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Jatiya Kabi Kazi Nazrul Islam University

Trishal, Mymensingh

Course Title: Research Methodology Course Code: 403


Dutch Bangla Bank Limited & HSBC Products Life Line A comparative study on the loan
Evaluator: Shakhawat Hossain Sarkar Lecturer, Dept. of Accounting & Information Systems, Jatiya Kabi Kazi Nazrul Islam University.


ID NO. : 08132536 SESSION: 2007-08 DEPTRTMENT OF AIS J.K.K.N.I.U

Date of Submission: 23rd October, 2012.

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Table of Contents

1. Abstract

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2. Introduction

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3. Source of Data and Methodology

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a) Primary data:

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b) Secondary data:

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4. Research Output & Findings:

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5. Conclusion:

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6. Reference:

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A comparative study on the loan Products Life Line Dutch Bangla Bank Limited & HSBC
1. Abstract:

There is possibly nothing more important to a bank than the loans they make. Loans are the way a bank makes money. When loans go bad, it can be fatal to a bank. Loans are the lifeblood of a bank. All businesses sell products, and a bank's product is money. Banks make money by taking in funds from depositors and other sources and then lending money out to customers. The bank spread is the difference between what the interest a bank must pay to obtain the funds and the rate the bank charges on the loan. For example, a bank might pay two percent interest to a depositor and charge a customer six percent interest on a loan. The four percentage points are the bank's spread, and its profit. The project is based on the critical observation; the project reveals the various types of loan scheme and the reason to get the loan. Then, Ill try to compare the schemes with that of HSBC bank. Based on the analysis, the report made some recommendations. To sustain in the highly competitive market, DBBL has been endeavoring to come up with new products which are essential for individual and family life. Life line is not an exception. This is a product category specially designed to meet up the need of everyday life. The life line products can be divided into two parts, namely clean credit line- without any securityand secured credit lines-with minimum security. The report analyzes these products with that of HSBC.

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2. Introduction:
With the focus of providing one counter service to clients, Dutch Bangla Bank Limited (DBBL) has its journey. Dutch-Bangla Bank is a second generation commercial private Bank. The Bank commenced Dutch-Bangla Bank Limited is a scheduled commercial bank. The Bank was established under the Bank Companies Act 1991 and incorporated as a public limited company under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. DBBL- a Bangladesh European private joint venture scheduled commercial bank commenced formal operation from June 3, 1996. The head office of the Bank is located at Senakalyan Bhaban (4th floor), 195, Motijheel C/A, Dhaka, Bangladesh. The Bank commenced its banking business with one branch on 4 July 1996. Dutch Bangla Bank Limited (DBBL) a public company limited by shares, incorporated in Bangladesh in the year 1995 under companies Act 1994. With 30% equity holding, the Netherlands Development Finance company (FMO) of the Netherlands is the international cosponsor of the Bank. Out of the rest 70%, 60% equity has been provided by prominent local entrepreneurs and industrialists & the rest 10% shares is the public issue. During the initial operating year (1996-1997) the bank received skill augmentation technical assistance from ABN (Amro Bank of the Netherlands). Its banking business with one branch on July 4, 1996. HSBC (Hong Kong Shanghai Banking Corporation) started operations in 1996. The bank primarily focuses on urban areas and has branches in most areas of the capital city of Dhaka; it also has branches in the cities of Chittagong and Sylhet. The bank also has a good number of ATM booths in the cities present; it also has booths in most five star hotels.*HSBC Bangladesh is rated AAA in the Long-term and ST-1 rating in the Short-term, which are the highest level of ratings for any bank or financial institution in Bangladesh. **HSBC Bangladesh offers a comprehensive range of financial services such as commercial banking, consumer banking, payments and cash management, trade services, treasury, and custody and clearing. The bank also offers offshore banking in the Export Processing Zones, this is only limited to investors in the EPZs. A special service called NRB Services is also available for nonresident Bangladeshis; this service allows consumers to maintain accounts in US Dollars, Pound Sterling and

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Euros. People using this service can freely remit money from Bangladesh to any part of the world and can access their money from any HSBC booth around the world. HSBC Bangladesh has a help center which operates on daily basics. It is one of the very few banks in the country to offer day night banking. HSBC's global Islamic banking system called Amanah is available in Bangladesh. *** There is a special branch dedicated just for this service. Under this service customers can also avail debit and credit cards. To sustain in the highly competitive market, DBBL has been endeavoring to come up with new products which are essential for individual and family life. Life line is not an exception. This is a product category specially designed to meet up the need of everyday life. DBBL considers the product line in the following way: A complete series of personal credit facilities to add more color in every step of your life The life line products can be divided into two parts, namely clean credit line and secured credit lines. In here it will be compared with the loan products of DBBL & HSBC.

3. Source of Data and Methodology:

For preparing this paper, I used both Primary and Secondary data. a) Primary data: Most of the necessary information has been collected by the personal observation and one to one discussion with the relevant officials. The relevant data will be collected from the DBBL, Mymensingh Branch and HSBC, Dhanmondi Branch. b) Secondary data: The details of the bank and the selected department have been collected from secondary sources. The relevant information of other private banks has been collected from annual reports, web pages and other published documents.

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4. Research Output & Findings:

Dutch-Bangla Bank Limited (DBBL) & Hong Kong Shanghai Banking Corporation (HSBC) plays a very significant role in not only Bangladeshi Banking sector but also International Banking sector. By developing its load department it can go fast to its target views. By comparison between DBBL & HSBC, it will be find that1. 2. 3. 4. 5. 6. 7. 8. 9. The total loan systems of those banks; The loan types of those banks; The comparison of interest rate of those banks; Risk involved in the loans; Industry interest rate versus Life Line rate; Way of market capturing; Extra facilities for the loan receivers; Time limitations of that loan period; Conditions for loan receive;

5. Conclusion:
Dutch-Bangla Bank Limited (DBBL) is one of the most potential Banks in the banking sector. It has a large range with huge assets to meet up its liabilities and management of this bank is equipped with the export bankers and managers in all level of management. So it is not an easy job to find out the drawbacks of this branch. It has been observed that DBBL started its banking services with a view to minimize the customers needs by offering different products and services which are easy and affordable for all level of customers. To that extent, DBBL always emphasizes its customer services, product development, resource

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management, branch networking and the contribution to the economic development of the country. The bank also provides social services through DBBF as their social responsibility. The success of a bank depends on the quality of the services it offers. All the commercial banks, therefore, try to provide quality services with competitive interest rates. DBBL is not an exception. Life line package has been developed with the same purpose. Although, the comparative analysis shows that DBBL is in better position, but there are some obstacles it faces to sustain the position. However, the continuous improvement of the services will certainly place the bank in the best position in one decade.

6. Reference: _Corporation BB Prudential Regulations for Consumer Financing, under section Definition point 5