SAMPLE CASE STUDIES – PGDBA(CRM

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Case Study 1

Details to Follow
Headquartered in London, the London Paris Banking Corporation (LPBC) is one of the largest banking and financial services organization in the world. LPBC's international network comprises over 10,000 offices in 83 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. LPBC’s private banking is about delivering sophisticated solutions to complex financial problems, seeing customer’s affairs in totality and offering individual advice and tailored solutions. The Uniform Customs and Practice for Documentary Credits (UCP) are the most successful private rules for trade ever developed. Bankers, traders, lawyers, transporters, academics and all who deal with letter of credit (LC) transactions worldwide, including LPBC will refer to UCP 600. Foreign banks are likely to succeed in their niche markets and be the innovators in terms of technology introduction in the Indian domestic market scenario. The outlook for the private sector banks indeed looks to be more promising vis-à-vis other banks. While their focused operations lower but more productive employee force etc will stand them good, possible acquisitions of PSU banks will definitely give them the much needed scale of operations and access to lower cost of funds. These banks will continue to be the early technology adopters in the industry, thus increasing their efficiencies. Also, they have been amongst the first movers in the lucrative insurance segment. Already, banks such as ICICI Bank and HDFC Bank have forged alliances with Prudential Life and Standard Life respectively. This is one segment that is likely to witness a greater deal of action in the future. In the near term, the low interest rate scenario is likely to affect the spreads of majors. This is likely to result in a greater focus on better asset-liability management procedures. Consequently, only banks that strive hard to increase their share of fee-based revenues are likely to do better in the future. LPBC bank is also part of stiff competition for luring Indian customers. It has estimated properly the growing Indian banking market and made its entry to Indian banking market at the proper time. It opened its branches at all the major Indian cities like Mumbai, Pune, Nagpur, Kolkata, Delhi, Hyderabad, Bangalore, Chennai etc.

Prakash Kumar. Suresh Chandra for modification of pre advice? How Mr. In the absence of words “Details to follow”. Ltd.LPBC camp branch is a very dynamic. The importer Mr. the bank should send a pre-advice of LC by SWIFT message as under:“Opened LC No. Suresh Chandra was little unhappy for modification of preadvice.Prakash Kumar accepted immediately first request of Mr. proactive branch since beginning. USA Covering: Titanium Plates However.Suresh Chandra with a request to open an Import LC.Prakash Kumar –Branch Manager LPBC bank. The LC was sanctioned by an appropriate authority and the importer Mr. Mr. Suresh Chandra for opening of Letter of Credit? What was the sanction condition for opening of Letter of Credit? What was the second request made by Mr.00 Applicant: Sharmila Enterprises Pvt. Suresh Chandra? What is the key issue involved in the above case? . Prakash Kumar –Branch Manager LPBC bank. Although the importer Mr.Suresh Chandra required some time to comply with the sanction conditions like depositing of margin money etc. Suresh Chandra requested Mr. camp branch Pune modified the pre-advice by incorporating the words “Details to Follow” so that pre-advice does not become LC under UCP 600.185/2008 on 24th April. was approached by their client Mr. New York.Branch Manager LPBC handled unhappiness of his client Mr. Suresh Chandra? What was the reason for modification of pre advice by incorporating the words “Details to follow”? What was the reaction of Mr. Pune Camp branch that though the bank can not open LC until sanction terms are compiled with . Questions 1) 2) 3) 4) 5) 6) 7) Why Mr. Mr. Pune. Its presence is felt by all leading banks in Pune city which lost heavily their customer base to LPBC in the last financial year. 2008 for US$ 500000. Beneficiary: Clarisa INC. Camp branch. beneficiary can treat pre-advice as LC and can present documents to the bank for negotiations and subsequent reimbursement. LPBC bank. Prakash Kumar the Branch Manager-LPBC bank convinced him the importance and adhering to standard working practices under Uniform Customs and Practices (UCP600).

Mr. the pre-advise can be treated as good as Letter of Credit and bank has no choice other than to accept all bills of exchange under the aforesaid pre-advise under Uniform Customs and Practices (UCP600) Mr. *** . Suresh Chandra for opening of Letter of Credit. unhappy customers may affect business potential of a company. is always trying to achieve a golden mean of the aforesaid issues. This cost is to be balanced equally by subsequent revenue from services given to a customer. this naked truth is to be dealt delicately to avoid customer confrontation in day to day operating practice. Customer satisfaction is to be given due importance at the same time standard working practices norms should also be observed. Suresh Chandra’s second request was that the bank should send a pre-advice of LC by SWIFT message to the advising bank. Thus customer relationship management exists only in the light of economic survival of an organisation. Depositing of margin money was the sanction conditions for opening of Letter of Credit. However. Many times. When organisational interests are in danger. a customer is treated as a king and there is a keen competition amongst employees to accept all sermons as Ten Commandments. Suresh Chandra was little unhappy for modification of pre-advice. Mr. Also proper guidance should be given to customer for better work performance. This may lead to financial losses to an organisation if it is not understood properly that each customer request adds to cost. 2) 3) 4) 5) 6) 7) General Comment This case is an example of a practical situation wherein a manager is facing dilemma for customer satisfaction against organisational interests. Prakash Kumar the Branch Manager-LPBC bank convinced him the importance and adhering to standard working practices under Uniform Customs and Practices (UCP600). manager has no choice other than to sacrifice customer satisfaction issues.Possible Solutions 1) Mr. Any negative deficit in the above means threat to economic survival of an organisation. Prakash Kumar was interested in developing bank’s business. If the word “Details to Follow” are omitted. in practice. In the long run. Hence he accepted immediately first request of Mr. A customer relations manager.

Roberts. Mr. There was no shipment made by Mr.Bank Vienna. 2008.Chief Manager-Bank Vienna. which were to be shipped from India. Bank Vienna-Austria observed following discrepancies: • • • • Containers numbers mentioned in export invoice were not matching with containers numbers as mentioned in Bill of Lading (BL) Price of goods was indicated in packing list Bill of Lading dates were prior to date of certificate of origin of goods. Thus Bank Vienna. 2007. This was the principle condition of Letter of Credit which was issued by Bank Vienna. "The award from 'Global Finance' acknowledges our employees' commitment and professionalism and reflects the fact that we are not only Austria's biggest bank. In case there is no shipment during any particular month. Mr. Roberts. Austria is a case of LC with specific condition." A letter of credit was opened by Mr. The export invoices for first two months were duly retired. Aloknath an Indian exporter for US$ 10 million for 500 tons. Bank Vienna’s CEO Fredic Tully says. Aloknath. Austria to Mr. the LC automatically expires as per provisions of UCP600. Letter of Credit opened by Mr. Chief Manager. each month from October 2007 to February 2008 and the export invoice for US$ 2 million were to be drawn for each month’s shipment. In the month of January. Austria as Austria's best bank. Austria. Aloknath. Aloknath. 2007. based on the results of its "The World’s Best Banks in Developed Markets" annual survey. Austria. Roberts-Chief Manager. an Indian exporter and no export invoice was raised during the month of December. .Somehow this important point was overlooked by the Indian exporter. covering 200 tons of goods from Mr. an export invoice for US$ 4 million was received by the opening bank. Austria was unable to honour export documents due to the above mentioned discrepancies in accordance with article 16 of Uniform Customs and Practice for Documentary Credits (UCP 600). Bank Vienna. There was no shipment and export invoice in the month of December.Case Study 2 Helping the customer American financial magazine "Global Finance" has chosen Bank Vienna. but also its best.

Roberts . Austria.Chief Manager. advised Mr. Aloknath? What was the reason for providing help by Mr. Aloknath? Possible Solutions 1) Letter of Credit was of US$ 10 million for 500 tons. Austria. Roberts . Following discrepancies in general observed by Mr. Further he coordinated export document acceptance activities with principal foreign client. Austria was unable to honor export documents due to the various discrepancies in accordance with article 16 of Uniform Customs and Practice for Documentary Credits (UCP 600). Questions 1) 2) 3) 4) 5) What was the principle condition of Letter of Credit? What were the discrepancies in general observed by Mr. the Indian negotiating bank to approach the foreign customer for export document acceptance and held the export documents at exporter’s risk and disposal. 2008. Mr. Aloknath approached his principal foreign client who arranged the acceptance of export documents in due course of time. Mr. Roberts –Chief Manager. Roberts to Mr. Aloknath the Indian exporter through SBI. Roberts helped Mr. 2) Mr. 4) . each month from October 2007 to February 2008 and the export invoice for US$ 2 million were to be drawn for each month’s shipment.However. Roberts in exports documents: a) b) c) d) 3) Containers numbers mentioned in export invoice were not matching with containers numbers as mentioned in Bill of Lading (BL) Price of goods was indicated in packing list Bill of Lading dates was prior to date of certificate of origin of goods. Further he coordinated export document acceptance activities with principal foreign client. Bank Vienna. Bank Vienna. Aloknath the Indian exporter through SBI. 2007. Roberts in exports documents? What was the effect of discrepancies? How Mr. was duly retired after securing document acceptance from the foreign customer with necessary discrepancies charges. which were to be shipped from India. advised the Mr. Accordingly Mr. The export invoice for the month of January. the Indian negotiating bank to approach the foreign customer for export document acceptance. There was no shipment and export invoice in the month of December. Bank Vienna.Chief Manager.

the Indian exporter. Aloknath. Roberts confirms that bank’s employees' commitment and professionalism and reflects the fact that this organisation is not only Austria's biggest bank. Thus. the Indian exporter properly to sort out document acceptance and payment problem. Mr.5) Mr. Instead of that he advised Mr. *** . but also its best. Roberts would have remained neutral and would have rejected export documents. the course of action of Mr. Aloknath. Roberts main intension was to increase business and not to use provisions given under UCP600 as a shield to avoid payment against export documents which were submitted by Mr. General Comments This case is an example of a proactive customer relationships manager who takes initiative to solve customer’s problems in view of long term good customer relations and possible increase in business. It cares truly for its customers. Helping customers may fetch good long term results.

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