali Bank and Standard Chartered Bank ,
though these two companies are not expert in this sector but they have several program to provide this
facility to the general people to be a owner of apartment or house.

Industrial Development Leasing Corporation (IDLC):

Industrial Development Leasing Corporation (IDLC) is the giant force in private sector housing
finance. Although it basically provides leasing and merchant bank activities in recent years it carries a
great success in providing housing loan. This is a joint venture owned by investors of local and
foreign and also by some specialized institutions. The prime objective of the company is to provide a
helping hand in developing industrialization. In recent years it started house loan and small-scale
short-term loan. The key factors about the company are as follows:

1. A joint venture and owned by the investors of five different countries.

2. The authorized and paid up capital of the company is Tk.1000 million and Tk. 150 million
respectively.

3. A client can apply for Tk.50 lac or 70% of the price of flat/cost of construction whichever is
lower.

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 4. The current rate of interest for house loan is 13.75%.

5. The maximum loan period is the lower of the 20 years or the 65 th birthday of the borrower.

6. It has also different types of attractive term deposit scheme to accumulate savings from
surplus household and firms.

7. Provide Insurance facilities against loan and they mentioned it by the name of Home Loan
Shield.

8.

Islami Bank Ltd (IBBL)

Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in commercial
banking business based on Islamic Shari'ah with 63.09% foreign shareholding having largest branch
network ( total 286 Branches) among the private sector Banks in Bangladesh. It was established on
the 13th March 1983 as the first Islamic Bank in the South East Asia.

To increase standard of living and quality of life of the fixed income group by extending them
investment facilities to purchase household articles. The key factors about the company are as
follows:

Target Group : Permanent Officials of Govt. / Semi-Govt. / Autonomous Body /

Corporations / Banks & FIs / Defense Forces / Madrasah / School / College /
University Teachers / Businessmen / House owners of Metropolitan & other District
Head Quarters / Professionals (Doctors / Engineers / Lawyers etc.) / Existing clients /
Wage Earners / University / Medical Students / Officials of renowned Private Firms.

Application Form shall have to be collected from nearest Branch of Islami Bank
Bangladesh Ltd.

Nature of Goods : Items Electronics & electrical goods, Motor cycle / Bi-cycle,
Furniture / Fixtures, Ornaments, Instruments / Equipments for Medical & Engineering
students etc.

Amount of Investment: For All Metropolitan Cities Tk.0.30 million For Districts &
Municipalities Tk.0.20 million Others Tk.0.10 million

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 They charges variable interest rate of 11.50%

They always go for registered mortgage (new edition).

They have grace policy but did not provide the duration.

They have rebate @ 3% of interest.

Loan period is 1-20 years.

Loan ceiling is at best 50% of total cot.

Prime Bank Ltd. (PBL)

In the backdrop of economic liberalization and financial sector reforms, a group of highly successful
local entrepreneurs conceived an idea of floating a commercial bank with different outlook. For them,
it was competence, excellence and consistent delivery of reliable service with superior value products.
Accordingly, Prime Bank was created and commencement of business started on 17th April 1995. The
sponsors are reputed personalities in the field of trade and commerce and their stake ranges from
shipping to textile and finance to energy etc.

Thinking of giving a new look of your sweet home? Swapnashaj will enable you to extension or
renovation of your home/flat. You can avail the loan with competitive rates, most convenient features
and easily-avail procedures.

Key Features

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 Internal and/or external renovation of
house/apartment

Loan amount maximum 40 lac

Income of spouse, parents and siblings if any are considered

Competitive interest rates on a monthly/quarterly reducing balance

Loan tenure -maximum 10 years

Maximum 03 months grace period

Age: At least 25 years

Convenient partial or early settlement

Professional Experience:

- Salaried: Permanently employed at least for 02 years

- Self employed: Professional experience or business establishment for at least 2 years

Minimum Monthly Income:

- Salaried & Self Employed : BDT 30,000

Criteria to be eligible

Security

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 Mortgage and original title deed

Irrevocable General Power of Attorney (IGPA)

Property insurance covering fire, earthquake, flood & cyclone

Pubali Bank Ltd.

Pubali Bank Limited is the largest Commercial Bank in the Private Sector in Bangladesh. It provides
mass banking services to the customers through its branch network all over the country. This Bank has
been playing a vital role in socio-economic, industrial and agricultural development as well as in the
overall economic development of the country since its inception through savings mobilization and
investment of funds. During the last 5 years the growth rate of bank's earnings is more than 25% on
average.

Home Loan

General Information

This product will allow flat financing to the customer segment in terms of banks policy. Under this
scheme, the flat is registered to the bank only. In addition to this registration requirement, on a case to
case basis, banks may also wish to secure the loan partially by the commonly acceptable form of
cash/quasi cash securities available in the market.

Customer Segment

Any Bangladeshi individual and non-residential Bangladesh (NRB) who has the means and capacity
to repay bank loan. In specific terms, these could be salaried executives of multinational and middle
to large size local corporate, Government officials, Officials working in reputed NGOs (Non
Government Organisations), international aid agencies & UN bodies, any tax paying businessmen of
repute, any employed / self-employed tax-paying individual having a reliable source of income.

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Purpose

To purchase a flat for residential purpose in a

residential/ commercial area having all amenities/
facilities like water, electricity etc.

Loan Size

50% of the flat value, maximum 25 Lac (which is

lower).

Installment Size per Lac

8 years term 10 years term 12 years term 15 years term

Tk.1,874/- Tk.1,683/- Tk.1,564/- Tk.1,457/-

Loan to Price Ratio

Loan amount can not exceed 50% of the flat price.

Security/ Collateral

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 Registered mortgage of the flat.

Personal guarantee of a respectable man acceptable to the bank.

Post dated cheques for each monthly installment

One undated cheque for full loan value including full interest to be taken in advance.

Legal Documents

Demand Promissory Note (Joint and single)

Upto date non-encumbrance certificate,

Memorandum of deposit of title deed, Registered Mortgage,

Registered Power of Attorney, Approved plan with authority letter from competent authority.

Clearance certificate from developer/seller regarding payment of all dues for handover of possession and
other supporting papers and documents. 4 (four) party agreement to be executed.

Interest Rate

Bank Interest 14%

Agent Commission 1%
Penal Interest

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 Penal interest shall be charged @ 2% over the normal
rate on the defaulted installments.

Maximum Term of Loan

8 Years, 10 Years, 12 Years & 15 Years

Repayment Method

Equal Monthly Installment.

Disbursement Mode

Disbursement will be made through Demand Draft/ Payment Order directly to the seller/ developer.

Debt Burden Ratio (DBR%)

50% of Net Income

Disbursement pre-condition

Comprehensive Insurance coverage, registered mortgage of the flat, registered power of attorney must
be in place before giving the Demand Draft /Pay Order.

Substantiation of Income

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Proper substantiation of income will be mandatory.

All or any of the following original / true copy of original (accepted only after seeing the originals)
documents are accepted for the purpose:

Last Tax Return

Bank Statements for minimum last 6 months

Personal Net-Worth Statement

Any other document that may stand as a proof of income

Developer/ Seller

Must be well reputed and member of REHAB

Standard Chartered Bank

Standard Chartered Bank is a leading foreign bank in Bangladesh, which brings the
revolution in banking service industry through adaptation of modern technology and process
with a view to enhancing customer satisfaction. Having been established in the British
colonial period, the bank has positioned itself as a unique business serving the local
community with due professional and ethical fervor. It has been operating in Bangladesh for
more than 100 years. Now it has 18 branches in different significant places of the country and
intends to expand its presence all over the country.

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 Home Loan

Its good when your bank takes you a step closer to your dream

Everyone dreams of owning a home. To make that dream a reality, Standard Chartered brings
you a Home Loan with exclusive benefits! For either buying a new apartment or transferring
your existing Loan with any other Bank/Financial Institution to Standard Chartered at a very
attractive rate; its all possible with Standard Chartered Home Loan.

Features

Maximum loan amount up to BDT 1 Crore

Attractive & absolutely transparent variable rates without any hidden charges

Quick approval process

No prior account relationship required with Standard Chartered

Loan repayment in up to 300 instalments

Zero Processing Fee for Take-over Loans

Financing available for up to 70% of property value

Options available for early & partial settlement

Eligibility

Salaried professionals, businesspersons & self-employed individuals with at least 3 years of

experience

Applicant or applicants must have a minimum aggregate monthly income of BDT 25,000

Loan Applicant must be at least 25 years of age

Variable Interest Rate

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Variable interest rate is a type of pricing where the interest rate is revised at pre-determined
intervals based on movement of a market benchmark till the end of the loan tenor. During
disbursement, your Home Loan interest rate is linked to the average rate of 182-Day Treasury
bill. Your Home Loan interest rate will be reviewed (i.e. decreased or increased) after every
6-month from the date of disbursement based on the movement of the average rate of 182-
Day Treasury bill.

Insurance

Our Home Loan comes with a very attractive credit-life insurance bundle scheme called
Mortgage Reducing Term Assurance (MRTA). The insurance coverage is provided by one
of the best life insurance companies around. Moreover, we can finance the insurance
premium along with your Home Loan. MRTA insures your Home Loan against your death or
permanent total disability; relieving you and your family of the burden of the loan in the
event of any such unforeseen circumstances. Your dream home will be there for your family,
forever!

Management of Housing Loans

Md. Yeasin Ali

Chairman, Board of Directors
Bangladesh House Building Finance Corporation
Head Office, Dhaka.

Dr. Md. Nurul Alam Talukder

Director, Board of Directors &
Managing Director
Bangladesh House Building Finance Corporation
Head Office, Dhaka.

Md. Zillar Rahman

Director, Board of Directors
Bangladesh House Building Finance Corporation
Additionl Secretary (Administration)
Ministry of Health & Family Welfare
Bangladesh Secretariat, Dhaka.

Sudhangshu Shekhar Biswas

Additional Secretary
Ministry of Finance
Director, Board of Directors

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Bangladesh House Building Finance Corporation
Head Office, Dhaka.

Nazmul Hai
Director, Board of Directors
Bangladesh House Building Finance Corporation
Member(Administration & Land)
Head Office, Dhaka.

Md. Jalal Uddin

Director, Board of Directors
Bangladesh House Building Finance Corporation
Joint Secretary (State-own Institution)
Bangladesh Secretariat, Dhaka.

Policy Framework for Housing Loans

National Housing Finance & Investments Ltd. is another well-equipped private housing finance player
trying to capture the market niche of the sector. The company is incorporated under the company act
1994 and Financial Institution Act 1993 of Bangladesh Bank and commenced on 29 th December 1998.
Local banks, insurance companies, and expatriate association of two countries own the company. The
company basically provides house loan but also provides mortgaged project loan. The key factors
about the company are as follows:

1. A public limited company owned by different banks and insurance companies.

2. The authorized and paid up capital of the company is Tk. 2000 million and Tk. 400 million
respectively.

3. The company offers Home Mortgage Loan up to a maximum amount of Tk.50 lac or 70% of
the purchase price or construction cost whichever is lower.

4. Home Mortgage loan of NHL is available for purchase of houses or apartments, renovation,
extensions or addition of existing houses or apartments purchase of housing plots.

5. The current interest rate charged by National Housing is 14.50%

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 6. The maximum repayment term is 20 years, but not extending beyond the borrowers 65
birthday.

7. NHL has deposit schemes to accumulate deposits from different saving units. These include
National Hosing Priority Account (NHPA), National Housing Bonds, National Housing Fixed
Deposit Accounts, and National Housing Income Accounts.

8. The company usually provides house loans through registered mortgage in order to
minimize its risk.

Effectiveness of Housing Loan

The Housing Finance Group of the IFC has identified numerous challenges that must be overcome if
the housing finance sector is to fulfill its objective of increasing the availability and affordability of
residential housing in developing countries. In the following section, we address the above issues one
by one in more detail.

1. If the housing problems are to be addressed more effectively, housing policies, and
especially financing issues, must be taken into consideration. Stronger, more effective
enabling strategies must be developed by the public sector to allow housing markets
for the various tiers to leverage the activities of the private sector.

2. The objectives of the subsidy scheme should be to assist those who do not qualify for a
formal sector mortgage loan, thereby increasing the number of middle-income households
that can avail themselves of housing finance. However, we need to keep in mind that
subsidised funding for state-owned housing finance entities creates distortions in the market
and it should be stopped. Fortunately, for the last few years, BHBFC could not avail itself of
any subsidised funding through the government or government guaranteed debt.

3. Real estate loan recovery rate in the public sector is very low and well below that of the
commercial banks. In the past a rural house lending programme, sponsored by the
government through a 3% refinancing window at the Bangladesh Bank, was stopped because
of alleged poor recovery rates. Over the years, major problems in loan recovery began to
plague the housing portfolios and the banks gradually decreased the proportion of advances
for housing.

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4. In order to develop a primary mortgage market, financial assistance to different market
players (eg banks extending housing loans, specialised housing finance originators) through
equity participation, loans, credit lines and warehouse lines is needed.

5. National housing finance systems have failed to prove themselves competitive in mobilising
and allocating capital efficiently. BHBFC has made only very limited progress in becoming
self-sustained or in reaching lower-income households.

6. Age-old Insurance and Trust Acts are not facilitating lending by long-term investors in the
housing sector. Sometimes developers are accused of not properly following the procedures
for borrowing money from financial organisations. The involvement of all three parties (the
developer, the landowner from whom the land was leased, and the apartment buyer) in the
process makes the borrowing cumbersome.

7. However, it is evident that, over the last two government periods, most of the government-
built houses were for the upper-grade government employees and political leaders, rather than
lower-income government employees or poor people in general.

8. There are no incentives to promote the primary mortgage market and to establish a secondary
mortgage market to provide alternative funding mechanisms to the primary lenders.

Rate of interest

For Dhaka & Chittagong Metropolitan area: 12% per annum

Other divisional, district & Upazila head quarters: 10% per annum
Places for Collection & submission of loan application form:
Loan application forms may be collected and submitted to the respective Zonal and
Regional offices.

Mode of repayment

1 Advance basis (installment will start from the date of disbursement) and by means of
post dated cheques.
2 Submission of 36 post dated installment cheques (crossed A/C payee in favor of
Bangladesh House Building Finance Corporation) and a residual cheque before
disbursement.
3 Replenishment of 24 post dated installment cheques when the first 36 cheques are
exhausted
Loan agreement

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 Every sane/normal citizen of Bangladesh to be considered for availing loan. Several members
of a single family will not be considered for loan(Family means husband, wife & the
descendants). Only a member of a single family will apply for the loan. If any loan from
corporation had been taken before then until the complete of the first loan one can not apply
for another loan. Only one loan will be provided in the name of husband & wife singly or
jointly. For join loan, it will be ok if any one of them is the earning member. Generally there
is no provision for providing loan in the name of under aged children but the loan can be
given if there is a guarantor for the under aged children & the guarantor will sign for the
under aged. In this case, no loan will be given to the guarantor of the under aged.

7.0 The people who have houses in the same town where they are living will not be
considered for loan. But for the extension part of the proposed mortgage land under plan (if
there) will be given loan (vertically or horizontally construction). Note to be taken when loan
is sanctioned for the 90% rents of the constructed building as payment table income for the
proposed loan.

Product attributes

There are seven kinds of Housing Loans are being disbursed.

General Loan: It will be availed by single person or spouse.

Group Loan: Flat wise loan for a single plot of Multi owner will be availed.
Flat/Apartment Loan: Flat/apartment loan which are half completed/ under
constructed will be availed
Extension Loan: This kind of loan will be disbursed to complete extensive part of a
constructed building under approved design.
Loan for Middle and Lower-Middle income group of people: The sort of loan is
provided to build flat of 550 to 1000 square feet.
Semi-Pacca Loan : Except Metropolitan Areas and District Towns, this kind of loan is
provided to build semi-pacca houses in Upazila and Growth Centre/ Commercial area
Short tern Special Loan: This kind of loan is provided to build the ending or
incomplete part of constructions.

Time needed to process the loan

You can apply for Home Loan at any time after you have decided to buy/construct/extend a
House/Flat/Housing Plot, even if the property has not been selected or the construction has not been
started.

Application Process:

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Please complete the prescribed Application Form and submit it along with supporting documents. On
receipt of the completed Application Form along with the processing fees will process your
application, make such enquiries as it deems necessary and convey its decision to you at the earliest.

Monitoring system of Home Loan

Monitoring and supervision are the main methodology for collecting the loan. This is a
stepwise process:

The branches maintain the record of the date of payment of monthly installments

The branches place the cheques to the particular bank in the appropriate date.

The unit member remainder notice to the customer 10 days before the due installment

If the installment money is not deposited after the 2 nd or 3rd remainder notice then the
brace officer visits the customer personally.

The classified loans are referred to retail credit unit to take required steps.

Effectiveness of housing loan:

The loan takes effect once certain conditions agreed to be precedent to first disbursement are
met. This is also known as loan effectiveness. In addition to "other conditions" which may be
fulfilled later, the following are some of the standard conditions said to be precedent to first
disbursements: a) designate authorized signatories for the loan resources; b) present a legal
opinion; c) submit the investment schedule; d) present a list of goods and services to be
procured; e) open and maintain a special project account; f) establish a project
implementation unit; g) any other condition agreed during negotiation as necessary to precede
first disbursement.

Generally, these conditions are limited to the legal requirements as mentioned above, as well
as cross-effectiveness of co-financing, and execution of subsidiary loan agreements. The
requirements and deadlines for loan effectiveness are stipulated in the loan agreement.

iv. Loan processing time

The officer of the retail credit unit pursue the prospective customer to take the retail
asset product

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 The customer may submit the loan application directly to the retail credit unit or to
any nearest branches of as convenience.

After receiving the credit application from the customer the branch forward it to retail
credit unit immediately.

Then the retail credit unit inspect and verify the information provided by the customer
in the credit application and apply al due diligences for approval or declining the loan.

If the retail credit committee approves the proposal, section advice is issued to the
customer and asked to finish all other documentation and to give the required number
of post date cheques.

Both the Retail credit unit and branches keep the record of approved and declined
loan proposals.

v. Loan recovery rate

The entire loan can be paid off before ending the loan repayment period. Interest has to be paid to the
day before the date of total loan repayment. All deposited documents will be returned to the borrower
after paying off the total loan. If the redemption deed is to be done with registration, borrower has to
bear the expenditure of registration.

vi. Proportion of classified loans

1) Considering the economic crisis of the borrower the classified loan can be rescheduled to
regularize. The loan under case (paying the fixed down payment by the help of court of sole
compromised) or the loan without cased the borrower themselves can take reschedule by paying down
payment mentioned below:

1st rescheduling: 15% of total overdue 10% of total balance can be chosen minimum one
between the two.
2nd rescheduling: 30% of total overdue 20% of total balance can be chosen minimum one
between the two.
3rd rescheduling: 50% of total overdue 30% of total balance can be chosen minimum one
between the two.
2) If the rescheduled borrower cannot pay down payment he can go for installment. In this case after
1st installment the next installment will be within 90 days or 3 months.

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vii. The proportion of non-performing loans
viii. Reasons for the deviation of actual loan from the quantum of the
loan amount requested
Constraints to achieving effectiveness
Measures needed to improve effectiveness as perceived by managerial personnel.

3.2 Customer Satisfactions:

A Customer is a person who brings us his wants. It is our job to handle them profitability to him and
to ourselves. How do we build strong and innovative organizations that can survive and prosper
during times of great change? In recent years, we have learned much about successful organizations.
The success of such organizations can be understood by how well the organization handles three key
ingredients. State of mind of customers when expectations have been met or have exceeded over the
lifetime of the products/services i.e. Customer satisfaction, a business term, is a measure of
how products and services supplied by a company meet or surpass customer expectation. It is seen as
a key performance indicator within business. In a competitive marketplace where businesses compete
for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key
element of business strategy. Customer satisfaction is an ambiguous and abstract concept and the
actual manifestation of the state of satisfaction will vary from person to person and service to service.
The state of satisfaction depends on a number of both psychological and physical variables. Its a well
known fact that no business can exist without customers. And with increasing competition and with
that more customers need and expectations a whole lot of changes have taken place.

Customer Satisfaction=Result-Expectation

Customer Satisfaction=Performance-Expectation

To find out the Satisfaction level of customer towards Housing loan.

To understand the operating and processing system of house loan in banking.
To suggest the method to improve customer Satisfaction level.

The Need to Measure Customer Satisfaction:

Satisfied customers are central to optimal performance and financial returns. In many places in the
world, business organizations have been elevating the role of the customer to that of a key stakeholder
over the past twenty years. Customers are viewed as a group whose satisfaction with the enterprise
must be incorporated in strategic planning efforts. Forward-looking companies are finding value in
directly measuring and tracking customer satisfaction (CS) As an important strategic success
indicator. Evidence is mounting that placing a high priority on CS is critical to improved

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organizational performance in a global marketplace. With better understanding of customers'
perceptions, companies can determine the actions required to meet the customers' needs. They can
identify their own strengths and weaknesses, where they stand in comparison to their competitors,
chart out path future progress and improvement. Customer satisfaction measurement helps to promote
an increased focus on customer outcomes and stimulate improvements in the work practices and
processes used within the company. When buyers are powerful, the health and strength of the
company's relationship with its customers its most critical economic asset is its best predictor of
the future. Assets on the balance sheet basically assets of production are good predictors only
when buyers are weak. So it is no wonder that the relationship between those assets and future income
is becoming more and more tenuous. As buyers become empowered, sellers have no choice but to
adapt. Focusing on competition has its place, but with buyer power on the rise, it is more important to
pay attention to the customer. Customer satisfaction is quite a complex issue and there is a lot of
debate and confusion about what exactly is required and how to go about it. This article is an attempt
to review the necessary requirements, and discuss the steps that need to be taken in order to measure
and track customer satisfaction.

Requirement for Customer Satisfaction:

Since Customer Satisfaction is an important goal of any marketing program. It becomes necessary to
establish factors which help satisfy the Customers.

The important Factors are:

Quality
Fair price
Good customer handling skills
Efficient delivery
Effective and economical after sales service
Serious consideration of consumer complaints

Key Ingredients:

A convenient way to think of the strategy for success is to picture a three-leg stool. The stool
represents the organization supported by three legs, which symbolize these key ingredients. Each leg
has very separate and distinct attributes and each is critical to the survival of the organization.

The legs of the stool are visionary leadership, internal data from employees and external data from the
customers of the organization. The first leg or element is visionary leadership. Any organization
comes into existence because of a vision. Sometimes the vision lasts, remaining clear and compelling.
Other times the original vision fades, as does the relevance of the organization.

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In quiet times, leadership often is simply called upon to maintain and refine goals for an organization.
In such tranquil conditions once an organization hits upon a successful product or service, it can
expect to see it have a lifetime of decades before obsolescence sets in. Today, however, products or
services may have a brief lifetime measured by a few years or even just months. To survive in these
conditions, leadership must develop an organization that is highly tuned both to the environment and
to internal processes.

The next element, the second leg of the stool, is data from the employees of the organization that
provide the employees visions of their work and the organization. These are the internal data. This is
information gathered from the people that make up the organization. It is the opinions, working
knowledge, supervisory assessments, and observations that come from people that do the work of the
organization. Internal data are concerned with how capable employees feel the organization is. Do
employees feel that the organization stresses and achieves quality? Is there cohesiveness among
employees so that there is a team effort to get the work done? Do employees feel a sense of
commitment to the organization and feel that the organization supports them? Do employees feel they
are treated fairly by the organization? Do employees see a sense of mission in the organization and a
focus on excellence? Does one part of the organization work well with other parts? Does the
organization meet the needs of internal customers? Internal data are the employees assessment of
how the organization is performing.

Techniques for Measuring Customer Satisfaction:

Businesses have learned to collect data on a number of dimensions to create external data or customer
satisfaction information. Sales figures and if the trend is up or down over time are important. Usually
strong sales mean customer satisfaction. Sometimes it means that a business has a unique product
with little or no competition but typically sales and customer satisfaction are correlated. Customer
loyalty or repeat business is another important dimension of customer satisfaction. Brand recognition
is another. Outstanding organizations have products that are recognized and respected.

More sophisticated efforts lead to an understanding of customer success with ones own efforts and
that of competitors. A company will purchase a competitors product or use their service to determine
how it compares or benchmarks against their own. Products will be examined in careful detail to
determine the durability, cost, and desirability. Businesses will comparison shop to examine a
competitors range of options, price, availability, quality, location, delivery alternatives, service
capability, convenience, and product guarantee. Many businesses will also use mystery or phantom
shoppers to gauge how well their employees respond to their own customers.

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Problems faced by customers in home loan:

There are everything in the world has good or bad points. No doubt banking industry/company has
made many efforts to enhance the customer satisfaction but customer still faced some problems.
These are high lightened as below:

The customer does not have proper knowledge about different home loan products so they face
problem in making a good deal.

There are procedural delays, which harass the customers lot. This will crush the country of customers
to avail the home loan.

The attitude of bank employees sometimes non cooperative and it creates a hurdle in building trust
and confidence among customers about banks.

The banks do not take into account the paying capacity of customers. So some customers are not able
to get amount of loan needed by them. So above discussed are the problems which faced by customers
while availing home loan.

Why Customer Satisfaction Is Important:

The connection between customer satisfaction and government organizations is less direct than for
many businesses. Dissatisfied customers in business mean decreasing sales and new competition.
Dissatisfied customers in government can express themselves through elections but that is a slower
and less direct process. In business, customer problems will affect the bottom line in a few months,
but in government the impact of dissatisfaction can take years. Therefore, there is a need to develop
more timely methods to assess satisfaction. Citizen complaints, if unknown or ignored, can result in
the failure of efforts and a depletion of support and validity of all government. If citizens, for
example, do not feel that the public schools teach effectively, parents will seek to place children in
private schools, lessen participation in school board elections, and oppose bonds and taxes necessary
to support schools. Or if citizens feel that law enforcement is inadequate or not honest, cooperation
will lessen and violence and crime may increase.

Customer satisfaction involves an orientation that says, "take care with all parts of the process that
develops a good or service for the ultimate customer." In most settings that customer will be the one
who pays to buy the good or service.

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In the governmental sector, there will be several customers - the one who uses or consumes the
service, the ones who regulate it (Judicial and Legislative), the ones who authorize it (Legislature),
and the ones who manage public approval (Executive).

Steps in Assessing Customer Satisfaction:

Develop a listing and categorize your customers. This will include:

External customers-those that use your services (directly and indirectly)

Internal customers-all organizations have components that serve other components.

These are internal customers.

Suppliers-traditionally you are a customer to them but by thinking of them as a customer,

and of the information and access they need to meet their contracts with you, you will gain

dividends in your own services.

Categorize your products or services.

Determine what needs and wants your services or products meet.

Determine what sets your service apart from others?

Establish a customer orientation to include:

Customers should be encouraged to tell you about any problems,

Customers should know their rights and responsibilities from the beginning,

Customers should know how to take advantage of their rights,

Customers should feel in control.

Customers should know precisely who to contact

Carefully scrutinize how your customers reach you and what barriers they encounter:

How does your telephone system work? What are average wait times? How many times is a

Caller referred before finding someone able to answer the question?

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Please find information of the following organizations-
>House building finance corporation
>Delta Brac Housing
>and National housing finance.
Growth rate of customer in terms of home loan last 5 years

Growth Rate of House building finance corporation (Tk. in crore)

Years 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Sanctioned 226.06 237.71 247.30 258.87 366.65 534.21
Growth Rate -- 5.15% 9.40% 14.51% 62.19% 136.31%
Growth Rate of Delta Brac Housing (Tk. in crore)
Years 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Sanctioned 463.40 519.70 700.60 612.80 575.70 540.50
Growth Rate -- 12.14% 51.18% 32.23% 24.23% 16.63%
Growth Rate of National Housing Finance (Tk. in crore)
Years 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Sanctioned 78.25 121.74 173.91 137.31 106.92 153.71
Growth Rate -- 55.57% 122.24% 75.47% 36.63% 96.43%

How much loan they have disbursed in the last 5 years

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 Loan disbursed of House building finance corporation (Tk. in crore)
Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Disbursement 243.44 233.42 224.33 294.84 437.49
Loan disbursed of Delta Brac Housing (Tk. in crore)
Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Disbursement 532.70 715.80 646.00 590.40 535.70
Loan disbursed of National housing finance. (Tk. in crore)
Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Disbursement 115.21 151.03 101.81 92.21 139.22

How much they recovered in the last 5 years and

Loan Recovered of House building finance corporation (Tk. in crore)

Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Recovered 356.90 404.55 413.45 418.77 466.01
Loan Recovered of Delta Brac Housing (Tk. in crore)
Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Recovered 210.52 259.40 234.10 346.00 405.20
Loan Recovered of National housing finance (Tk. in crore)
Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Loan Recovered 113.79 115.37 109.97 119.48 153.53

How much outstanding classified loan last 5 years

Outstanding Classified Loan of House building finance corporation (Tk. in crore)

Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Outstanding Classified Loan 333.58 372.23 394.16 362.64 276.49
Outstanding Classified Loan of Delta Brac Housing (Tk. in crore)
Years 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
Outstanding Classified Loan 1.38 1.48 1.78 2.77 6.44

Outstanding Classified Loan National housing finance. (Tk. in crore)

Years 2009 2010 2011 2012 2013
Outstanding Classified Loan 38.95 31.98 26.62 43.18 24.01

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Chapter: 4 Questionnaire Survey Analysis and Page No.
Overall Survey Analysis

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4.1 Survey Analysis:

As I am preparing a Project on Customer Satisfaction on Home Loan in Bangladesh:

A Comparative Study of Some Selected Financial Institutions I have designed a

Questionnaire to know your views and satisfaction level of home loans. I have conducted a
survey which includes the following questionnaire surrounded by IDLC, Islami Bank, Prime
Bank Ltd., Pubali Bank Ltd & Standard Charterd Bank Ltd. in home loan sector.

Question No: 1

In which type of job you are?

Particular Response
Government sector 26%
Private sector 42%
Business 18%
Others 14%

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 Inwhichtypeofjobyouare?

Others; 14%
Government sector; 26%

Business; 18%

Private sector; 42%

Interpretation:

This question was about the Profession of the respondents. I collected different answer from
them. Among the 100 respondents, 26% were Government sector, 42% were service private
sector, 18% were business sector and 14% others profession. So, most of them were private
service holders.

Question No: 2

What is your salary structure slab (Per Month)?

Particular Response

<Rs.10,000 22%

Rs.10,000-Rs.20,000 46%

Rs.20,000-Rs.30,000 20%

>Rs.30,000 12%

Interpretation:

This question was about the Salary structure of the respondents. I collected different
answer from them. Among the 100 respondents, 22% were >Rs,10,000, 46% were Rs.
10,000-Rs. 20,000, 20% were Rs. 20,000-30,000 and 12% Rs.30,000. So, most of them were
Rs. 10,000-20,000% salary.

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 What is your salary structure slab (Per Month)?

>Rs.30,000; 12%
<Rs.10,000; 22%

Rs.20,000-Rs.30,000; 20%

Rs.10,000-Rs.20,000; 46%

Question No: 3

What is your opinion regarding the home loan procedure?

Opinion Complex Difficult Simple Cant say

(Own Safety)

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Response 10% 14% 44% 32%

Interpretation:

Among 100 respondents, 10% says that home loan procedure is complex, 14% says that it is
difficult, 44% says that it is simple and 32% says that home loan procedure is cant say. So,
home loan procedure is simple.

Question No: 4

Which type of interest rate have you preferred?

Particular Fixed Floating Adjustable Others

Response 48% 42% 7% 3%

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 Which type of interest rate have you preferred?

Fixed Floating Adjustable Others

7% 3%

48%
42%

Interpretation: Among 100 respondents, 48% persons are interested in fixed rate of interest
at the time of home loan, 42% persons are interested in floating rate of interest, 7% persons
prefer adjustable rate of interest and 3% prefers other interest rates.

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Question No: 5

What criteria are considered by you while selecting the home loans?

Particular Response

Lower rate of interest 25%

Easy availability 15%

Flexible repayment period 45%

Quality of service 8%

Lower processing fees 7%

What criteria is considered by you while selecting the home loans?

7% Lower rate of interest

8% 25% Easy availability
Flexible repayment
period
Quality of service
15% Lower processing fees
45%

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Interpretation:

Among 100 respondents, 25% persons are Lower rate of interest, 15% persons are Easy
availability, 45% persons are Flexible repayment period, 8% persons are quality of service
and 7% prefers lower processing fees.

Question No: 6

Are you satisfied with the bank or financial institution from where you have availed the
home loan?

Particular Yes No

Response 58% 42%

Are you satisfied with the bank or financial institution from where you have availed the home loan?

Yes
42%
No

58%

Interpretation:

Among 100 respondents, 74% persons say that the satisfied financial intuitions availed the
home loan and 26% persons says that the dissatisfied financial intuitions availed the home
loan.

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Question No: 7

How did you come to know about the specific financial institution offering home loan?

Particular Phon Internet Television Friends/Relatives Brochure

e

Response0 8% 43% 15% 22% 12%

Howdidyoucometoknowaboutthespecificfinancialinstitutionofferinghomeloan?

12% 8% Phone
Internet
Television
22%
Friends/Relatives
43% Brochure

15%

Interpretation:

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Among 100 respondents, 8% persons say that the offering home loan the phone, 43% persons
say that the offering home loan the internet, 15% persons say that the offering home loan the
television, 22% persons say that the offering home loan the Friends/relative ,and 12% persons
says that the offering home loan the brochure. So, home loan offering the internet.

Question No: 8

Which bank you prefer to take personal loan?

Particular Response

IDLC 40%

Islami Bank Ltd. 40%

Others 20%

Whichbankyouprefertotakepersonalloan?

IDLC Islami Bank Ltd. Others

30%

50%

20%

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Interpretation:

Among 100 respondents, 50% persons say that the prefer to take personal loan IDLC, 20%
persons say that the prefer to take personal loan Islami Bank and 30% persons say that the
prefer to take personal loan other banks. So, prefer personal loan IDLC is better.

Question No: 9

Which bank provide home loan at lower rate of interest?

Particular Response

Prime Bank 52%

Pubali Bank Ltd. 34%

Others 14%

Whichbankprovidehomeloanatlowerrateofinterest?

Others ; 14%

Prime Bank; 52%

Pubali Bank Ltd.; 34%

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Interpretation:

Among 100 respondents, 52% persons say that the lower rate of interest Prime Bank, 34%
persons say that the lower rate of interest Pubali Bank Ltd. & 14% persons say that the lower
rate of interest Others Bank. So, lower rate interest of Prime bank is improved.

Question No: 10

Easy availability is an important factor for home loans. Do you agree?

Particular Response

Totally Disagree 20%

Disagree 14%

Agree 35%

Totally Agree 31%

Easy availability is an important factor for home loans. Do you agree?

Totally Disagree; 20%

Totally Agree; 31%

Disagree; 14%

Agree; 35%

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Interpretation:

Among 100 respondents, 20% persons say that the totally disagree, 14% persons say that the
disagree, 35% persons say that the agree and 31% persons say that the totally disagree So,
important for home loans is better.

Question No: 11

Which bank easily provide home loan?

Particular Response

Standard Chartered Bank 54%

Pubali Bank Ltd. 28%

Others 18%

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 Whichbankeasilyprovidehomeloan?

Standard Chartered Bank Pubali Bank Ltd.

Others

18%

54%
28%

Interpretation:

Among 100 respondents, 54% persons say that the provide home easily the Standard
Chartered Bank , 28% persons say that the provide home easily the Pubali Bank Ltd. and
18% persons say that the provide home loan easily Others Banks. So, easily home provide the
Standard chartered bank is first-rate

Question No: 12

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Flexible repayment period plays an important role while taking home loans. What is
your opinion?

Particular Response

Indifferent 23%

Agree 48%

Totally Agree 29%

Flexiblerepaymentperiodplaysanimportantrolewhiletakinghomeloans.Whatisyouropinion?

Totally Agree; 29% Indifferent; 23%

Agree; 48%

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Interpretation: Among 100 respondents, 23% persons are say that the Indifferent, 48%
persons are say that the Agree and 29% persons are say that the totally agree. As a result
Flexible repayment home loans agree is better.

Question No: 13

Which bank provide flexible repayment period?

Particular Response

IDLC 54%

Prime Bank 36%

Others 10%

Whichbankprovideflexiblerepaymentperiod?

IDLC Prime Bank Others

10%

36% 54%

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Interpretation: Among 100 respondents, 54% persons are say that the flexible repayment
period is IDLC, 36% persons are say that the flexible repayment period is Prime Bank Ltd.
and 10% persons are say that the flexible repayment period is others bank. So, flexible
repayment is IDLC better.

Question No: 14

Do provisions of more insurance affect your selection of mortgage from banks?

Particular Response

Disagree 26%

Agree 74%

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Doprovisionsofmoreinsuranceaffectyourselectionofmortgagefrombanks?

26%
Agree
Disagree

74%

Interpretation: Among 100 respondents, 74% persons are say that the insurance affect for
selection from banks disagree and 26% persons are say that the insurance affect for selection
from banks agree. So, insurance affect for selection from banks is disagree of high.

Question No: 15

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Prepayment penalty need to be taken into consideration while taking home loan. What
is your opinion?

Particular Response

Indifferent 12%

Agree 68%

Totally Agree 20%

Prepaymentpenaltyneedtobetakenintoconsiderationwhiletakinghomeloan.Whatisyouropinion?

Indifferent Agree Totally Agree

12%
20%

68%

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Interpretation: Among 100 respondents, 12% persons are say that the prepayment need to
be taken indifferent, 20% persons are say that the prepayment need to be taken and 68%
persons are say that the prepayment need to be taken agree. So, prepayment need to taken
consideration to agree is superior.

Appendix

Questionnaire

(Only for thesis paper purpose)

I am Md. Abdullah Al Mobin doing MBA Program from UITS. I am preparing a Project on
Customer Satisfaction on Home Loan in Bangladesh: A Comparative Study of Some Selected
Financial Institutions. For this I have designed a Questionnaire to know your views and
satisfaction level of home loans. Yours valuable time and effort in filling this Questionnaire
are highly appreciated. The information collected through this Questionnaire is a part of our
Project. I have conducted a survey which includes the following questionnaire surrounded by
IDLC, Islami Bank, Prime Bank, Pubali Bank & Standard Chartered Bank in home loan
sector. So, please fill the question precisely to help me make the research successfully.

Age:...............................
Gender:..................................

Question No: 1

In which type of job you are?

Particular Response

Government sector

Private sector

Business

Others

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Question No: 2

What is your salary structure slab (Per Month)?

Particular Response

<Rs.10,000

Rs.10,000-Rs.20,000

Rs.20,000-Rs.30,000

>Rs.30,000

Question No: 3

What is your opinion regarding the home loan procedure?

Opinion Complex Difficult Simple Cant say

(Own Safety)

Response

Question No: 4

Which type of interest rate have you preferred?

Particular Fixed Floating Adjustable Others

Response

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Question No: 5

What criteria are considered by you while selecting the home loans?

Particular Response

Lower rate of interest

Easy availability

Flexible repayment period

Quality of service

Lower processing fees

Question No: 6

Are you satisfied with the bank or financial institution from where you have availed the
home loan?

Particular Yes No

Response

Question No: 7

How did you come to know about the specific financial institution offering home loan?

Particular Phon Internet Television Friends/Relatives Brochure

e

Response0

113 | P a g e
Question No: 8

Which bank you prefer to take personal loan?

Particular Response

IDLC

Islami Bank Ltd.

Others

Question No: 9

Which bank provide home loan at lower rate of interest?

Particular Response

Prime Bank

Pubali Bank Ltd.

Others

Question No: 10

Easy availability is an important factor for home loans. Do you agree?

Particular Response

Totally Disagree

Disagree

Agree

Totally Agree

Question No: 11

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Which bank easily provide home loan?

Particular Response

Standard Chartered Bank

Pubali Bank Ltd.

Others

Question No: 12

Flexible repayment period plays an important role while taking home loans. What is
your opinion?

Particular Response

Indifferent

Agree

Totally Agree

Question No: 13

Which bank provide flexible repayment period?

Particular Response

IDLC

Prime Bank

Others

Question No: 14

Do provisions of more insurance affect your selection of mortgage from banks?

Particular Response

Agree

Disagree

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Question No: 15

Prepayment penalty need to be taken into consideration while taking home loan. What
is your opinion?

Particular Response

Indifferent

Agree

Totally Agree

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 Chapter: 05 Finding of the Study Page No.

Finding of the Study

5.1 Findings

Between the different loans offered the study establishes that most of the client availed home
loan while the takers for mortgages and home loan are relatively less i.e. 52% have valid
home loan, 28% are auto loan and 20% are consumer durable loan in that order. Hence it is
optional for the company to insistently advertise these loan facilities in both newspapers and
Television channels so that many people may be aware of the similar.

117 | P a g e
 A main concern in the loan industry is the apparent backwardness in the acceptance of
new. Building technologies for the adoption of new construction technologies and
practices, which can reduce cost and increase quality?

Lac of suitable planning and programming for the loan project.

It has been observed that the construction material and equipment differ from place to
place, considering this fact, specialized standards and code should be made.

Lac of modern technologies in the ~ sector for high productivity.

Lac of proper research support and financial support in public and private sectors.

Ecological impacts and other information are not available to the public.

Selection of building materials, the consultants and experienced contractors are in

adequate.

Lac of general rule of building designs to prepare suitable planning rules, structure
code based on the character of the area. It should also cover building regulations and
related detailing of the building and also cover assortment of materials.

With a reduction of encouragement of local based building materials as well as

cheaper alternative/substitutes.

No separate financial policies for consultants/contractors.

Lac of management effectiveness in the construction sector.

No extensive and multifold regulation.

Lac of establishment the regulations and control procedures of the government.

Most of the people are directly goes to IDLC & Islami Bank to apply a house loan.

Some of the customers already benefited through Prime Bank & Standard Charters
Bank. Home loans products and services.

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 Customers awareness is medium about financial institutions products.

52% of the respondents are aware of the home loan through agent.

Particular financial policies for consultants/contractors financing should be

introduced. It would be included: i) reduction of bureaucracy ii) generous advance
payments, iii) risk guaranties etc.

It was founded that 58% of the respondents are rate the service of home loan as very
good.

Lac of appropriate planning and programming for the construction project.

90% of the existing customers are happy with the benefits of home loan. The
following have been made after the survey and findings:

Business bank may reduce the barriers in the loan process and also to reduce the time
taken for face-lifting the loan. Corporation bank may modify their loan releasing
system. Corporation bank may update the changes in the interest rate to the
customers.

119 | P a g e
Chapter: 6 Conclusion & Recommendation Page No.

6.1 Recommendation

6.2 Conclusion

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6.1 Recommendation:

Interest rate of loan products has declined in the current past and present is a wide increase
theory in the marketplace with the purpose of charge will be lowered extra which causes
many clients to receive a back seat and wait for the rate to be further reduced. To counter this
situation and also to manage attention rate risk loan products of DBH should be designed
based on variable rate return with a proven for adjustment for both upward and downward
movement of the interest rate.

Because this is a especially price sensitive industry there is small space for the companies to
gain a price benefit from its competitors. The main degree of variation factors for the
customer will be the service quality. DBH should put its effort to further improve the loan
approval process and make it hassle free for the customers. It should cut the lead-time to
sanction and disburse the loan to take benefit over its competitors.

Toward increase their clients the Financial Institutions should provide specialized
services in this sector. There services can be such as proper guidance to the customer
regarding the processing of loans, especially for the customers who are illiterate.

To satisfy their customers and for good dealing in future, the Financial Institutions
should make punctual disbursement of loan amount to the customers so that they can
buy on construct their dream home as early as possible.

Although the interest rates on specify norms, yet customers seek less interest rate
which can lower their cost of house. So Banks should try to lower their interest rate.
Needles to say, that the Bank which is having lower interest rates, have the maximum
clients for loans.

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 The Financial Institutions should use easy procedure, on say less lengthy procedure to
the sanctioning of loan to the customer. There should be less number of legal for
militias, in case this exists, then these should be completed in less time. This will be
helpful in a attracting more customers.

The Financial Institutions provide loan according to the repaying capacity of the
customers and his/her eligibility due to the repaying capacity of the customers and
his/her eligibility due to which some customers are not able to get amount of loan
needed by them. So the Financial Institutions should so often their norms regarding
the loan amount. The company has to take care of awareness creation about the
products and services among the customers. The company has to reduce the mentality
and administration charges.
The company has to identify the potential customers.

Company should consider the present competition and should according to the
customer needs.

The Financial Institutions should try to provide proper knowledge regarding their
home loan schemes, even to people who do not know about such schemes and their
benefits especially in rural areas and backward urban areas. So above are the main
suggestion provide to the Financial Institutions. By considering these suggestions, the
Financial Institutions can strengthen their customer here in home loans sector. They
should improve their services and reduce legal proceedings and should be friendly
their customers. All this will be helpful to satisfy their clients.

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6.2 Conclusion:

IDLC, Islami Bank, Prime Bank, Pubali Bank & Standard Chartered Bank is one of the
highly potential private financial institutions and it has several schemes. Housing loan
Scheme one of the most possible schemes of this company and this schemes growth depends
on real estate development sector. We have studied the role of housing finance for the
transmission of monetary policy on consumption, residential investment and house loans in a
sample of countries. If the department build up a good relationship with the several banks
house and also provide some extra facilities to the clients in terms of less interest rate, less
processing period then they will able to develop the portfolio of this schemes. By analyzing
the present status of several banks we found that there is a high demand and ensure the better
customer service that help the banks to go for a good position in the industry for near future.
So, we think management of the organization will be take some initiatives by considering
these circumstances and ensure smooth sustainability of the housing loan of the financial
institutions/company.

The preparation and design approach is very important components in the construction sector
specially to ensure sustainability. The technology and innovation in the construction industry
may reduce construction cost and time, as well as increase safety. New technological
innovations, often in conjunction with materials and equipment, should be introduced into
several of the disciplines within the construction industry. Such technology also ensures
higher productivity, which can bring socio-economic prosperity to the country. The
Government sets regulations on construction industry (building code, land use, tendering
constructors negotiation and environmental regulation) in national and local level. Changes
are also sought to improve quality, management efficiency, material flow, and maintain
schedules by better organization and controlling of design and production process.

In my study we came to know that many people are interested to take a home loan from
Financial Institutions to make their homes.

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 Home Loans have long period when compare to other personal loans and others loans.
So peoples are confused to take a home loan.
Even though the interest rates are high peoples are willing to take a loan from
Financial Institutions due to some reasons.
The interest rates also somewhat high compare to other commercial banks.
The Loan sanction process is low when compare to other Banks.
For disbursement process is also it will take low time when compare to other Banks.

To conclude the complete research was carried out in a systematic way to reach at exact
results. The complete research and result were based on the objectives. However the study
had some limitation also such as be short of time, be short of data, non-response, relevant
approach and illiteracy of respondent which posed problems in carrying out the research. But
proper attention was made to carry out research in proper way and to make accurate
conclusion for the bank which may beneficial for banks to enhance their customer base.

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125 | P a g e
Bibliography:

Book:

R.M Debnath, Business of Banking ,Lotus Publishers , 1st edition, pp. 07-29
(February, 2004),
Fabozzi, Frack. J & Ferri, Michael. G. Foundation of Financial Markets &
Institutions, Thomson Learning, inc., a division of South- Western., 3rd Edition,
pp. 175-190. (2003)
Faruki, K. & Saima, K. Higher Secondary Banking & Insurance (Correction
Edition), Amin new offset press. Banglabazar / Dhaka. pp. 135-146. (2006)
Madura Jeff Financial Markets & Institutions Amy Mcguire Publishers, 7th
Edition, , PP 90-98. (2006)
Besley-Cott Essentials of Managerial Finance Mike Roche Publishers, 8th
Edition, PP 385-391. (2002)
A. Ross-Stephen & W. Westertield Randeolph & Jaffe Jeffrey Corporate Finance
MC. Graw-Hill Book Co. Publishers, 5th Edition, PP 427-439. (2005)

Website:

www.idlc.com
www.islamibankbd.com
www.primebank.com.bd
www.pubalibangla.com
https://www.sc.com/bd/en/
www.bhbfc.gov.bd
www.deltabrac.com
www.bhbfc.gov.bd
www.nationalhousingbd.com

Annual Report:

Annual Report of IDLC 2013

Annual Report of Islami Bank Bangladesh 2013

126 | P a g e
Annual Report of Prime Bank 2013

Annual Report of Pubali Bank Ltd 2013

Annual Report of Standard Chartered Bank of Bangladesh 2013

Annual Report of House Building Finance Corporation 2009-2013

Annual Report of Delta BRAC Housing 2009-2013

Annual Report of National housing finance 2009-2013

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