1.

0 Introduction:
1.1 Origin

An internship is an opportunity to integrate career related experience into an undergraduate education by participating in planned, supervised work. It is a pre-requisite to obtain BBA degree. Only after preparing & submitting the report this program becomes completed. With this requirement, after completion of forty academic courses the 14th intake of BBA program was instructed to start internship by the School of Business, Bangladesh University of Business & Technology (BUBT). An Internship position at Trust Bank Limited was acquired and topic of the report was proposed to the supervisor of my internship program, Md. Aslam Uddin. With his approval and conscience this report was prepared.

1.2 Broad objective The main objective of this report is to understand customer perception about Retail Banking of Trust Bank Limited (TBL). 1.3 Specific objectives There are some parts that are needed to fulfill the general objective which are known as specific objective. These are To identify the various products of the Retail banking unit of Trust Bank Limited. To measure the customer perception about different products of Retail Banking unit of Trust Bank Limited by questionnaire survey To evaluate the market position of Retail banking unit of Trust Bank Limited To identify some major weaknesses and problems faced by Trust Bank Limited in respect of Retail banking unit.

1.4

Scope of the Study: 1

Scope of the study is quite clear. Since TBL is dealing with all types of banking activities in the bank, this report has been prepared through my work experience, discussing with my mentors in specific desk , and my acquired knowledge, Studying these core themes, Opportunities are there to learn other aspects of RETAIL or Consumer matters. Market positions along with other facts and figures were gathered from research reports conducted by me, on behalf of Trust bank LTD.

Methodology: 1.5.1 Type of research:

In this report descriptive research is used. In home personal interviewing method has been used to conduct this research. 1.5.2 Sources of data In this report all necessary information are collected from both sources of data. The sources are as follows: 1.5.3 Primary sources:

Data originally collected for an investigation are known as primary data. The primary data has been collected by using questionnaire survey to the clients of Retail banking unit of Trust Bank Limited (TBL), Mirpur Branch. 1.5.4 Secondary sources: The data which are collected for some earlier research work and are applicable or usable in the study. Secondary information required for the industry part and organization part was collected from the annual report and website of Trust Bank Limited (TBL). 1.6 Data collection procedure: 2

1.6.1 Collection of Primary Data: Questionnaire survey Observation Face to face interview with questionnaire survey to the customers of Trust Bank Ltd.

Collection of Secondary Data:

Annual report of Trust Bank Ltd. (2009 to 2010) Website of Trust Bank Ltd. Organizational broachers

1.6.2 Population: The population of the study is the clients of Retail Banking Unit of Mirpur Branch. 1.6.3 Sample size: 50 Peoples have been taken from Mirpur for this study. 1.6.5 Sampling technique: Non probability convenience sampling technique is used to conduct this study. 1.6.6 Research instrument (Questionnaire):

Questionnaire is very flexible and easy to collect answer than other instrument. So I choose questionnaire research instrument to collect primary data for the report. All details about questionnaire are given below: No of question: 20 questions are in the questionnaire Questionnaire format: structured Font size: 11 Required time to complete answers of questionnaire: 15-20 minutes 1.7 Limitations of the Study: 3

There are some limitations of the report and therefore it may lack some crucial data. In preparing the report I faced some problems, which are as follows: The main constrain of the study was insufficiency of information, which was required for the study. There are various information the bank would not provide due to security and other corporate obligations. Due to time limitation many of the aspects could not be discussed in the present report. Learning all the functions within just 90 days is really tough. Since the bank personnel were very busy, they could not provide enough time to me. Lack of opportunity to visit more than one branch.

2.0 OVERVIEW OF TRUST BANK LIMITED

4

2.1 ABOUT TRUST BANK LIMITED

Trust Bank Limited is one of the leading private commercial banks having a spread network of 53 branches and 7 SME center across Bangladesh and plans to open few more branches to cover the important commercial areas in Dhaka, Chittagong, Sylhet and other areas in 2010. The bank, sponsored by the Army Welfare Trust (AWT), is first of its kind in the country. With a wide range of modern corporate and consumer financial products Trust Bank has been operating in Bangladesh since 1999 and has achieved public confidence as a sound and stable bank.

In 2001, the bank introduced automated branch banking system to increase efficiency and improve customer service. In the year 2005, the bank moved one step further and introduced ATM services for its customers.

Since banks business volume increased over the years and the demands of the customers enlarged in manifold, our technology has been upgraded to manage the growth of the bank and meet the demands of our customers.

In January 2007, Trust Bank successfully launched Online Banking Services which facilitate Any Branch Banking, ATM Banking, Phone Banking, SMS Banking, & Internet Banking to all customers. Customers can now deposit or withdraw money from any Branch of Trust Bank nationwide without needing to open multiple accounts in multiple Branches.

Via Online Services and Visa Electron (Debit Card), ATMs now allow customers to retrieve 24x7 hours Account information such as account balance checkup through mini-statements and cash withdrawals.

Trust Bank has successfully introduced Visa Credit Cards to serve its existing and potential valued customers. Credits cards can now be used at shops & restaurants all around Bangladesh and even internationally. Trust Bank is a customer oriented financial institution. It remains dedicated to meet up with the ever growing expectations of the customer because at Trust Bank, customer is always at the center.

2.2 Vision & Mission of Trust Bank

VISION:
We aim to provide financial services to meet customer expectations so that customers feel we are always there when they need us, and can refer us to their friends with confidence. We want to be a preferred bank of choice with a distinctive identity.

MISSION:
Our mission is to make banking easy for our customers by implementing one-stop service concept and provide innovative and attractive products & services through our technology and qualified human resources. We always look out to benefit the local community through supporting entrepreneurship, social responsibility and economic development of the country.

POSITIONING STATEMENT:
Trust Bank is a contemporary, upbeat brand of distinctive quality of service and solution that offers a rewarding banking experience as preferred choice of banking partner every time, every where.

OUR VALUE:
1) Trustworthy 2) Dependable 3) Reliable 4) Professional 6

5) Dynamic 6) Financial inclusion

2.3 PERFORMANCE

OF THE

BANK

TBL a blend of expertise and technological excellence is in place to meet varied needs of modern customers. The bank aims at mobilizing untapped money of the country and prudent deployment for productive activities in the form of lending at a competitive interest rates/loan pricing. Towards attainment of its goals and objectives, the bank pursues diversified credit policies and strategic planning in credit management. To name a few, the bank has extended micro credit, consumers durable scheme loans, house building loans etc. to cater to the needs of the individuals, which in turn has helped thousands of families. The bank also extends loan in the form of trade finance, industrial finance, project finance, export & import finance etc. The banks credit polices aimed at balanced growth and harmonious development of all the sectors of the countrys economy with top most priority to ensure quality of lending by averting growth of non-performing assets.

2.4 BRANCHES Trust Bank Limited now continues its operation with 53 branches and 7 SME center across the country. The management is feeling that they need more branches all over the Bangladesh to provided ardent services to more clients. In association of this view, TBL has taken up a program to expand its branches in commercially important areas within the country in near future.

2.5 O RGANOGRAM

OF

TRUST BANK LIMITED, MIRPUR BRANCH MANAGER

SUB-MANAGER

Remittance

Islamic Banking

Credit Division

Cash-InCharge

Sanchaypatra

Account Opening

Card Division

Clearing

2.6 MANAGEMENT OF THE BANK Chairman Vice-Chairman Board of Director Company Secretary Managing Director (MD) Deputy Managing Director (DMD) Executive Vice-President (EVP) Senior Vice-President (SVP) Vice-President (VP)

To p Le ve l

FDR

FCAD

SME

& ec uti ve Le ve l M an ag e m en t

Senior Assistant Vice-President (SAVP) Assistant Vice-President (AVP) Senior Executive Officer (SEO) Executive Officer (EO) Principal Officer (PO) Senior Officer (SO) Management Trainee Officer (MTO) Junior Officer (JO)

2.7 CORPORATE INFORMATION OF THE TRUST BANK LIMITED

LEGAL FORM

The company was incorporated on 17 June 1999 under the Companies Act 1994 as a public company limited by shares for carrying out all kinds of banking activities. Registration Number & Date Sponsor Shareholders Certificate of Incorporation Received on Certificate of Commencement of Business Received on Banking Licenses Received on First Branch Licenses Received on Formal Inauguration on Corporate Web Site Email C-37960(2260)/99, 17 June 1999 Army Welfare Trust 17 June 1999 17 June 1999 15 July 1999 9 August 1999 29 November 1999 www.trustbank.com.bd info@trustbanklimited.com

INITIAL PUBLIC OFFERING

Publication of prospectus 17 May 2007 9

Lo w Le ve l M an ag e m en Mi t d Le ve l

Subscription Opening Subscription Closing Listed With Dhaka Stock Exchange (DSE) on Listed With Chittagong Stock Exchange (CSE) on Commencement of Trading of Shares at DSE Commencement of Trading of Shares at CSE

15 July 2007 19 July 2007 25 September 2007 24 September 2007 01 October 2007 01 October 2007

3.0 RETAIL BANKING OF TRUST BANK LTD.

3.1 INTRODUCTION

OF

RETAIL BANKING

Retail banking is banking that provides direct services to consumers. Many people with bank accounts have their accounts at a retail bank and banks that offer retail banking services may also have merchant and commercial branches that work with businesses. For people with high net worth and special banking needs, private retail banking services may be pursued. These offer a high level of service with a number of options that are not available to average members of the public. The most basic retail banking services include savings and checking accounts. Most retail banks, however, try to make themselves into a one stop shop for banking customers. This increases customer retention and loyalty, ensuring that the bank has a steady supply of customers. Expanding banking services also provides more opportunities for the bank to turn a profit. Retail banking refers to banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and transactional accounts, mortgages, personal loans, debit cards, credit cards, and so forth.

3.2 IMPORTANCE OF RETAIL BANKING

10

Consumer credit program is an important development scheme in the banking sector in most of the developing economics. Retail banking through its consumer finance products facilitates the consumers by enhancing their purchasing power which in terms contributes in creating demand in market. TBL retail banking has diversified products covering consumer durables to education. In addition to the financing sector TBL, RBU has also introduced different deposit products to encouraging savings behavior of the society. Before allowing any facility to an individual, bank obtains some up to date documents like gas bill, electricity bill and telephone bill to evaluate the consumer repayment behavior, TIN certificate to focus individual income, Insurance coverage and registration of the vehicles to justify the genuineness of the ownership which assist a lot to earn sizable revenue for the government. It also edifies the mass people to be punctual and honest citizen of the land.

3.3 SCOPES

OF

RETAIL BANKING

Rise of the middle class Increasing saving attitude Rise of confidence towards Banks Disposable income on the rise Upward lifestyle trend growing consumerism Increasing financial requirement Higher profitability for the bank and brand identity Huge untapped market for retail loan Huge number of high net worth TBL customers are availing retail loans from other banks.

3.4 OBJECTIVES

To motivate common people to save their small surplus money with a reasonable return. 11

 To make the people highly banking minded To sell our services to a wide range of customers and increase our Retail Credit portfolio. To provide financial assistance to the limited income group for buying household durables and utility products. To help the professionals in raising their standard of living. To participate in the socio economic development of the country.

3.5 IMPORTANCE

FROM THE

BANK S

PERSPECTIVE

It is more remunerative to the Bank. Here the customers are not much price sensitive, as in case of commercial loans. Risk is diversified. Spread is much higher than commercial lending. Loan is gradually recovered by installments and fund can be recycled.

3.6 PRODUCT & SCHEDULE OF RETAIL BANKING ON TRUST BANK LIMITED There are mainly 12 products in retail banking on Trust Bank. These are given below:I. II. III. IV. V. VI. VII.

ANY PURPOSE LOAN CAR LOAN HOUSE HOLD DURABLES APON NIBASH LOAN DOCTORS LOAN MARRIAGE LOAN EDUCATION LOAN 12

VIII. TRAVEL IX. X. XI.

LOAN

HOSPITALIZATION LOAN CREDIT CARD LOAN AGAINST TRUST MONEY DOUBLE SCHEME.

FOR GENERAL PERSON:

I.

ANY PURPOSE LOAN:

TBL have so many needs, some are attainable with our means & standing and some are unattainable. The unattainable needs can be met by TBL. "Any Purpose Loan'

ELIGIBILITY FOR ANY PURPOSE LOAN : Confirmed employee of the Govt. Organizations/ Semi-Government Organizations / Autonomous Bodies / Multinational Companies / Banks /Insurance companies / Educational Institutions / Corporate Bodies Supportive cash flow to repay the loan Maximum age limit of the borrower 60 yrs; in exceptional case, MD can relax the age limit up to any age depending on the merit of the case.

For Any Purpose Loan Loan Limit: Interest Rates (%) Down Payment / Equity Loan Period / Tenor Risk Fund

Tk. 0.5 lac -5.00 lac 17% N/A 1 4 years Nil

II.

CAR LOAN:
13

Now a car is no longer luxury but necessity. Moreover, a car is more than a symbol of prestige. TBL offers you to materialize your dream of owning a car through TBL car loan facility. ELIGIBILITY FOR CAR LOAN APPLIED BY THE EMPLOYEES OF:
A.

FOR NEW AND RECONDITIONED CAR

Confirmed Service holders, Businessman, Professionals Supportive cash flow to repay the loan Maximum age limit of the borrower 60 yrs; in exceptional case, MD can relax the age limit up to any age depending on the merit of the case.

B.

FOR MICROBUS, MINIBUS & TRUCK

Corporate bodies Individual(s) with supportive cash flow to repay the loan Maximum age limit of the borrower 60 yrs; in exceptional case, MD can relax the age limit up to any age depending on the merit of the case.

For New & Reconditioned Car Loan Limit: Tk.2.00-20.00 Lac 15%(New), Interest Rates (%) 16%(Reconditioned) Down Payment / Equity 20% Loan Period / Tenor 1 5 years Risk Fund Nil

14

For Microbus , Minibus & Trucks Tk.2.00-15.00 Lac(Microbus), Loan Limit Tk.2.00 50.00 Lac(Minibus & Trucks) Interest Rates (%) 16% Down Payment / Equity 20% 1 3 years(Microbus) , Loan Period / Tenor 1 5 years(Minibus & Trucks) Nil Risk Fund

III.

HOUSE HOLD DURABLE SCHEME LOAN:

Need are constantly changing phenomena in human life to improve the standard of living. Sometimes your saving is not good enough to meet your requirements. At, the Trust Bank, we take care of your financing needs and you can trust on us as your financial partner indeed.

ELIGIBILITY FOR HOUSE HOLD DURABLE SCHEME LOAN APPLIED BY THE EMPLOYEES OF:
Confirmed Service holders, Businessman, Professionals Supportive cash flow to repay the loan Government/Semi Government/Autonomous bodies Sector Corporation Non-Government organizations Multi-national companies Banks/Financial institutions Educational institutions Maximum age limit of the borrower 60 yrs; in exceptional case, MD can relax the age limit up to any age depending on the merit of the case.

For House Hold Durable Scheme Loan Loan Limit: Tk. 0.5 lac -5.00 lac Interest Rates (%) 17% Down Payment / 30% Equity 15

Loan Period / Tenor Risk Fund

1 4 years Nil

IV.

APON NIBASH LOAN:

TBL offers Apon Nibash (House Finance) with easy repayment schedule matching your affordability. It have unlimited options of choosing your home with limited means and standing. Here, TBL Apon Nibash helps to match long cherished dream.

ELIGIBILITY FOR APON NIBASH (HOME FINANCE) LOAN : Maximum age limit of the borrower 60 yrs in exceptional case, MD can relax the age limit up to any age depending on the merit of the case. Employees of: Confirmed employees of govt./Autonomous body Confirmed employees of financial institution Confirmed employees of different Public Limited Company/Private Limited company having Corporate Structure Teachers of any school/college/university Professionals Doctors /Medical Professionals Engineers Accountants IT Professionals Management Consultant

16

Self Employed Businessman (in business at least for five years)

For Apon Nibash Loan Loan Limit: Interest Rates (%) Down Payment / Equity Loan Period / Tenor Risk Fund Tk.upto 75.00 lac 13% 40% (for Construction) 30%(for New apartment) Up to 20 years Nil

V.

DOCTORS LOAN:

Medical is a noble profession which is evolving fast. In a country like ours it is important to be a part of those changes as we cannot afford to be lag behind. Keeping that in mind and with a vision to support and promote health services, TBL is at your side with our Doctors' Loan.

ELIGIBILITY FOR DOCTORS LOAN APPLIED BY THE EMPLOYEES OF:

General Practitioner, FCPS & MBBS Doctors/dentists or Specialist Doctors having a Postgraduate degree and specialization in a particular area of treatment such as Medicine Specialist, Eye Specialist, ENT Specialist, cardiac surgeon/specialist etc. having 5 years experience as specialist. Maximum age limit of the borrower 60 yrs; in exceptional case, MD can relax the age limit up to any age depending on the merit of the case. For Doctors Loan Loan Limit Interest Rates (%) Down Payment / Equity Loan Period / Tenor Risk Fund Tk. 1.0 lac -5.00 lac (General Practitioner MBBS/BDS), 10 lac (Specialized Doctor) 17% Nil 1 5 years Nil

VI.

MARRIAGE LOAN:

Tying the marital knot is an event of a life time and its celebration and memories should last forever. TBL "Marriage Loan" will help you to arrange celebrate the marriage in style. ELIGIBILITY FOR MARRIAGE LOAN: 17

 Employees of confirmed service holders, Businessman, Professionals This Loan is applicable for first marriage This Loan may be availed by the guardian and/or Applicant as the case may be Supportive cash flow to repay the loan Maximum age limit of the borrower 60 yrs; in exceptional case, MD can relax the age limit up to any age depending on the merit of the case.

For Marriage Loan Loan Limit: Interest Rates (%) Down Payment / Equity Loan Period / Tenor Risk Fund

Tk.0.6 lac - 3.00 lac 17% 20% 1 3 years 1%

VII.

EDUCATION LOAN:

A substantial amount of finance is required to give your child the best education or to get a higher degree either at home or abroad.TBL, "Education Loan" relief you from this burden and ensure uninterrupted study through steady flow of cash. ELIGIBILITY FOR EDUCATION LOAN APPLIED BY THE EMPLOYEES OF: Employees of confirmed service holders, Businessman, Professionals Adequate cash flow to repay the loan Maximum age limit of the borrower 60 yrs; in exceptional case, MD can relax the age limit up to any age depending on the merit of the case.
For Education Loan Loan Limit: Interest Rates (%) Down Payment / Equity Loan Period / Tenor

Tk. 0.5 lac -3.00 lac 17% 10% 1 3 years

18

Risk Fund

Nil

VIII.

TRAVEL LOAN:

When you plan to travel local or global exotic location, financing is the key issue. Don't be worried; TBL Travel loan is ready to provide instant financial support.

ELIGIBILITY FOR TRAVEL LOAN: Employees of confirmed service holders, Businessman, Professionals Adequate cash flow to repay the loan

For Travel Loan Loan Limit: Interest Rates (%) Down Payment / Equity Loan Period / Tenor Risk Fund

Tk. 0.5 lac -3.00 lac 17% 20% 1 2 years 1%

IX.

HOSPITALIZATION LOAN:

Crisis comes at anytime and well being comes at a price. When the urgency comes for medical treatment of your family, there can never be compromised. At any urgency if you feel, please remember us to provide financial support through our "Hospitalization Loan" scheme. ELIGIBILITY FOR HOSPITALIZATION LOAN: Employees of confirmed service holders, Businessman, Professionals Supportive cash flow to repay the loan Maximum age limit of the borrower 60 yrs; in exceptional case, MD can relax the age limit up to any age depending on the merit of the case. 19

For Hospitalization l Loan Loan Limit: Tk. 0.5 lac -3.00 lac Interest Rates (%) 15% Down Payment / Equity 10% Loan Period / Tenor 1 2 years Risk Fund Nil

X.

CREDIT CARDS:

Credit Cards forms of clean lending with a maximum limit of Tk. 500,000/- to a single borrower. Supplementary credit cards shall be considered part of the principal borrower for this purpose. The limits exceeding Tk. 500,000/- shall be secured appropriately by the banks. Corporate Card will not fall under this category and shall be regulated by exiting guideline/regulations for lending. For Charge Cards, pre-set spending limits generated by the standardized systems, as in the global practice, shall be allowed. Types of cards:-

There are four types of Credit Cards:

Sl 1 2 3 4 Types of cards Visa Domestic Classic (VDC) Visa Domestic Gold (VDG) Visa Domestic Gold (VDG) Visa International Classic (VIC) Limit 20,000 to less than 1.00 lac More than 1.00 lac to 5.00 lac SAARC country: US$1,500 Out of SAARC country: US $5,000 SAARC country: $1,500 Out of SAARC country: $5,000 Service Charge Tk. 500 plus 15% VAT Tk.1500 plus 15% VAT US $30 plus 15% VAT US $60 plus 15% VAT

FOR DEFENSE PERSONS:

I.

ANY PURPOSE LOAN:

Any purpose loan is a terminating facility offered by retail Banking Unit of the Bank for customizing the need of Defense Officer. This product is designed for confirmed defense officers having certain years of unexpired service with supporting cash flow to repay the loan installment. It is a secured Loan in the sense that defense officers have to take NOC from our Bank to get service benefits. ELIGIBILITY FOR ANY PURPOSE LOAN APPLIED BY THE DEFENSE OFFICER OF:

20

 Confirmed and active in service Defense Officers with 3 years of service ahead and having supportive cash flow to repay the installment. Maximum age limit of the borrower 21 yrs;

For Any Purpose Loan Loan Limit: Interest Rates (%) Down Payment / Equity Loan Period / Tenor Risk Fund

Tk 3.00 lac 13% N/A 1 2 years Nil

II.

HOUSE HOLD DURABLE SCHEME LOAN:

Household Durable Loan is a loan is designed to facilitate Defense Officers to purchase different household items such as Motorcycle, Television, Refrigerator, Air-Conditioners, Washing machine, Computers and other household furniture etc. for personal use. Under this scheme, the consumer durable product is hypothecated to the bank.

ELIGIBILITY FOR HOUSE HOLD DURABLE SCHEME LOAN: Any confirmed and active in service Defense Officers with 4 years of service ahead who have the means and capacity to repay bank loan. Maximum age limit of the borrower 21 yrs;
For House Hold Durable Scheme Loan Loan Limit: Tk. 5.00 lac Interest Rates (%) 13 % Down Payment / Equity 20% Loan Period / Tenor 1 3 years Risk Fund Nil

III.

CAR LOAN:

Car loan is a terminating credit facility designed to facilitate active in service Defense Officers to purchase a car for their personal usage. Under this scheme, the vehicle is hypothecated to bank only. In addition to this registration requirement, the loan is also partially secured by the commonly acceptable form available in the market as hypothecation. ELIGIBILITY FOR NEW AND RECONDITIONED CAR LOAN: 21

 Any confirmed and active in service Defense Officers who have the means and capacity to repay bank loan Maximum age limit of the borrower 21 yrs

For New & Reconditioned Car Loan Limit: Interest Rates (%) Down Payment / Equity Loan Period / Tenor Risk Fund

80% of the vehicle price but no exceeding Tk. 12 lac 13%(New) 20% 1 5 years Nil

IV.

APON NIBASH LOAN :

TBL offers Apon Nibash Loan (House Finance) to you with easy repayment schedule matching your affordability. You have unlimited options of choosing your home with limited means and standing. Here, TBL Apon Nibash Loan helps you to match your long cherished dream.

ELIGIBILITY FOR APON NIBASH LOAN : IN SERVICE: Officers who have completed 18 years of active service will be entitled to the facility up to the last day of service (excluding LPR) which means that the branch has to receive loan application up to the last day of active service.

RETIRED: Retired Defense Officers who have allotment of plot in DOHS will be eligible to apply for the loan facility.
For Apon Nibash Loan Loan Limit: Tk.upto 55.00 lac Interest Rates (%) 11% Loan Period / Tenor Up to 15 years Risk Fund Nil

22

V.

EDUCATION LOAN:

Education Loan is a credit facility designed for Defense Officers to facilitates financial needs for higher education for him / her or family members. This is an unsecured loan because no additional security is arranged against this loan. ELIGIBILITY FOR EDUCATION LOAN : Confirmed and active in service Defense Officers with 6 years of service ahead and having supportive cash flow to repay the loan installment. Maximum age limit of the borrower 21 yrs.

For Education Loan Loan Limit: Interest Rates (%) Down Payment / Equity Loan Period / Tenor Risk Fund

Tk. 5.00 lac 13% 10% 1 5 years Nil

3.7 UP COMING PRODUCT OF RETAIL BANKING UNIT

ON THE

TRUST BANK LIMITED:

There are some upcoming products in retail banking unit on the Trust Bank limited, these are given below:1. Trust Echo 2. Trust Assurance Deposit Scheme (TADS) 3. Trust Maxmill Deposit Scheme 4. Trust Porua Account 5. Trust Sristi 6. TRUST THIKANA(HOME LOAN)

3.8 LOAN DISBURSEMENT PROCESS 23

According to Prudential Guideline for Consumer financing of Bangladesh Bank, Loan Administration dept will disburse the loan amounts under loan facilities only when all security documentation is in place. CIB report is obtained, as appropriate, and clean. Strict security controls over the storage of blank cards, the embossing of blank cards and dispatch of cards to holders is essential. There must be procedures for evaluating, authorizing and monitoring credit card facilities that are at least as stringent as those of normal loans.

3.8.1 LOAN DOCUMENTATION & PREPARATION OF CHECKLIST:

Loan documentation is basically a post sanction & pre-disbursement process that involves compliance with sanctioned terms and conditions which is done at the branch level. Documentation against all types of credit facilities is important as through the process, the borrower empowers the bank to exercise some privileges in case of any irregularity against the credit facility the borrower has been sanctioned. Proper loan documentation is mandatory for a bank to secure its credit portfolio.

3.8.2 DOCUMENTATION PROCESS:

i. Must be completed in compliance with sanctioned terms and condition prior to disbursement for establishment of rights or creation of charges on securities as approved. ii. It is completed in according with the nature of securities by creating proper charges. iii. Bank can not be able to exercise its rights on securities in case of adverse situation. iv. No disbursed unless documentation is completed.

3.8.3 PREPARATION OF CHECKLIST:

Upon completion of all documentation process, the branch is required to obtain disbursement order from Head office providing information regarding documentation status. The branch can prepared a checklist and sent it to the head office to understand easily the documentation status and takes the decision regarding disbursement. The checklist provided by Head Office contains the following information:-

General

Credit Application of the borrower, unconditional acceptance of sanction letter, D.P 24

Documents

Note, Letter of Disbursement, Letter of Arrangement or agreement, Letter of Undertaking, Letter of installments, Letter of continuity, Letter of Revival. Lawyers opinion, approved plan & NOC of the concerned authority, NEC along with search fee paid receipt. Mortgage Deed duty registered with District or subregistry office, Registered IGPA to sale the mortgaged property, personal guarantee of the owner as mortgagor etc Letter of Hypothecation, IGPA to sell the hypothecated goods etc. Letter of Pledge, IGPA to sell the pledged goods etc. Assignment of bills by way of obtaining IGPA, Letter of Acceptance from the issuing authority etc. Letter of Lien, Letter of Authority of encash, Lien Confirmation from issuing authority etc. Letter of Authority to debit Current Account / Savings Account / Loan account. Deed of Hypothecation & mortgage for creation of charge, PPSSA duty singed by all lenders, Charge creation certificate from RJSC etc. Facility Agreement, ESCROW Account Agreement, Deed of Floating charge on the balance for ESCROW Account, Agreement for Assignments (Insurance), Project fund & share retention agreement, Subordination Agreement, Loan Agreement. Copy of comprehensive insurance policy in the banks name, original insurance premium paid receipt, Insurance cover note etc. No liability with any other bank excepting as declared , deposit of sales proceeds etc. All partners / directors, spouse, third party counter guarantee, corporate guarantee etc. Letter of Trust Receipt, Hire purchase agreement, NOC from other bank, Lawyers satisfaction certificate on complete documentation, lien on valid export L/C, post / undated cheque etc.

Mortgage

Hypothecation Pledge Assignment Lien Set Off Fixed / Floating Charge Syndication

Insurance Policy Undertaking Guarantee Other Documents

3.9 Charge Documents for Retail Unit

Following charge documents are compulsory while giving loans: 1. LETTER OF GUARANTEE This is a document given by the proprietor, directors or the third party in favor of the principal debtor. The beneficiary of this document is the bank. Surety is bound to pay the guaranteed amount if such situation arises. 2. COUNTER GUARANTEE

25

The principal debtor agreeing that if the guarantor pays any amount, the principal debtor is bound to pay this amount gives this guarantee. 3. LETTER OF AUTHORITY BY this letter, the principal debtor gives the authority to the bank to debit the current account or investment account of the principal debtor for the following cases: i. ii. iii. iv. Wages of the godown keeper and godown guard. Rent of the godown. Insurance premium and Any other expenses regarding these functions.

4. LETTER OF RECALL THE LOAN This letter is given to the bank by the borrower, giving the bank the right of recalling the loan amount at any time if the borrower fails to repay any one of the installments. And the borrower cannot protest such recalling. 5. LETTER OF CONTINUITY By this letter, the borrower agrees that the promissory note given by the bank will be act as security for the repayment of the ultimate balance or sum remaining unpaid on account of the overdraft or advance. 6. LETTER OF REVIVAL By this letter, the borrower agrees that he will be liable to bank for payment of the promissory note with interest in respect of all present and future indebtedness liabilities secured thereby which promissory note is to remain in force with all relative securities, agreements and obligations. 7. JOINT PROMISSORY NOTE This promissory note is given to the bank by the borrower if the borrowers are more than one person. 8. SINGLE PROMISSORY NOTE The borrower to the bank gives this promissory note if the borrower is a single person. 26

9. LETTER OF UNDERTAKING This document is given to the banker by the borrower acknowledging the right to cancel the facility at any time with or without intimation to the borrower. 10. LOAN DISBURSEMENT LETTER By this letter, the borrower request to disburse the loan sanctioned in his favor by the bank. All the persons, in whose names the account is opened, should sign the letter. 11. MEMORANDUM OF DEPOSIT OF TITLE DEEDS It is a deed that is necessary in case of mortgage by deposit of title deed or equitable mortgage. Here the mortgagor agrees that he has deposited necessary documents of the property to the bank.

12. HYPOTHECATION OF GOODS TO SECURED A DEMAND CASH CREDIT OR OD OR LOAN ACCOUNT Here the amount of loan, interest, and the name of the borrowers are written. Here the bank and the borrowers agree on the following terms:

Security Balance due to the bank Borrowers not to the encumber or parts of the goods Sale Inspection Insurance Margin Interest rate Repayment Sale of goods Deficiency Surplus Statement of account Continuing security
27

 Title Saving Change of borrowers and Notices.

13. GUARANTEE BY THIRD PARTY Sometimes third party guarantee is needed for allowing loan. Here third party gives the guarantee that of the principal debtor fails to repay the loan, and then the guarantor will be bound to repay the loan to bank. 14. HYPOTHECATION OF VEHICLE This document is necessary in case of transport loan. Here the borrower hypothecated the vehicle to the bank. In case of failure of repay the loan, bank will sell the vehicle to collect the money.

15. INFORMATION ABOUT THE LOAN CUSTOMERS The bank relies principally on outside information to assess the character, financial position, and collateral of a loan customer. Such an analysis begins with a review of information supplied by the borrower in the loan application. The bank may contact other lenders to determine their experiences with this customer regarding the following information: Were all scheduled payments in previous loan agreements made on time? Were deposit balances kept at high enough levels? How much was borrowed previously and how well were those earlier loans handled? Is there any evidence of slow or delinquent payments? Has the customer ever declared bankruptcy?

16. SOURCES OF INFORMATION ABOUT THE LOAN CUSTOMERS Physical Investigations Customer financial statements Experience of other lenders with this customer 28

Customer Annual Report Local or regional credit bureaus Local Newspapers Local chamber of commerce

3.10 MECHANISM OF RETAIL DISBURSEMENT OF TBL The primary factor determining the quality of the banks credit portfolio is the ability of each borrower to honour, on a timely basis. All credit comities made to the bank. The authorizing credit personnel prior to credit approval must accurately determine this. If the report of the project appraisal is very satisfactory to approve the loan proposal, than the following steps furnish the approval procedure: Make a proposal by the client to the bank Give all the necessary documents Bank will send the parties statement to the Bangladesh Bank, their CIB (Credit Information Bureau) will inquiry that whether this party is defaulter or a new one. Bank will take the collateral from the party and analysis that how much it will cover the total loans. Bank will send this proposal to the head office. In the head office the Board of Directors and Managing Director will approve the loan. Head office will send the approval to the branch office. Branch office will give the sanction letter to the party. Bank will take the security and make it in their favour.

3.10.1 DISBURSEMENT:
After completing all the necessary steps for sanctioning loans bank will create a loan account by the name of the party and deposit the money to that account. Bank will give chequebooks to the party and advise 29

them to draw the money and use it as soon as possible, because whenever the money will transfer to the account interest will count from that time.

3.10.2 LOAN DISBURSEMENT OF TRUST BANK LIMITED:

Here we try to find out the periodical, sector wise and industry wise loan distribution of the bank. Years 2008 2009 2010 Total Loan(retail unit) Amounts 8776500000 1114160000 10041630000

Figure: Total Retail Loan during the year 2008 2010

3.11 LOAN PRICING METHOD USED BY TBL In pricing a business loan, Bank management must consider the cost of raising loan able funds and the operating costs of running the Bank. This means that Banks must know what their costs are in order to consistently make profitable, correctly priced loans of any type. There is no substitute for a well-designed management information system when it comes to pricing loans. The Trust Bank Limited is generally used the simplest loan-pricing model which assumes that the rate of interest charged on any loan includes four components, these are (1) The cost to the Bank of raising adequate funds to lend, (2) The Banks non-funds operating costs (including wages and salaries of loan personnel and the cost of materials and physical facilities used in granting and administering a loan), (3) Necessary compensation paid to the Bank for the degree of default risk inherent in a loan request, 30

(4) Banks desired profit margin.

3.11.1 RATE OF INTEREST OF TBL FOR LENDING

These sector-wise interest rates have been introduced by the Head Office of the Trust Bank Limited. They use cost-plus pricing method in case of pricing the loans. All branches of the Trust Bank Limited have maintained these rates strictly except in case of some quality and credit-worthy lenders. After judging the lenders credit-worthiness, the Trust Bank Limited gives some beneficiary to this kind of lenders. They can enjoy a decreasing interest rate, which maintained by the Trust Bank Limiteds branches internally. Other wise, the scheduled rates are maintained by all the TBL branches. Actually, the Lending rate is based on the prescription, which is given by Bangladesh Bank.

3.11.2 RATE OF PROVISION

The summery of rate of provision for different types of classified and unclassified loans & advances:
Rate of Provision Particulars Standard loan Special Mentioned Account Substandard loan Doubtful loan Bad/Loss loan Rate of Provisioning (%) 5% 20% 30% 50% 100%

3.12 RETAIL PRODUCT FEATURES OF TRUST BANK LIMITED Product

Any Purpose Loan Car Loan

Name of the Item

Salaried Person New Vehicle Recondition Vehicle Bus/Truck for Corp. Bodies

Loan Limit
TK. 5,00,000 TK. 20,00,000/TK. 20,00,000/TK. 50,00,000/TK. 5,00,000/TK. 75,00,000/-

Down Payment
Nil 20% 20% 20% 30% 40% for under construction & 30% for Purchase of New Apartment

Rate of Interest
17% 15% 16% 16% 17% 13%

Period of Loan
4 Years 5 Years 5 Years 5 Years 4 Years 20 Years

House Hold Durables Apon Nibash Loan

Salaried Person/Businessman Salaried Person/Businessman

31

Doctors Loan

General Practitioner MBBS/BDS Specialized Doctor

TK. 5,00,000/TK. 10,00,000/TK. 3,00,000/TK. 3,00,000/TK. 3,00,000/TK. 3,00,000/-

Nil Nil 20% 10% 20% 10%

17% 17% 17% 17% 17% 15%

5 Years 5 Years 3 Years 3 Years 2 Years 2 Years

Marriage Loan Education Loan Travel Loan Hospitalization Loan

Salaried Person/Businessman Salaried Person/Businessman Salaried Person/Businessman Service holders, Businessman, Professionals

This questionnaire surveyed in Mirpur area of Dhaka city. Table: 1 Gender

Frequency Percent Valid Percent Cumulative Percent 52.0 100.0

Valid

Male Female Total

26 24 50

52.0 48.0 100.0

52.0 48.0 100.0

Elucidation: It shows that, 26 (52%) respondents are male, 24 (48%) respondents are female. So, it has shown that most of the respondents are male from the Retail banking customers of Trust Bank Limited (TBL), Mirpur Branch.

32

Table: 2 Ages
Frequenc y Valid 25-34 35-44 45-54 55 or above Total 3 13 18 16 Percent Valid Percent 6.0 26.0 36.0 32.0 Cumulative Percent 6.0 32.0 68.0 100.0

6.0 26.0 36.0 32.0

50

100.0

100.0

Elucidation: It shows that, 3 (6%) respondents age between 25-34 years, 13 (26%) respondents age between 35-44 years, 18 (36%) respondents age between 45-54 years, and 16 (32%) respondents age 55 or above from the Retail banking customers of Trust Bank Limited (TBL), Mirpur Branch.

Table: 3 Occupations
Frequency Percent Valid Percent 72.0 28.0 100.0 Cumulative Percent 72.0 100.0

Valid

service others Total

36 14 50

72.0 28.0 100.0

Elucidation: It shows that, from the Retail banking customers of Trust Bank Limited (TBL), 36 (72%) are service holder and 14 (28%) respondents are others like businessman. 33

Table: 4 Loan disbursement process

Frequenc y Valid Below average Average Good Very good Excellent Total 6 Percent Valid Percent 12.0 Cumulative Percent 12.0

12.0

19 14 8 3 50

38.0 28.0 16.0 6.0 100.0

38.0 28.0 16.0 6.0 100.0

50.0 78.0 94.0 100.0

Elucidation: It shows that, 6 (12%) respondents thinks that Loan disbursement process is not good i.e, below average, 19 (38.0%) respondents thinks that Loan disbursement process is Average, 14 (28%) respondents thinks that Loan disbursement process is Good, 8 (16%) respondents thinks that Loan disbursement process is Very good, 3 (6%) respondents thinks that Loan disbursement process is Excellent.

Table: 5 Type of loans you have taken from TBL

Frequenc y Valid Any Purpose Loan Car Loan House Hold Durables Apon Nibash Loan Doctors Loan 15 9 5 Percent Valid Percent 30.0 18.0 10.0 Cumulative Percent 30.0 48.0 58.0

30.0 18.0 10.0

9 4

18.0 8.0

18.0 8.0

76.0 84.0 34

Marriage Loan Education Loan Total

5 3 50

10.0 6.0 100.0

10.0 6.0 100.0

94.0 100.0

Elucidation: It shows that, 15 (30%) respondents taken Any Purpose Loan, 9 (18%) respondents taken car loan, 5 (10%) respondents taken House Hold Durables loan, 9 (18%) respondents taken Apon Nibash Loan, 4 (8%) respondents taken Doctors Loan loan, 5 (10%) respondents taken Marriage Loan, 3 (6%) respondents taken Education Loan.

Table: 6 Reasons for Nonperforming loans

Frequency Percent Valid Percent 28.0 22.0 Cumulative Percent 28.0 50.0

Valid

High interest Slow disbursement process Not fulfillment of demand loan amount Critical documentation process Total

14 11

28.0 22.0

20

40.0

40.0

90.0

10.0

10.0

100.0

50

100.0

100.0

Elucidation: It shows that, the 14 (28%) respondents say that high interest is the reasons for non-performing loans in Trust Bank Limited, 11 (22%) respondents say that Slow disbursement process, 5 (10%) respondents say that Not fulfillment of demand loan amount, 9 (18%) respondents say that Critical documentation process. 35

Table: 7 Reason for choosing this bank

Frequenc y Valid Brand name Market condition Location Reference group Total 13 13 Percent Valid Percent 26.0 26.0 Cumulative Percent 26.0 52.0

26.0 26.0

15 9

30.0 18.0

30.0 18.0

82.0 100.0

50

100.0

100.0

Elucidation: It shows that, from the reasons of choosing Trust Bank Limited 13 (26%) respondents select Brand name, 13 (26%) respondents select Market condition, 15 (30%) respondents select Location, 9 (18%) respondents select Reference group.

Table: 8 Age * loan Crosstabulation Count loan Any Purpose Loan 1 5 6 3 15 Car Loan 0 2 4 3 9 House Hold Durables 1 2 1 1 5 Apon Nibash Loan 1 2 3 3 9 Doctors Loan 0 0 4 0 4 Marriage Loan 0 2 0 3 5 Education Loan 0 0 0 3 3 36 3 13 18 16 50 Total

Age

25-34 35-44 45-54 55 or above Total

Elucidation: It shows that, from the Age * loan Crosstabulation of Trust Bank Limited in age 25-34 total loan is 3, in age 35-44 total loan is 13, in 45-54 age total loan is 18 and in age 55 or above total loan is 16. So, ages between 45-54 are taking more loans from TBL.

Descriptive Statistics
Table: 9 One-Sample Test Test Value = 0 df Sig. (2Mean tailed) Difference 49 49 .000 .000 3.48000 3.42000

The availability of retail product Delivery of your specific product on required time Perception about documentation process for getting your product from Trust Bank Ltd. Perception about the Interest rate of your product taken from Trust Bank Ltd. Perception about the after sale service of specific loan

29.334 28.143

95% Confidence Interval of the Difference Lower Upper 3.2416 3.7184 3.1758 3.6642

27.829

49

.000

3.26000

3.0246

3.4954

24.432

49

.000

3.26000

2.9919

3.5281

24.436

49

.000

3.04000

2.7900

3.2900

37

Perception about the processing fee to get the loan Perception about the promotional campaign about retail banking Solution of any complaint related to retail banking product Are you satisfied with the entire product of retail banking unit

21.087

49

.000

2.78000

2.5151

3.0449

18.582

49

.000

2.36000

2.1048

2.6152

19.694

49

.000

2.38000

2.1371

2.6229

16.600

49

.000

2.36000

2.0743

2.6457

Elucidation: The t-value in 5% significance level shows that customers perceptions towards all of the factors are significant.

Table: 10 Customers satisfaction Level

N Minimum Maximum Mean Std. Deviation .83885 .85928

The availability of retail product Delivery of your specific product on required time Perception about documentation process for getting your product from Trust Bank Ltd. Perception about the Interest rate of your product taken from Trust Bank Ltd. Perception about the after sale service of

50 50

2.00 2.00

5.00 5.00

3.4800 3.4200

50 50

2.00 1.00

5.00 5.00

3.2600 3.2600

.82833 .94351

50

1.00

5.00

3.0400

.87970 38

specific loan Perception about the processing fee to get the loan Perception about the promotional campaign about retail banking Solution of any complaint related to retail banking product Are you satisfied with the entire product of retail banking unit Valid N (listwise) 50 1.00 5.00 2.7800 .93219

50

1.00

4.00

2.3600

.89807

50

1.00

5.00

2.3800

.85452

50

1.00

5.00

3.0400

1.26103

50

From this table,

I. The availability of retail product: It is in satisfaction level because it scored more than 3 (4.00). II. III. Delivery of your specific product on required time: It scored 3.42 which mean that the perception about delivery of your specific product on required time is satisfactory. Perception about documentation process for getting your product from Trust Bank Ltd.: It scored 3.26, which means that the Perception about documentation process for getting your product from Trust Bank Ltd is satisfied. IV. Perception about the Interest rate of product taken from Trust Bank Ltd.: Perception about the Interest rate of product taken from Trust Bank Ltd. is positive because it scored 3.26 that they are quietly satisfied. V. VI. Perception about the after sale service of specific loan: Perception about the after sale service of specific loan is positive because it scored 3.06. This shows positive. Perception about the processing fee to get the loan: It shows that the respondents are mostly dissatisfied about the processing fee to get the loan because it scored 2.78 which determine the negative side. VII. Perception about the promotional campaign of retail banking: It scored 2.36, which shows that most of the respondents are dissatisfied about the promotional campaign of retail banking. 39

VIII. IX. unit.

Solution of any complaint related to retail banking product: Solution of any complaint related to retail banking product is in dissatisfactory level. It scored 2.38. Satisfaction with the entire procedure of retail banking unit: It scored 3.04, which shows that most of the respondents are dissatisfied about the entire procedure of retail banking

According to processing fee to get the loan, promotional campaign of retail banking, Solution of any complaint, these three sectors scored less than 3.0, which show that company needs to recover on these sectors to satisfy customers. But availability of retail product and delivery of specific product on required time makes customers highly satisfied, because it scored 3.48 & 3.42 which are more than 3.0.

Major Findings

Major findings by questionnaire analysis

Most of the Retail banking customers of Trust Bank Limited are service holder Loan disbursement process of Trust Bank Ltd. is not so good Any purpose loan taken most by the customers of Trust Bank Ltd. Not fulfillment of demand loan amount is the common reason for Nonperforming loans. The availability of retail product of Trust Bank Ltd. is pleasing. Delivery of specific product on required time is satisfactory. Perception about the processing fee to get the loan from Trust Bank Ltd. is not reasonable. Promotional campaign of retail banking is not up to mark. Solution of any complaint related to retail banking product is not satisfactory. Most of the Retail banking customers are satisfied with the entire procedure of retail banking unit of Trust Bank Limited

40

Recommendation

Recommendation by questionnaire analysis

Trust Bank Ltd. should undertake competitive pricing policy to make its Retail products more attractive. Promotional campaign of retail banking should be increased through Trust Bank Ltd. Trust Bank Ltd. has to provide Solution of any complaint from customers as first as possible. They have to offer more variety of products to the customers. Documentation process should be easier.

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Conclusion

There are a number of Private Commercial Banks, Nationalized Commercial Banks and foreign Banks operating their activities in Bangladesh. Trust Bank Ltd. is one of the private commercial scheduled banks. For the future planning and the successful operation for achieving its prime goal in this current competitive environment this report can be helpful guideline. To plunk on the competitive environment of banking sector TBL can give reward to those officers for their good achievement and it will increase their interest and motivation in work, pricing guidelines on Retail Banking should be upgraded on regular basis. These will also help the bank to assemble more profit. Surely TBL will achieve superior position in our banking industry but to cope with customer TBL should think how to make it services proactive. Banks always contribute towards the economic development of a country. Compared with other Banks TBL is contributing more by investing most of its funds in fruitful projects leading to increase in production of the country. It is obvious that right channel of Banking establish a successful network over the country and Increases resources; will be able to play a considerable role in the portfolio of development in developing country like ours.

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As a leading bank of Bangladesh, TBL contributes in the business with promising future. I can hope that TBL can spread their business with increasing various retail proposal and other exceptional services.

Reference o Books:
Naresh K. Malhotra, 5th Edition, Marketing Researchs

o Bank Publications:
Annual Report of TBL year 2010

o Website:
www.trustbank.com.bd en.wikipedia.org www.google.com

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APPENDIX QUESTIONNAIRE
Dear Respondent, As a student of Bangladesh University of Business & Technology (BUBT), Doing B.B.A (Bachelor of Business & Administration) specializing in Marketing. My assigned topic is Customer perception towards Retail banking of Trust Bank Limited (TBL), Mirpur Branch. So I would like to request you to kindly spare a few minutes from your busy schedule to fill up the questionnaire and make research a fruit full one. I assure you that information will be used only for this report. Your kind co-operation will be highly appreciated.

About respondent: Personal information 1. Name 2. Living area 3. Gender : : : o Male

44

o Female. 4. How old are you?

o Under 18 o 18-24 o 25-34 o 35-44 o 45-54 o 55 or above 6. Occupation : .

Information about Retail banking of Trust Bank Limited (TBL), Mirpur Branch.
Please read carefully the questions and just put a tick mark () in the respective number and kindly give response where necessary. 1. Do you have any loan from Trust Bank Limited? o Yes o No 02. What do you think about the loan disbursement process of that Trust Bank Limited? o o o o o Below average Average Good Very good Excellent

03. What type of loan you have taken from Trust Bank Limited? o o o o o o o Any Purpose Loan Car Loan House Hold Durables Apon Nibash Loan Doctors Loan Marriage Loan Education Loan 45

o o

Travel Loan Hospitalization Loan

04. What are the reasons of non-performing loans in Trust Bank Limited? o o o o High interest Slow disbursement process Not fulfillment of demand loan amount Critical documentation process

05. Reason for choosing this bank: o o o o Brand name Market condition Location Reference group

Please rate the followings

(Strongly Satisfied-5, Satisfied-4, Neutral-3, Dissatisfied-2, Strongly Dissatisfied-1)

Determination of satisfaction level

The availability of retail product Delivery of your specific product on required time Perception about documentation process for getting your product from Trust Bank Ltd. Perception about the Interest rate of your product taken from Trust Bank Ltd. Perception about the after sale service of specific loan Perception about the processing fee to get the loan Perception about the promotional campaign about retail banking

46

Solution of any complaint related to retail banking product Are you satisfied with the entire product of retail banking unit

Please provide your valuable suggestion for Retail Banking product of Trust Bank Ltd.

Thanks for your kind co-ordination.

47