1.

0 Introduction

CHAPTER ONE

Introduction
Internship is a system by which we can familiarize ourselves with the practical situation. Moreover we can bridge up the gap of the theoretical knowledge and practical situation. As an indispensable part of BBA program, I was placed in HSBC for completing my internship. I was rotated some desks of HSBC to learn their day to day activities.

1.1 Origin of the Report:

This report is a requirement of the internship program for my BBA program. My supervisor Mr. Shibli Shahriar aided me in this report. I have tried my level best to make it as an excellent one. I used all latest data and information. I have been survived in this bank as an intern under Customer Services Department for three months; starting from March 2010 to May 2010. I got the benefit to set the latest data regarding the banks activities and customer service. My job responsibility is to create relationship with our present and potential customers, sales personal financial products and provide service from time to time by giving latest products information. So, I was getting the opportunity to be very close to the customer. I have the idea why customers choose our bank, the

reason of leaving and the reason of staying with HSBC. My supervisor guides me from time to time to make this report fruitful.

1.2. Overview of the Company:

The HSBC Group, one of the worlds largest banking and financial services organization headquartered in the United Kingdom, had its beginnings in Asia more than 130 years ago. The Group has more than 8000 offices in 88 countries and territories in Europe, The AsiaPacific region, The Americas, the Middle-East and Africa. In

Bangladesh, its main office (head office) in Dhaka, a full-service branch in Chittagong and nine full-branches in Gulshan, Motijheel, Lalbagh and Dhanmondi, Uttara, Banani and Narayongonj, Mirpur, Sylhet, and Chittagong represent HSBC group.

1.3 Objective of the Report:

1.2. Objective:
The Objectives of the study are as follows: To describe an overview of the HSBC Bank To describe the products and services of HSBC Bank To describe the general banking activities such as the activities of accounts opening secretion, cash section etc of HSBC Bank Main Office. 3

To find out some problems of those activities. To make some recommendations to solve those problems.

1.3 Methodology of the Study:

To prepare the report both primary and secondary data are used. The primary data are collected from the officials of HSBC Bank. No structured questionnaire is used. Working with efferent sections as well as decision with the stuff of those sections provide a lot of primary information. Secondary Data are gathered from the annual reports, relevant published books. In specific sense the sources of information:

1. Primary Sources:
Employees of the bank Customer of the bank

2. Secondary Sources:
Relevant books, Newspapers etc HSBC annual report 2008-2009 Monthly report

Published documents Office circulars

Target Populations:
All employees and management level of HSBC, Main Branch.

Sample Size:
20 employees 15 Customers

Data collection method:

Convenience data were collected through direct and face to face interview.

1.6 Limitations of the Study:

The report work was basically based on interpreting primary data. Secondary data also needed for analyzing future plans, but for the purpose of the betterment of the present position of customer service. Though I tried my level best to produce a comprehensive and well organized report on the Customer Service Procedures of HSBC some limitations were yet present.

 Sometimes I was assigned to do some jobs without explaining why this works to be done. This situation has created a lot of problems to understand why a specific function is being performed. I had some limitation of getting some important actual data and information. Part on organizational culture was written from individuals perception and may vary from person to person.

In many cases, up to date information was not published. The information regarding the competitors is difficult to obtain. Many procedural matters were conducted directly in the operations by the top management level, which also gave some sort of restrictions. To protect the organizational loss in regard of maintaining confidentiality, some parts of the report are not in depth.

CHAPTER TWO
The Hong Kong and Shanghai Banking Corporation Ltd. (HSBC)

HSBC
2.1 Introduction:
Headquartered in London, HSBC Holdings plc is one of the largest banking and financial services organizations in the world. It began operations in Hong Kong more than 130 years ago. The HSBC Group's international network comprises some 8,000 offices in 88 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With listings on the London, Hong Kong, New York and Paris stock exchanges, around 200000 shareholders in some 100 countries and territories hold shares in HSBC Holdings plc. The shares are traded on the New York Stock Exchange in the form of American Depository Receipts. Through a global network linked by advanced technology, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services: personal, commercial, corporate, investment and private banking; trade services; cash management; treasury and capital markets services; insurance;

consumer and business finance; pension and investment fund management; trustee services; and securities and custody services.

2.2 Foundation & Growth of HSBC:

The HSBC Group is named after its founding member, The Hong Kong and Shanghai Banking Corporation Limited (HSBC), which was established in 1865 in Hong Kong and Shanghai to finance the growing trade between China and Europe. The inspiration behind the founding of the bank was Mr. Thomas Sutherland, a Scot who was then working as the Hong Kong Superintendent of the Peninsular and Oriental Steam Navigation Company. He realized that there was considerable demand for local banking facilities both in Hong Kong and along the China coast and he helped to establish the bank in March 1865. Then, as now, the bank's headquarters were at 1 Queen's Road Central in Hong Kong and a branch was opened one month later in Shanghai. Throughout the late nineteenth and the early twentieth centuries, the bank established a network of agencies and branches based mainly in China and South East Asia but also with representation in

the Indian sub-continent, Japan, Europe and North America. In many of its branches the bank was the pioneer of modern banking practices. From the outset, trade finance was a strong feature of the bank's business with bullion, exchange and merchant banking also playing an important part. Additionally, the bank issued notes in many countries throughout the Far East.

During the Second World War the bank was forced to close many branches and its head office was temporarily moved to London. However, after the war the bank played a key role in the reconstruction of the Hong Kong economy and began to further diversify the geographical spread of the bank. The group expanded primarily through offices established in the banks name until the mid 1950s when it began to create or acquire subsidiaries. This strategy culminated in 1992 with one of the largest bank acquisitions in history when HSBC holdings acquired Midland Bank plc, which was founded in UK in 1836.

2.5 HSBC Business Entities

The group is represented by different business entities in over 88 countries and territories around the world. It would be difficult to list them all individually so the name of the major entities is shown on the following page along with their region and volume of operation. 10

2.6 HSBC Group Vision

To be the unique foreign bank in Bangladesh and to make significant contribution to the national economy and enhance customers' trust & wealth, quality investment, shareholders' equity employees' value and rapid growth in

2.7 HSBC Group Mission

To be the Bonding Company that guarantees in the market to satisfy appropriately and professionally the bonding needs of our obligors and the assurance of timely fulfillment of our bond to our beneficiaries.

2.8 HSBC Group Values

Long term, ethical client service High productivity through team work Confident & ambitious sense of excellence International character, conservative orientation

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Capable of creativity & strong marketing

2.9 HSBC Governing Objective

We will beat the mean Total Shareholder Return performance of a peer group of financial institutions over a three year rolling average, and target to double Shareholder returns in five years.

2.10 HSBC's Business Principle & Values

The HSBC Group is committed to five Business Principles: Outstanding customer service; Effective and efficient operations; Strong capital liquidity; Conservative lending policy; Strict expense discipline;

HSBC also operates according to certain Key Business Values:

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The highest personal standards of integrity at all

levels; Commitment to truth and fair dealing; Hand-on management at all levels; Openly esteemed commitment to quality and

competence; A minimum of bureaucracy; Fast decisions and implementation; Putting the Group's interests ahead of the

individual's; The appropriate delegation of authority with

accountability; Fair and objective employer;

merit

approach

to

recruitment/selection/promotion; A commitment to complying with the spirit and

letter of all laws and regulations; The promotion of good environmental practice and development and commitment to the

sustainable

welfare and development of each local community.

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2.11. HSBC Brand & Corporate Identity

The Hexagon logo of HSBC derives from HSBCs traditional flag, a white rectangle divided diagonally. Like many other Hong Kong company flags in the last century, the design of the flag was based on the cross of ST. Andrew, The Patron Saint of Scotland. HSBC brand & corporate identity represents what HSBC wants its brand to mean to its customer. It is derived from the groups:

Corporate Character:
HSBC is a prudent, cost conscious, ethically grounded, conservative, trustworthy relationships. international builder of long-term customer

Basic Drives:
Higher productivity, Team Orientation, Creative Organization & Customer Orientation.

Vision:

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To be the worlds leading financial company. The essence of HSBC brand is integrity, trust and excellent customer service. It gives confidence to customers, value to investors & comfort to colleagues.

2.12 HSBC in Bangladesh

HSBC obtained license from BANGLADESH BANK on The HSBC Asia Pacific group 1 April 1996 to conduct banking business in the country and commenced formal banking operations on 3 December 1996 through opening a branch at Dhaka .In Bangladesh , the HSBC Group is represented by Hong Kong bank , which has its head office in Hong Kong and a holding company, HSBC holding plc, which is incorporated in England .on 41 December 2000 , total capital and reserve of HSBC in Bangladesh were BDT 535.7 Million , which comprised capital BDT. 441.6 million and supplementary capital BDT. 94.2 Million. Realizing the huge potential and growth in personal banking industry in Bangladesh, HSBC extended its operation to the personal banking sector in Bangladesh and within a very short span of time it was able to build up a huge client base. Extending its operation further, HSBC opened a branch at Chittagong, seven branch offices at Dhaka (Gulshan, Mothijheel , Dhanmondi, Uttara and Banani) and Sylhet the number of employees of this bank in Bangladesh was

257. At Present number of employee is around 835. 15

In 2002, paid-up capital of this bank was BDT 380 million. Deposit of this bank was BDT 4,980 million. Among this deposit, called deposit was BDT 487 million and fixed deposit was BDT 1,323 million. The amount of advance and investment was BDT 1,180 million and BDT 100 million respectively. In 2002, this bank operated foreign exchange business of BDT 8,234 million. HSBC Bangladesh is under strict supervision of HSBC Asia Pacific Group, Hong Kong. The Chief Executive Officer of HSBC Bangladesh manages the whole banking operation of HSBC in Bangladesh. Under the CEO there are heads of departments who manage specific banking functions e.g. Personal banking, corporate banking, etc. Currently HSBC Bangladesh is providing a wide range of services both two individual and corporate level customers. In the year 2000, the bank launched a wide array of personal banking products designed for all kinds of (middle and higher-middle income) individual customers. Some such products were Personal loans, car loans, etc. The bank also launched three of its personal banking products Tax loan, Personal secured loan & Automated Tele Banking (ATB) service. These products are designed to meet the diverse customer needs more completely.

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HSBC in Bangladesh also specializes in self-service banking through providing 24-hour ATM services. Recently it has introduced Day & Night banking by installing Easy-pay machines in Banani, Uttara and Dhanmondi to better satisfy the needs of both customers and noncustomers. In total HSBC currently has 30 ATMs of Dhaka, Sylhet & Chittagong.

2.13 HSBC Bangladesh at a Glance:

HSBC AT A GLANCE
Name of Organization Year Establishment Nature of the Organization Capital the The Hong Kong & Shanghai Banking Corporation Limited of 1996 Multinational Company with subsidiary group in BD. Paid up capital: BDT. 4380 Million Deposit BDT. 4,980 Million Advance BDT. 3,255 Million HSBC group shareholders

Shareholders Head Office

Anchor Tower, 108, Bir Uttam C R Dutta Road Dhaka-1205, Bangladesh.

Number of Offices 11 Number of ATMs 30 Number of Around 800 employees Technology Offers Phone Banking Services and full online banking from branch to branch. Serves individuals and corporate customers within Dhaka, Chittagong and Sylhet

Service Coverage & Customers

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2.14. Financial Services

It means any service or product of a financial nature that is subject to , or governed by, a measure adopted or maintained by a party or by public body that exercises regulatory or supervisory authority

delegated by law and includes , but is not limited to : deposit taking; loan and investment services ; insurance ; estate , trust and agency services ; securities ; and all forms of financial or market intermediation including , but not limited to , the distribution of financial products.

2.15 HSBC Bangladesh Offices & ATM Centers

Branches & Booths:
Dhaka Main Office (Full service branch with one ATM) Anchor Tower, Sonargaon Road - Dhaka Gulshan Office (Personal Banking Booth with one ATM) Gulshan Avenue, Dhaka Motijheel Office (Personal Banking & Remittance office with one ATM) Rajuk Avenue, Motijheel- Dhaka 18

Dhanmondi Office (Personal Banking Booth with one ATM) Road-27, Dhanmondi-Dhaka

Chittagong Office (Full service branch with one ATM) Osman Court, Agrabad Chittagong

Uttara Office (Personal Banking Booth with one ATM) Plot No. 4/A, Road No. 5, Sector 4, Uttara Model Town Dhaka1230.

Banani Office (Personal Banking Booth with one ATM) House 155, Road 13/B (On Road 11)

Sylhet Office (Full service branch with one ATM) Coushatta, Sylhet

Narayangonj Office (Personal Banking Booth with one ATM) 50 S M Maleh Road, Tanbazar, Narayanganj

Mirpur Office (Personal Banking Booth with one ATM) Hyperion Rose, Plot 61/1 and 61/2, Road 4, Block B, Section 12, Mirpur, Dhaka

Offsite ATMs
Shantinagar Twin Towers Concord, 27, 27/1 - 27/7 Chamelibagh, Shantinagar, Dhaka 1217

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Motijheel 1/C Rajuk Avenue, Motijheel C/A, Dhaka 1000 Radisson Radisson Water Garden Hotel, Airport Road, Dhaka Cantonment, Dhaka 1206 Sheraton Dhaka Sheraton Hotel, 1 Minto Road, Dhaka 1000 Westin The Westin Dhaka, Plot 1, Road 45, Gulshan-2, Dhaka 1212 DEPZ Dhaka Export Processing Zone, Adjacent to SFB No. 01, Ganakbari, Savar, Dhaka CEPZ Zone Service Complex (Ground Floor, Eastern Wing) CEPZ Bandar, Chittagong KEPZ Zone Services Building, Ground Floor, North Pothenga, Chittagong

2.16 Organizational Hierarchy at HSBC, Bangladesh:

HSBC follows a 4-layer management philosophy in Bangladesh. These are Managers, Executives, and Officers & Assistant officers. The CEO is the top most authority of all the levels. Managers are the departmental heads that are responsible for the activities of their

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departments. They are the heads of the department and formulate strategies for that department. e.g. Human Resources Manger. Executives have the authority next to managers. They are basically responsible for certain activities & organizational functions. e.g. Admin Executive. These two layers represent the management level of HSBC Bangladesh. Officers are the next persons to stand in the hierarchy list. They are the typical mid-level employees of HSBC organizational hierarchy. These officers are responsible for

managing the operational activities and operating level employees. The operating level employees of HSBC who are ranked as Assistant Officer fill the last layer of this hierarchy. They perform they day-today operational activities of HSBC. An organizational hierarchy chart is shown below:

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2.17

Organizational Structure of HSBC

Bangladesh:
2.17.1 Chief Executive Committee:

i e

c u

t i v

f f i c e

C O

i e f O p e M r aa nt i a n g g e r H e a d o f M a n a f f i c e P r e r s o n a l C F oi n r a p n o cr Hai a t u l e m S B ea a r n nv

g e rM a n a g e r kiR c i ee n Mss g o a u r r k c e e t i Dn eg

The organizational structure of HSBC Bangladesh is designed according to the various service and functional departments. The Chief Executive Officer (CEO) heads the chief executive committee, which decides on all the strategic aspect of HSBC. The CEO is the person who supervises the heads of all the departments and also is the ultimate authority of HSBC Bangladesh. He is responsible for the all the activities of HSBC Bangladesh and all its consequences. He administers all the functional departments and communicates with the department heads for smooth functioning of the organization. The HSBC Chief Executive Committee is formed with the heads of all departments along with the CEO. The structure of this top-most authority is shown in the figure above. Besides the CEO the CEC is

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staffed with 5 more managers: Chief Operating Officer, Manager Personal Financial Services, Head of Corporate Banking, Manager Human Resource Department and Manager Marketing.

2.18 Functional Departments of HSBC

HSBC activities are performed through functional

departmentalization. So, the departments are separated according to the functions they perform (HR, Marketing, Personal Banking, etc.). There are 6 major functional departments at HSBC: Human Resources, Services, Financial Control, Personal Banking, Corporate Banking and Marketing. Within these major departments there are some other subsidiary departments that allow smooth operation of their own major departmental function. A graphical presentation of all the departments (Major & minor) is shown in the following page. A brief functional description of these departments is discussed below:

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Functional Departments of HSBC:

IT Information Technology PCM Payment and cash management HUB HSBC universal Banking

2.18.1 Human Resource Department:

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The Human resource Manager heads this department. The major functions of this department are Recruitment, Training and developments, Personnel Services and Security. The HR department is much concerned with the discipline that is set up by the HSBC group. HSBC group has got strict rules and regulations for each and every aspect of banking, even for non-banking purposes; i.e. The Dress Code. All these major personnel functions are integrated in the best possible way at HSBC, which results in its higher productivity. The Human resource officer monitors the employee staffing and administration activities. The Training officer supervises Training, development & rotation activities. The structure of the HR department is shown below:

Structure of Human Resource Department:

AO = Assistant Officer

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2.18.2 Services Department:

This is an integral and vital part of the bank. The services department ensures smooth operation and functioning within and between all the departments of HSBC. It also provides continuous support to the core banking activities of HSBC. The Manager of Services heads this department who formulates and manages various critical issues of the services function of HSBC. He is followed by a group of executives who are the heads of various subsidiary divisions that operate within the services department. The services department is considered as the backbone of all other departments. The various subsidiary division within this department are Administration, IT, Internal Control (IC), Network Services Center (NSC), and HUB. A structure of the services department is

presented below followed by a briefing of the subsidiary divisions:

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2.18.3 Financial Control Department (FCD):

This is considered as the most powerful department of HSBC. It keeps tracks of each and every transaction made within HSBC Bangladesh. Manager of FCD who ensures that all the transactions are made according to rules and regulation of HSBC GROUP heads it. Violation of such rules can bring serious consequences for the lawbreaker. The functions of FCD are briefly discussed below along with an organ gram of the department:

FC Foreign Correspondence PCM Payment & cash management OCM Outward cash management

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2.18.4 Personal Financial Services (PFS):

PFS is the most flourishing department of HSBC Bangladesh. This department basically deals with the management of products and services offered to the in individual consumers. Within a span of only seven years, HSBC, PFS has grown tremendously and is still growing with its innovative products and service offerings. Manager of PFS, Mr.Shafqat Hossain , Head of this department. He is the person behind the astounding growth of PFS department in HSBC Bangladesh. Chief of PFS manages and supervises the Personal Banking activities of the branch network of HSBC Bangladesh. The 11 branches of HSBC basically deal with the personal banking activities and provide various accounts services to individual customers. The Organ gram of PFS shown below:

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Head of PFS

Head of Distribution

Manager, Direct Sales

Manager, Credit Approval

Manager, Collection.

Manager, Premier Banking

Manager, BI International

Manager, Branches

Approval Officers

Team Leader Collection Officer

Officer

Officer

Asst.Manag er, Sales

Asst.Manag er, CEPS Auto pay

Asst.Mana ger, Reporting

STL, Sales

TL, Sales

MSO

Branch Manager

Customer Service Manager

Customer Service Officer

2.18.4.1 Branch Network:

There are eleven branches of HSBC, 9 situated at different place in Dhaka and 2 at Chittagong and another 1 is in Sylhet . Only the Dhaka office (head office) branch & Chittagong branch deals with

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both corporate and personal banking. The other 9 offices only deal with the personal banking activities. There functions are to provide various financial services to the consumers. These include customer services, sale of various PFS products, opening new accounts, providing cash, remittance and other teller services, etc. the branches are quite decentralized for better delivery of services to customer and have their own premises and facilities. Branch managers head these branches. Each branch is staffed with its own team of employees. A great deal of teamwork is seen within these branches. ATMs are situated with each branch premises.

2.18.4.2 Credit Department:

The personal banking credit department deals with the consumer credit schemes such as the Personal loan, car loan, personal secured loan, personal secured credit etc., which are tailored to meet the demand of individual customers. The manager of PFS credit, Mr. Safiul Ajam, approves and administers all the activities of this department. He is staffed with five loan approval officers, two loan processing officer, two assistant officers and one MIS clerk. The approval officers mainly reject or approve the credit requests. After being checked by the approval officers, the credit requests go to the processing officers for further processing of the application.

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2.18.4.3 ATM Center

The ATM center ensures smooth operation of the ATM machines that are located at Dhaka, Chittagong and Sylhet. The ATM center is responsible for regular replenishment of the off-site ATMs and servicing of all the ATMs. Currently a total 30 ATMs are in operation. The ATM center also deals with issuance, termination and servicing of the ATM cards. Basically, the ATM center is the department that is solely responsible for all the activities related to ATM and is the facilitating department that enables customers 24 hour banking support.

2.18.4.4 ATB center

ATB refers to Automated Tele Banking. This department deals with the back office servicing of the HSBC phone banking services provided to customers. This department is basically responsible for the activation of ATB, ATB pin generation, and ATB security management, ATB blocking and troubleshooting of all ATB

problems. Currently this department is staffed with one executive and an officer.

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2.18.5 Corporate Banking:

This division of HSBC provides financial services to organizational clients. HSBC is a worldwide leader in banking and financial services whose success is based on its relationships with its corporate clients. Whether it is locally or around the world, HSBC offers a comprehensive range of services that can be tailored to the individual needs of the company. Mr. Mahbubur Rahman, who manages the activities of corporate banking of HSBC BANGLADESH, heads the department. Two offices of HSBC Bangladesh offer corporate banking services to corporate clients. These are the Dhaka Head Office and Chittagong office. Corporate Banking of HSBC Bangladesh includes Corporate Institutional Banking (CIB) Trade Service (HTV). These sub-divisions are discussed briefly in the following sections:

2.18.6 Marketing Department:

The sixth major department of HSBC is the marketing department. The marketing department of HSBC play a vital role in fostering the continuos growth HSBC in Bangladesh. A manager is assigned to this department who looks after the overall marketing operation of HSBC in Bangladesh. This department is basically concerned about marketing the companys products, services and building a strong corporate image. The marketing department of HSBC has four 32

subdivisions: Direct Sales, Promotion, Marketing Administration and public relation. This division are discussed below:

2.18.6.1 Direct Sales (DS):

Basically, this Direct Sales is a vital part of PFS as well as Marketing .This department is controlled by PFS. An executive is assigned to this part of the marketing department. The Direct Sales division coordinate & manages the sales activities of all the Mobile sales officers (MSO) of HSBC Bangladesh. The MSOs basically makes sales of the company various Personal Banking products such as, savings accounts, consumer loan, etc outside the banking premises. There are a total of more than 200 mobile sales officers (MSO) employed in the cities of Dhaka and Chittagong and Sylhet. The MSOs are assigned to specific branches for making sales activities more smoothly. The DS executive sets sales strategies & targets for the Sales officers and manages the whole team of MSOs in Bangladesh. The direct sales department also decides upon the commission and remuneration of the mobile sales officers as their salary structure is based on sales performances. Thus this part of the marketing division is very important for the overall growth of the Personal Banking Division.

2.18.6.2 Promotion:
33

This part of the marketing department deals with all the promotional activities of HSBC Bangladesh. Prime responsibilities of this

department are: Maintaining strong public relations with various media intermediaries, advertising the companys products and services, building a strong corporate image of HSBC in Bangladesh.

2.18.6.3 Public Relations:

The promotion department organizes various environmental and social activities in order to build a strong corporate image of HSBC in the minds of customers as well as in the media. Maintaining strong relationship with news media is another major duty of this department.

2.18.6.4 Advertising:
The promotion also coordinates all the advertising of HSBC products within Bangladesh. Some of the advertising tools that are frequently used by the company are as follows: a) Newspapers Advertising: Regular advertisements of various products and services of HSBC are given in some of the countrys most renowned daily newspapers. b) Billboards: Huge colourful billboards with HSBC logo are found in various major areas of Dhaka and Chittagong. These

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billboards emphasize on the needs of customers and shows HSBC logo as solution to their needs. c) Road Side Signposts: Medium sized multi colour signposts focusing on various products of HSBC are found on the roadsides of various posh areas such as, Gulshan, Dhanmondi, Baridhara, Motijheel, etc. d) Mailers: various product updates and new product information are regularly sent to existing customers of HSBC. e) Brochures: Various colourful brochures featuring specific products of HSBC are being displayed and distributed to existing and potential customers via branch offices and Mobile sales officers. These are some of the promotional activities managed and coordinated by the promotion department.

2.18.6.5 Marketing Administration:

This department formulates & executes various marketing

strategies of HSBC Bangladesh. This department also administers various marketing research activities on the existing and potential customers of HSBC. Some such research activities are: mystery shopping, critical incident surveys, customer suggestion surveys, etc. The results of these surveys are integrated while formulating various marketing strategies. This department also deals with the

35

billing and invoicing of various marketing & advertising costs of HSBC Bangladesh. In these are the major departments of HSBC Bangladesh. Except the branches all other departments are situated at HSBC Bangladesh head offices located at Anchor Tower, Kawran Bazar. Most of HSBCs operation and activities are operated centrally from the head office. But to deal with customers more completely, the branches are given considerable authority and they operate in a more decentralized manner but subject to verification of the respective departments.

5.13 Major Competitors of HSBC:

The HSBC Bank pointed out some of the major competitors of them, according to the customer perceptions. This aspect is very important to HSBC management, as customers are the ultimate person who decided among banks. The offerings and services of the major competitors can be analyzed to better understand the customer needs and wants. They uniformly explored that Standard Chartered Bank (SCB) was the closest competitor of HSBC and also pointed out that it had a better place or rank in the minds of customers. This is an obvious fact given the size and volume of SCBs businesses. There are many names that compete for the second best competitor of HSBC. But among those Prime Bank was 36

found to be the next best competitor of HSBC in the minds of customers. Some other names were BRAC Bank, Dutch-Bangla Bank Ltd., Eastern Bank Ltd. Southeast Bank Limited, National Bank Limited, etc. The reason behind this findings is that HSBC can improve the overall service offerings by closely analyzing the offerings of its closest competitors. With such an attempt customer satisfaction would be an obvious outcome.

3.0 Work Experience at HSBC:

Headquartered in London, HSBC is considered as one of the largest banking and financial services organization in the world. In Bangladesh it has made its place as the fastest growing bank. Being able to work as an intern in this world-renowned organization I find myself lucky. I got the opportunity to work in one of the most vital department of HSBC - Customer Services Department.

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CHAPTER THREE
4.0 Product & Service 38 Of HSBC

4.1 Product and Service:

HSBC Bangladesh carries out all traditional functions, which a commercial Bank performs such as Mobilization of deposit,

disbursement of loan, investment of funds, financing export & import business, trade & commerce & so on. Besides it also offers some specialized services to its customers. Products & services offered by HSBC can be categorized according to the customers 39

they serve. Thus two major groups can be identified. They are individual customers or consumers & corporate customers or organizations. An in-depth analysis of HSBCs product and services in Bangladesh is presented in this section. First of all, the liability products of the bank are discussed. Then, the various products and services of personal banking division will be presented. The summary of all the products and services of HSBC Bangladesh is displayed in the following page with the help of a diagram.

4.1 Liabilities:
The financial products of HSBC can be categorized into two groups Asset products and liability products. Asset products are the various types of credit and loan schemes offered to consumers whereas the liability products consist of all the savings and deposit schemes offered to customers.

In the following section, the products of HSBC are described briefly:

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41

4.3 Personal Banking Products:

The personal banking division of HSBC has designed various assets products to meet the needs of individual customers. These are various loans and consumer credit schemes that satisfy and fulfill some basic purchase purpose of the individual customers. These products are described in the following sections. Loans and Credit: Personal Credit offered by HSBC are: 1. Personal Installment Loan 2. Car Loan 3. Home Loan 4. Personal Secured Loan 5. Personal Secured Credit 6. Credit card Personal Installment Loan is an any purpose loan. It has been categorized into the following: i) ii) iii) iv) Professional Loan Lifestyle Loan Furniture Loan Festival Loan 42

The following loans with different benefits are also available under Personal Installment Loan: v) vi) vii) Travel Loan Student Loan CNG Conversion Loan

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5.0 Learning Part

CHAPTER Four

3.1 Introduction:

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General Banking Departments performs the core function of the bank operate the day to day transactions. It is the storage point for all kinds of transactions of foreign exchange department, loans and advances department. They take the deposits from customers and their demand for cash honoring their cheqes. The department is very rush and the employee here are too upgrade to their duty. They pass entry of every transaction within the day. It opens new accounts, remit funds, Issue bank draft and pay order etc. since bank is confined to provide this services every day, general banking is known as retail banking.

3.2 Different Section of General Banking:

General banking departments generally deals with the following sections: Account opening section Bills and clearing section Remittance section Cash section Accounts section

3.3 Account opening and dispatch department:

Account opening is the getaway to the bank. The relationship between a banker and its customer begins with opening of an account by the customer. For this account opening is considered the most important function of a commercial bank. All banks generally maintain a separate department to open account. The function of account opening department can be classified into the following three categories: Supplying various accounts customers Opening of account Issuing cheque books related information to the

45

3.4 Types of Accounts Maintained by HSBC: 4.1.3 Current Account

This is also a depository account basically designed for various customers. This is a non interest bearing account and the features of this account are as follows: Opening balance Tk 50,000 Average balance that should be maintained: Tk 50,000 No restrictions on number of Transactions No yearly ledger fee Noninterest bearing Free ATM card and phone banking service Can be opened only by: o Individuals (joint or single) o Proprietorship companies o Partnership companies o Limited Companies o Liason offices o NGOs Documentation needed: various kinds of documents are needed for the companies such as memorandum of

46

association, board resolution, etc. however the requirements for individuals are same as the savings account.

4.1.2 Savings Account:

This is a depository account basically designed for small-scale savers. This is an interest bearing account and the features of this account are as follows: Opening balance Tk 25,000 Average balance that should be maintained: Tk 25,000 Interest bearing (from 4% - 5.25%). One of the unique features of HSBC savings account is that interest is calculated on daily outstanding balance and is credit to customers account every six months. Restrictions on number of Transactions No yearly ledger fee Free ATM card and phone banking service Can be opened only by Bangladesh and dual citizens in single or joint names. Documentation required to open the account: two pp-size photographs, filled account opening form photocopy of passport copy or voter Id Card & check/cash of Tk 25,000.

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3.5 Account Opening Procedure:

Opening of an account involves certain formalities, which varies according to different types of accounts as well as various types of customers. The bank supplies following printed forms during opening an account of a customer: Account opening form Specimen signature card Deposit slip Cheque book requisition slip Transaction profile form.

After complication all of the formalities by the customer, the bank officials have to perform the following functions chronologically: Step 1: the account should be properly introduced by any one of the following: An existing current account holder of the bank Officials of the bank, not below the rank of an assistant officer. A respected person well known by the banks officials.

Step 2:

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Receiving filled up application in banks prescribed from mentioning what type of account is desired to be open. Step 3: The form is filled by the applicant himself/ herself Two sizes of passport size photographs from individuals are taken; in case of forms photographs of all partners are taken. Applicant must submit required documents Applicant must sign specimen signature sheet and give mandate Introducers signature and accounts number- verified by legal officer

Step 4: Authorized officer accepts the application Step 5: Minimum balance is deposited- only cash accepted. Step 6: Account is opened and a cheque book and pay-in-slip book is given

3.6 Cheque Book Issue:

A cheque book is issued to the customer at the time of the account opening or may by issued after days from account opening. And additional cheque book is issued at the request of the customer according to his/her necessity. Followings are the formalities during issuing a cheque book:

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Getting the cheque book requisition slip signed by the account holder. By verify the signature, issuing the cheque book. Writing down the account number in each leaf of the cheque book Make entry to the cheque issue register. Supply the cheque book to the account holder after getting proper acknowledgement from the account holder.

4.1.4 Short Term Deposit (STD):

These accounts are opened mostly by the organizations.

Organizations normally maintain current accounts in the banks. They need to transact bulk amount regularly thats why, current account fits with their requirements. As current accounts do not provide any interests and as the organizations cannot have savings account, they are deprived of earning any interest despite having huge deposit in their accounts. Short-term deposit accounts enable them to earn interests from their accounts. These kinds of accounts share some properties of both current and savings accounts. The account provides interests, which are like the savings accounts, and the holder can withdraw any amount any time from his account, 50

which is a property of the current account. Individuals especially, businessmen maintain such accounts.

4.1.5

Fixed Deposit:

It is also known as term deposits. These deposits are made in the bank for a fixed period of time. This period of time should be specified in advance. The bank needs not maintain cash reserves against these deposits & therefore, it offers interest rates that are higher than the savings accounts.

4 . 1 . 6 Residents Foreign Currency Current accounts

BD nationals residing abroad open this account. Foreign nationals residing abroad or in Bangladesh, Foreign firms registered abroad, Bangladeshis working in multinationals at Bangladesh and receiving salary in FC can also open such account. The account is non-interest bearing and there are various kinds of restrictions for withdrawals and deposits. The account can be maintained in Euro (EUR), Pound Sterling (GBP) and US Dollar (USD).

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4 . 1 . 7 Non-resident foreign currency accounts

These are time deposit interest bearing accounts. All non-resident Bangladeshi nationals can open them, persons having dual

citizenship, shipping staffs, etc. they can be maintained in EUR, GBP & USD currencies. These accounts are strictly monitored by the central bank and restrictions exist for these accounts.

4 . 1 . 8 Resident foreign currency deposit accounts

Balances in these accounts are freely transferable abroad without any restriction from Bangladesh bank. Resident Bangladeshis returning from abroad can open this account within one month of his/her return.

4 . 1 . 1 1 Other accounts
There are various other accounts that are created to meet customer demands and requirement. Such accounts are customized and restrictions on these accounts are subject to change.

4.2 Services Offered to these Accounts:

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Wide ranges of services are offered to the customers who hold these accounts. Some such services are: cheque Free ATM Card, check book & phone banking service Cheque /cash deposits Standing instruction Quarterly/monthly / yearly statement of account Foreign currency Endorsement against travel quota and sale of Travelers cheques (Thomas Cook). Issue of Solvency/Bank certificate Payment orders, demand drafts, Telegraphic transfers. Inward and outward funds transfer and receiving.

Some unique services are also provided to customers using HSBC accounts. These services are Phone Banking, Self Service Banking & Power vantage Scheme.

3.8 Inland Remittance Department:

Carrying cash money is troublesome and risky. Thats why money can be transferred from one place to another through banking channel. This is called remittance. Remittances of funds are one of the most important aspects of the commercial bank in rendering services to its customers Types of remittance Between banks and non banks customer. Between banks in the same country. 53

Between banks and central banks in the same country Between banks in the same centers Between central banks of different customers.

3.9 The main instruments used by the HSBC remittance of funds are:

Pay order:
Pay order is an instrument that contains an order for payment to the payee only in cash of local payment weather on behalf of the banks or its constitutions. Unlike cheques there is no possibility of dishonoring pay order. HSBC charges different amount of commission on the basis of pay order amount.

Demand Draft (DD):

By DD one person can send money from one branch to another branch of HSBC Bank. To send the money he or she must fill up the HSBCs prescribed form of DD and paid charge commission and receive DD block. The following information is received in the DD block: Name of the sender branch Name and account of the party, who receives the money. For security purpose a confidential test number are included in the DD block. Amount of money to be transferred. Name of the receiver branch.

The sender sends then block to the receiver branch of DD. When this DD block is received by the receiver branch the authorized officer of the receiver branch test the DD confidential number and if the test is proved than he/she give the money to the payee.

Telegraphic Transfer (TT):

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To send money urgently HSBC may be requested for TT on payment of a nominal charge and telegraphic charge. Any person urgently sends money from one branch to another branch through TT. When a message of TT send through phone from one branch to another branch, in that time the message received by the authorized officer who has a right of power of Attorney. After that he/she fill up the TT from. Following things are included in TT: TT number TT test number Name and account number of the payee Power of attorney number of the sender and receiver of TT. The amount to be transferred.

After fill up of TT from, he test the Test number of TT. If he/she ensured through testing the test number than he credit the account of the payee. On the other hand if the test number is not proved than he/she callback to the sending branch of TT and request to send a new TT.

Mail Transfer:
Money can be send through mail transfers to anybody who has an account in any other branch of the same bank. For this purpose the sender shall have to furnish details like: The name of the beneficiary and his/her account number The amount to be transferred The name of the branch where the account is maintained.

3.10 Clearing Section:

The amounts of cheques, pay orders (PO) and demand draft collection from other banks on behalf of its customer is a basic function of a clearing department. Clearing: Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house. 55

Clearing House: Clearing House is a place where the representatives of different banks get together to receive and deliver cheques with another bank. Normally Bangladesh banks perform the clearing house in Dhaka, Chittagong, Rajshahi, Khulna and Bogra. Where there is no branch of Bangladesh bank, shonali banks arrange this function.

3.11 Types of Clearing:

Outward Clearing: When the branch of a bank receives cheques from its customers drawn on the other banks within the local clearing zone for collection through clearing house, it is outward clearing. Inward Clearing: When the banks receive cheque drawn on them from other banks in clearing house, it is inward clearing. Responsibility from the concerned officer for the clearing cheque: 1. Crossing the cheque 2. (Computer) posting of the cheque 3. Clearing seal and proper endorsement of the cheque. 4. Separation of chque from deposit slip. 5. Sorting of cheque 1st bank wise and than on branch wise. 6. Computer print 1st branch wise than bank wise. 7. Preparation of 1st clearing house computer validation sheet. 8. Examine computer validation sheet with deposit slip to justify the computer posting

3.12 Bills Collection:

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In modern banking the mechanism has become complex as far as smooth transaction and safety is concerned. Customer does pay and receive bill from their counterpart as a result of transaction. Commercials banks duty is to collect bills on behalf of their customer.

3.13 Types of bills for collections:

Outward bills for collection (OBC):
OBC means outward bills for collections. OBC exists with different branches of different banks outside the local clearing house. Normally two types of OBC: 1. OBC with different branches of other bank. 2. OBC with different branches of the same bank.

Procedure of OBC:
1. Entry in the OBC register 2. Put OBC number in the cheque. 3. Crossing seal on the left corner of the cheque and payee account credited on realization seal on the back of the cheque with signature of the concerned officer. 4. Dispatch the OBC cheque with forwarding. 5. Reserve the photocopy of the cheque carbon of the forwarding and deposit slip of the cheque in the OBC file.

Inward bills for collection (IBC):

When the bank collects bills as an agent of the collection bank, the system is known as IBC. In this case the bank will work as an agent of the collection bank. The bank receives a forwarding letters and the bill. 57

Procedure of IBC:
1. IBC against OBC: To receive the OBC cheque first we have to give entry in the IBC registry. The IBC number should put on the forwarding of the OBC with date. 2. Deposit of OBC: OBC cheque amount is put into the creditors account prepare debit and credit voucher of it. If the OBC cheque is honored send credit advice with signature and advice number of the concern branch for the OBC amount. 3. If the OBC cheque is dishonored, the concern branch is informed about it. Again place in the clearing house or send the OBC cheque with return memo to issuing branch according to their information.

9. Accounts Department:
This is the most confidential department of the bank. Recording all kinds of transaction of the branch, confirming their accuracy and preparing statements are the main job of this department. Now days under computerized banking system, the job of accounts department is very easy. Now the computers directly prepare the clean cash statements and supplementary statements on party ledger vouchers the account also manually doses other works as for extra security. The function of the account department can be divided into two parts: A. Daily function B. Periodical function Daily Functions: Posting the a/c to a/c transfer transaction in transfer register, Preparation of supplementary statement, Computer posting of different transactions that occur in a day the accounts officer examines whether cashbook has agreed or not.

Periodical Function: 58

The periodical function of this department is to prepare different types of statement for its own branch, Head office, Bangladesh bank.

CHAPTER Five
4.0
Findings, Recommendations and Conclusion

5.15 Findings:
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The opening service charge of savings account is higher compared to other banks. The services of the accounts opening section and remittance and clearing section of HSBC Bank are very slow because of the shortage of employees. The number of ATM booths of this bank is not satisfactory. The networking system of HSBC is not so much good. So sometimes clients always have to wait for any transaction. In terms of HSBC, which is a world-class service provider worldwide, but customers are not fully satisfied of their products & services.

HSBC deposit schemes are not clear to all customers. Thats why sometimes customers are not interested to opening the deposit scheme.

5.16 Recommendations:
On the basis of findings some recommendations were made which are listed below: Number of employees should be increased in account opening, remittance and clearing section to provide better services which will also save time of the clients. The bank employees should communicate properly with customers about their deposit and other schemes. The opening service charge of savings account should be reduce for the clients. Networking system must have to be improved. So clients will not be wait for any transaction. The number of ATM booth should have to increase for better services. 60

Bank should be more tactful in dealing with the customers and launch new products expectation. that fully meet customer

5.17 Conclusion:
HSBC is a global banking and financial services organization headquartered in London. The groups international network

comprises more than 8,000 offices in 80 countries and territories, operating the Asia Pacific region, Europe, USA, and Middle East & Africa. HSBC Group is represented in Bangladesh by its subsidiary bank HSBC, Bangladesh. I got the opportunity to serve this bank as an intern under personal financial department of HSBC Main Branch. I was able to witness different procedures and roles that the employees and the customers need to fulfill when they are in the bank. In these three months, I met new people and learned many processes that are being involved inside the bank. My role was to guide the customers in the bank and provide them with the utmost service possible. I also had the opportunity to visit different branches in Dhaka. I also got the scope to interact with customers and reveal their expectations and perceptions about the banks services. During my interaction with customers and the employees that work inside the bank, I felt that somewhere there are gaps between customer 61

expectations and banks services and thus I tried my level best to find out what HSBC lacks as a Bank. I have provided some interesting insight into what kind of service the customers give importance to and what quality service they get from HSBC. It is quite obvious from my experience that the customer requirements are not fully met and they are very dissatisfied with some of the aspects of the bank (location, saving rates, credit services, investment services, etc.). Finally, I would say that this report at HSBC has increased my practical knowledge of Business Administration and made my BBA education more complete and applied. In this report I got the opportunity to apply various tools and concepts I learned in my BBA courses. Some such courses were Marketing Management, Services marketing, Consumer Behavior and a few elements from Human Resource Management. Customers are vital for every business. It is not possible to make a profitable business without concerning the customers benefits. HSBC bank has a great potential in the country as a leading global brand. To achieve the desired position in the market, timely improvement in services is essential. The efficiency and

effectiveness in services only in customer service department is not that bank have to be concern. Its a collective responsibility of all

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the departments. So, all the concern departments should be more prompt and efficient to compete with the challenging opportunities of the future. The executive management also should be

enthusiastic in to the development of administration and operational system as per demand of the age.

6.0. References
1. www.hsbc.com.bd 2. www.hsbc.com 3. HSBC Product Book 4. Countrywide publication of HSBC 5. HSBC Brief History Book 6. www.dutchbanglabank.com 7. www.standardchartered.com/bd 8. www.basicbanklimited.com 9. Philip Kotler, Marketing Management, 11th Edition, PrenticeHall. Inc. 10. Wikipedia, the Encyclopedia

11. Exploring Marketing Research, 7th Edition, William G. Zikmund 12. http://www.smh.com.au/ffximage/2007/11/12/hsbc_wide web__470x326,0.jpg 13. http://www.thesecretariat.tv/commercial_character_driv en/hsbcpiggy_spot/HSBC_piggy %20%280%3B00%3B02%3B10%29.jpg

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14. http://www.expertbusinesssource.com/articles/blog/126 0000326/20090405/hsbc.jpg 15. http://earlybirds.terapad.com/resources/4470/assets/ima ges/NimaImages/hsbc.JPG 16. http://www.davemanuel.com/images/hsbc_logo.gif

The End

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