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Consumer Credit Schemes and Consumer Satisfaction of United
Commercial Bank Limited
By
Ziauddin Chowdhury
ID: 0921044
An Internship Report Presented in Partial Fulfillment of the
Requirements for the Degree of Bachelor of Business Administration
Independent University, Bangladesh
December 2012
Consumer Credit Schemes and Consumer Satisfaction of United
Commercial Bank Limited
By
Ziauddin Chowdhury
ID: 0921044
Has been approved
October, 2012
__________________________
Mr. Abul Bashar
Senior Lecturer, Management
School of Business
Independent University, Bangladesh
November 29, 2012
To
Mr. Abul Bashar
Senior Lecturer, Management
School of Business
Independent University, Bangladesh.
Subject: Submission of Internship Report.
Dear Sir,
With due respect I am very pleased to enclose herewith the internship report on
―Consumer Credit Schemes and Consumer Satisfaction of United Commercial
Bank Limited‖. The last three months has been the most fabulous learning
experience for me. Without your guidance and help this learning experience would
not have been way it has been. I have tried my best to prepare a good report with
providing all of my effort and to cover all aspects regarding the matter. I think that
this report contains the information that you need to get an idea about my research
also. However, because of the confidentially policy of United Commercial Bank
Limited it not been possible to put as many data and information as I would have
liked to.
I, therefore, hope that you would be kind enough to accept my internship report.
Sincerely Yours,
Ziauddin Chowdhury
Id: 0921044
Independent University Bangladesh
Acknowledgement
All praises are due to Almighty Allah who enabled me to complete this report. This report
entitled the Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank
Limited.
The study has been successfully accomplished along with considerate support and continuous
guidance of few people. This is the utmost pleasure of mine to show heartfelt gratitude towards
those individuals.
First and foremost, I would like to express my gratefulness my respected supervisor Mr. Abul
Bashar (Senior Lecturer, Management) School of Business, Independent University, Bangladesh
for his support in every area of this research. He is the person of my inspiration to give best
effort in this study. He was always there as an advisor, monitor and supervisor. Without his
cooperation it would not have been possible to accomplish the research.
My thankfulness also goes to Abu Arafat Latif (Senior Officer) of Bashundhara Branch for his
continuous and cordial support during my internship. He provided me with invaluable insights
about overall Consumer Credit (Retail Banking) system of this bank.
I am grateful to all concerned persons who provided valuable guidance, suggestions and advices
in collecting information, analyzing and preparing the report. I am particularly indebted to them
whose efforts and cordial cooperation made the report possible.
Table of Contents
Executive Summary--------------------------------------------------------------------------------------- 01
Origin of Bank--------------------------------------------------------------------------------------------- 02
United Commercial Bank Limited – At a Glance ---------------------------------------------------- 03
Goals and Objectives ------------------------------------------------------------------------------------- 04
Mission ----------------------------------------------------------------------------------------------------- 04
Vision ------------------------------------------------------------------------------------------------------- 04
UCBL‘s Organizational Structure ---------------------------------------------------------------------- 05
Branch Information --------------------------------------------------------------------------------------- 06
Service booths at UCB- Bashundhara Branch -------------------------------------------------------- 07
Employees at UCBL - Bashundhara Branch ---------------------------------------------------------- 08
Products/ Services offered by the Bank ---------------------------------------------------------------- 09
Consumer Credit ------------------------------------------------------------------------------------------ 10
Consumer Credit Schemes of United Commercial Bank Limited ---------------------------- 11 - 16
Objective of the Customer Credit Scheme ------------------------------------------------------------- 17
Collection Steps of United Commercial Bank Limited ---------------------------------------------- 17
About The Research -------------------------------------------------------------------------------------- 18
Statement of the Problem -------------------------------------------------------------------------------- 19
Purpose of the Study -------------------------------------------------------------------------------------- 19
Review of Literature -------------------------------------------------------------------------------- 20 - 22
Conceptual Framework ----------------------------------------------------------------------------------- 23
Research Questions and Hypothesis -------------------------------------------------------------------- 24
Methodology ----------------------------------------------------------------------------------------- 25 – 26
Data Analysis:
Frequencies analysis ----------------------------------------------------------------------------------- 27
Crosstabs analysis -------------------------------------------------------------------------------------- 28
Correlation analysis ------------------------------------------------------------------------------- 29 - 41
Reliability Analysis ------------------------------------------------------------------------------- 42 - 43
Significance of the Study -------------------------------------------------------------------------------- 44
Recommendation ----------------------------------------------------------------------------------------- 45
Conclusion ------------------------------------------------------------------------------------------------ 46
References ------------------------------------------------------------------------------------------------ 47
Appendix --------------------------------------------------------------------------------------------- 48 - 50
P a g e | 1 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Executive Summary:
Internship report is mandatory in the process to pursue a Bachelor‘s degree from country‘s
leading business school at Independent University. The report is divided into two parts –
Company Background and Research. Company Background discusses about the business
where an intern is appointed to, while the Research portion of the report discusses about an
aspect of the business that was never analyzed before.
The report contains small background information of the bank and the branch where the
internee was placed in. As you would proceed further, a service blueprint of the branch has
been provided. A list of people (with respective designation) who were working at the branch,
while writing this report, has been provided.
A detailed picture of customer satisfaction possessed by the bank with its commercial clients
has been the core of the research. As an internee I visited three branches in Dhaka city and
gathered data from 40 respondents (commercial clients) to conduct analysis on the research
topic.
Major findings include:
i. Front-end employees tend to be doing their job well, in terms of interacting with
customers.
ii. Efficiency and clarity of discussing information is found to be the weak link. Staff
training may improve the situation.
iii. Internal service is perceived to be doing better compared to efficiency and
communication of information.
The most important finding, however, is that if a client has faith in the bank‘s procedures, they
can easily be satisfied through empowerment of which would lead to a lasting commitment to
create pool of loyal customers and source of positive word-of-mouth.
After my research I can say that service quality and employee behavior of UCB is quite
satisfactory. To provide better satisfaction towards customer UCB have to improve their
product line much updated and the charges should be under satisfactory level so that
customers feel happy to being with UCB.
Expert advice on marketing research on this topic could have provided more dimensions to
this research. Having more people for brainstorming and research would have given fresh
perspective. The research could have been much better if there were more variables and
sample size to work on, with adequate resources i.e. time, budget, human, etc.
P a g e | 2 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Origin of Bank:
Originally the word ―BANK‖ we can easily understand the financial institution that deals with
money. But there are different types of banks like; Central Banks, Commercial Banks,
Savings Banks, Investment Banks, Industrial Banks, Co-operative Banks etc. But when we
use the term ―Bank‖ without any prefix, or qualification, it refers to the ‗Commercial banks‘.
Commercial banks are the primary contributors to the economy of a country. So we can say
Commercial banks are a profit-making institution that holds the deposits of individuals &
business in checking & savings accounts and then uses these funds to make loans. For these
people and the government is very much dependent on these banks as the financial
intermediary. As banks are profit -earning concern; they collect deposit at the lowest possible
cost and provide loans and advances at higher cost. The differences between two are the profit
for the bank.
Banking sector is expanding its hand in different financial events every day. At the same time
the banking process is becoming faster, easier and the banking arena is becoming wider. As
the demand for better service increases day by day, they are coming with different innovative
ideas & products. In order to survive in the competitive field of the banking sector, all
banking organizations are looking for better service opportunities to provide their fellow
clients. As a result, it has become essential for every person to have some idea on the bank
and banking procedure.
Internship program is essential for every student, especially for the students of Business
Administration, which helps them to know the real life situation. For this reason a student
takes the internship program at the last stage of the degree, to launch a career with some
practical experiences.
P a g e | 3 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
United Commercial Bank Limited – At a Glance:
In the backdrop of economic liberalization and financial sector reforms, a group of highly
successful local entrepreneurs conceived an idea of floating a commercial bank with a
different outlook. For them it was competence, excellence and consistent delivery of reliable
service with superior value products. Accordingly, United Commercial Bank Limited was
created and commencement of business started on 17th
April 1980.
United Commercial Bank Ltd. is operating as a scheduled bank under the banking license
issued by Bangladesh Bank, the Central Bank of the country on April 17, 1980 through the
opening of its Motijheel Branch at Adamjee Court Annex Building, Motijheel commercial
area, Dhaka-1000. UCBL was actually registered under the Companies Act of 1913 with its
registered office at 5, Rajuk Avenue, Motijheel commercial area, Dhaka-1000 which was later
shifted to Adamjee Court Annex Building, 119-120, Motijheel commercial area, Dhaka-1000.
Since inception, it has committed to provide high quality financial services to the people of
this country to accelerate economic development of the nation. As such, it has been working
for stimulating trade and commerce, accelerating the pace of industrialization, boosting
export, creating employment opportunity, alleviating poverty, raising standard of living of the
people etc and thereby contributing to the sustainable development of the country. The bank is
listed with DSE & CSE as a public quoted company.
As a fully licensed commercial bank, United Commercial Bank Limited has being managed
by highly professional and dedicated team with long experience in banking. They constantly
focus on understanding and anticipating customer needs.
In its 22nd
year of operation in 2012, United Commercial Bank has made substantial headway
in terms of business growth, profitability and establishing its image as one of the leading
private commercial banks. Its march towards reaching greater heights in operation continues
with full vigor and enthusiasm. United Commercial Bank has made significant progress
within a very short period of its existence. The bank has been graded as a top class bank in the
country through internationally accepted CAMEL Rating. The bank has already occupied an
enviable position among its competitors after achieving success in all areas of business
operations.
P a g e | 4 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Goals and Objectives:
To utilize all available resources properly to develop various plan, policies and
procedures in each of the objective and goal areas.
Synchronized and steady growth of the bank.
Utilize team of professional employees.
Search for a total customized solution for by establishing full automation step.
Develop a plan for offering better customer service.
Develop a realistic deposit mobilization plan
Build up appropriate lending risk assessment system
Improve capital plan
Develop a structure to make sound loan and advances
Develop systematic procedures and approaches by improving management efficiency.
Expand scientific MIS to monitor bank‘s activities.
Ensure a sound rate of recovery of all loans & advances and other credit facilities
Build up a low cost fund base
Meet capital adequacy recruitment at all the time.
Mission:
To assist high quality service to customer and to participate in the growth and expansion of
our national economy and to satisfy clients, shareholders and employees.
Vision:
To be the bank of the 1st choice through maximizing value of clients shareholder & employees
and contributing to the national economy with social commitments.
P a g e | 5 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
UCBL’s Organizational Structure:
Mid Level
Management
Executive Level
Management
Top
Management
Junior Officer
Management Trainee
Officer
Senior Officer
Principle Officer
Executive Officer
Senior Executive Officer
First Assistant. Vice
President
Assistant Vice President
Senior Vice President
Executive Vice President
Senior Executive Vice
Deputy Managing Directors
Executive Committee
Managing Director
Board of Directors
Chairman
Junior
Level
P a g e | 6 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Branch Information:
UCBL has 125 Branches in Bangladesh
Year 2007 2008 2009 2010 2011 2012
No. of Branches 84 84 84 98 112 125
Total Branch: 56
Total Branch: 38
Total Branch: 07
Total Branch: 01
Total Branch: 02
Total Branch 07
Total Branch: 14
P a g e | 7 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Service booths at UCB- Bashundhara Branch:
Primarily, there are three service counters at this branch – Cash, Clearance & Transfer and
Card.
The first queue system that one can see while entering the bank premises, is located in front of
Cash Booth. A multiple server multiple queuing can be seen at this spot. Four employees are
stationed to work as servers to the customers. Whoever comes first is served first. The purpose
of cash booth is to deposit or withdraw funds from bank accounts.
The other queue system is opposite to clearance and transfer booth. The principle is basically
the same as multiple-server-multiple-queuing; however the services offered are quite different
from cash booth and the queue time is usually lot less in comparison. At this booth, one can
do these following tasks and more:
1. Open a bank account
2. Get bank statements
3. Learn about the deposit schemes offered by the bank
4. Present cheques that are from other banks to debit their account
5. Collect pay-order scripts.
6. Acquire necessary documents from Western Union Money Transfer (to be presented to
Cash booth).
The third service point deals with debit/credit cards, where all information or queries
regarding it can be collected from this desk. This is located at the 2nd
floor of the branch.
P a g e | 8 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Employees at UCBL - Bashundhara Branch:
Designation Name Workstation
Vice-President
& Head of Branch Mr. S.K. Sirajul Kabir
Manager‘s Cabin
(2nd
Floor)
First Assistant
Vice-President
& Operation Manager
Mr. Md Akhter Hossain FAVP‘s Cubicle
(1st Floor)
Senior Executive Officer Mr. Golam Idrees SEO‘s Desk (2nd
Floor)
Senior Officer Mr. Abu Arafat Latif Senior Officer Desk
(2nd
Floor)
Officer Mr. Hafizur Rahman Officer‘s Desk
(2nd
Floor)
Officer – Cash Mr. Shahjahan Chowdhury Cash Booth (1st Floor)
Junior Officer Mrs. Rezwana Khanam Clearance & Transfer
Booth (1st Floor)
Junior Officer Mr. B.M. Borhan Uddin Clearance & Transfer
Booth (1st Floor)
Junior Officer – Probation Mr. Ali Rawshan Ibne Alam Clearance & Transfer
Booth (1st Floor)
Assistant Cash Officer Mrs. Kaniz Fatema Cash Booth (1st Floor)
Assistant Cash Officer Mr. MD. Morshedul Alam Cash Booth (1st Floor)
Assistant Cash Officer –
Probation Mr. MD. Rafiqul Karim Cash Booth (1
st Floor)
Credit Card Service Officer Mr. S.M. Saifullah Card Officers‘ Desk
(2nd
Floor)
Debit Card Service Mr. Ariful Haque Card Officers‘ Desk
(2nd
Floor)
P a g e | 9 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Products/ Services offered by the Bank:
UCB Multi Milionaire
UCB Money Maximizer
UCB Earning Plus
UCB DPS Plan
Western Union Money Transfer
SMS Banking Service
Online Service
Credit Card
One Stop Service
Time Deposit Scheme
Monthly Savings Scheme
Deposit Insurance Scheme
Inward & Outward Remittances
Travelers Cheques
Import Financing
Export Financing
Working Capital Finance
Loan Syndication
Underwriting and Bridge Financing
Trade Finance
Industrial Finance
Foreign Currency Deposit
NFCD (Non Resident Foreign Currency Deposit Account)
All These services can be broken down to Consumer Credit (Retail) Banking; commercial
(includes SME and Corporate) banking; and miscellaneous services.
P a g e | 10 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Consumer Credit:
It is one of the core businesses for United Commercial Bank Limited and has been targeted
for significant further growth. This reflects the potential of consumer credit scheme to
produce high levels of economic profit and perceived demographic trends toward an expanded
middle class and higher income levels.
Asset quality is generally expected to be higher in personal lending than corporate lending due
to variety of factors including:
Diversification of risk
Security
Cultural values
The increasing need for individuals to have access to bank credit for the conduct
of normal daily activities.
United Commercial Bank is a conservative lender in consumer credit as part of its corporate
philosophy. However, conservatism does not mean simply minimizing bad debts, but
incorporates the concept of lending against acceptable risks. The Bank‘s overriding goal is not
only to increase total shareholder return but also to contribute to the socio economy by
improving the life style of the limited income segment of the country and that can be achieved
optimizing profits, rather than just minimizing losses, profit optimization will follow from:
Good-planning and control of approval process
Well-designed products with appropriately focused marketing
The use of statistical techniques and decision support system that permit risks to
be managed predictably
Gathering high quality management information, which is then read and used.
P a g e | 11 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Consumer Credit Schemes of United Commercial Bank Limited:
The United Commercial Bank with their financing items under CCS loan is given below:
Household Durable Loan: Motor Cycle, Personal Computer, Photocopier, Fax machine, Small
PABX system, Television, Mobile Phone set, Refrigerator, Audio-video equipment, Other
home electric appliances, Furniture and any other household items.
Household Durable Loan For purchasing household durables.
Car loan Car, Jeep, Station Jeep, Pick up Van,
Cover Van, Bus, Truck, Ambulance
and any other vehicle for own use.
Doctors’ Loan For the Doctors only.
Loan against salary Any qualified person
Any purpose loan For emergency need
Education loan For Study purpose only
Travel Loan For traveling purpose,
Marriage loan For wedding only.
CNG Conversion
Loan
To convert into CNG
Hospitalization Loan For treatment in hospital
P a g e | 12 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Car loan:
Customer Segment
Any Bangladeshi individual who has the means and capacity to repay the loan. In
specific terms the target customers should cover salaried executives of multinational
companies, middle to large size local corporate, Government officials, Officials
working in Semi-government, Autonomous and reputed Non-Government
Organization, International aid agencies and any tax paying businessmen of repute
and self-employed tax-paying individual having a reliable source of income.
Purpose
Purchase of non-commercial new and reconditioned vehicles for personal use only by
individual.
Doctors’ Loan
Customer Segment
Any Bangladeshi citizen who is a graduate in Medical Science/Dentist/Eye/Allopathic
as self-employed or salaried people has the means and capability to repay the loan.
Purpose
Small scale purchase of different medical equipments, machineries, items to support
professional tools or other relevant needs (e.g. run or set up a
clinic/hospital/dispensary).
Household Durable Loan
Customer Segment
Any Bangladeshi individual who has the means and capacity to repay the loan. In
specific terms the target customers should cover salaried executives of multinational
companies, middle to large size local corporate, Government officials, Officials
working in Semi-government, Autonomous and reputed Non-Government
P a g e | 13 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Organization, International aid agencies and any tax paying businessmen of repute
and self-employed tax-paying individual having a reliable source of income.
Purpose
Purchase of household durables like Television, Refrigerator, Air conditioner,
Washing Machine, Computers, other household furniture etc. for personal use only.
Marriage loan
Customer Segment
Employees of reputed multinational companies and large local corporate
Employees of medium sized or mid-range local corporate such as reputed schools
and colleges, insurance and leasing companies, Non-Government Organization,
reputed trading firms and all other salaried persons.
Any tax paying businessmen of repute and self-employed tax-paying individual
having a reliable source of income.
Purpose
To meet the financial need for marriage purpose.
Any purpose loan
Customer Segment
Employees of reputed multinational companies and large local corporate
Employees of medium sized or mid-range local corporate such as reputed schools and
colleges, insurance and leasing companies, Non-Government Organization,
Government officials, reputed trading firms and all other salaried persons
Purpose
The customer has to declare the purpose of the loan but submission of supporting document is
not mandatory. Purpose may be as follows:
P a g e | 14 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
House renovation
Marriage in a family
Advance retail payment
Hospitalization or other emergency medical needs
Trips abroad
Purchase of Miscellaneous household appliances
Purchase of personal computer
Purchase of electronic items
Purchase of furniture
Education loan:
Customer Segment
Employees of reputed multinational companies and large local corporate
Employees of medium sized or mid-range local corporate such as reputed schools
and colleges, insurance and leasing companies, Non-Government Organization,
reputed trading firms and all other salaried persons.
Any tax paying businessmen of repute and self-employed tax-paying individual
having a reliable source of income.
Purpose
For educational purposes like study in abroad or within the country.
Hospitalization Loan:
Customer Segment
Employees of reputed multinational companies and large local corporate
Employees of medium sized or mid-range local corporate such as reputed schools and
colleges, insurance and leasing companies, Non-Government Organization,
Government officials, reputed trading firms and all other salaried persons
Any tax paying businessmen of repute and self-employed tax-paying individual having
a reliable source of income.
P a g e | 15 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Purpose
To meet the financial need for treatment purposes in the following hospitals/clinics of Dhaka
and Chittagong:
BIRDEM
Holy family Hospital
Central Hospital
Monwara Hospital
Samrita Hospital
Medinova
Bangladesh Medical
Metropolitan Hospital
Sikder Medical
Islami Bank Hospital
Dhaka Renal Centre
Ibne Sina Hospital
Lab Aid Cardiac Hospital
National Heart Foundation
CMH, Dhaka
Apollo Hospital
Health Care, Chittagong
Health Home, Chittagong
Poly Clinic, Chittagong
CMH, Chittagong etc
Loan against salary
Customer Segment
Employees of reputed multinational companies and large local corporate
Employees of medium sized or mid-range local corporate such as reputed schools and
colleges, insurance and leasing companies, Non-Government Organization,
Government officials, reputed trading firms and all other salaried persons
P a g e | 16 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Purpose
To meet the financial need for any acceptable purpose.
Travel Loan
Customer Segment
Employees of reputed multinational companies and large local corporate
Employees of medium sized or mid-range local corporate such as reputed schools
and colleges, insurance and leasing companies, Non-Government Organization,
reputed trading firms and all other salaried persons.
Any tax paying businessmen of repute and self-employed tax-paying individual
having a reliable source of income.
Purpose
To meet the financial need for travel purpose.
CNG Conversion Loan
Customer Segment
Any Bangladeshi individual who has the means and capacity to repay the loan. In
specific terms the target customers should cover salaried executives of multinational
companies, middle to large size local corporate, Government officials, Officials
working in Semi-government, Autonomous and reputed Non-Government
Organization, International aid agencies and any tax paying businessmen of repute and
self-employed tax-paying individual having a reliable source of income
Purpose
For converting vehicles from carbon based fuel to Compressed Natural Gas system.
P a g e | 17 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Objective of the Customer Credit Scheme:
United Commercial Bank Limited started the Consumer Credit Scheme program with a view
to fulfill its benevolent institutional objectives through financing the middle class limited
income group.
To ensure the credit facility to the both middle class Limited income group and upper
class income group.
To improve the living standard of limited income group through financing in
purchasing necessary goods.
To participate in the socio-economic development of the country.
Collection Steps of United Commercial Bank Limited:
Days Past Due Collection Action
1-14 days Letter, Follow up and Persuasion over phone
15-29 days 1st Remainder Letter and first step follows
30-44 days 2nd
Reminder letter
single visit of credit officer
45-59 days 3rd
Reminder letter
Group visit by team members
Follow up over phone
Letter to Guarantor, Employer
Reference all above effort follows
Warning of legal action by next 15 days
60-89 days Call up of loan
Final Reminder and serve legal notice
Legal proceeding begins
Repossession starts
90 and above days Telephone calls
Legal proceeding continues
Collection effort continues by officer & agents
Letter to different Banks and Associations
P a g e | 18 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
About The Research:
Consumer Credit (Retail Banking) is one of the vital functions for any bank. Lion share
revenues of banks comes by meeting the financial requirements of the SMEs and corporates.
Credence product by nature, financing services by banks to commercial institutions are
difficult to measure. While demand for, and supply of funds in the money market intersect at a
point that makes most of the financial service-availing institutions indifferent for selection of
bank. In this scenario a stronger bank has an edge. Simultaneously, banks in recent times have
taken fostering of relationship with present clients with great care, as it is inexpensive and
profitable for the business than attracting new ones and establishing relationship.
United Commercial Bank Ltd. is among the first banks that took relationship banking
seriously through ―Happy Banking‖ campaign, dated back in 2007. The bank offers
innumerable flexible options and benefits to their clients along with emphasizing professional
bonds between bank employees and clientele.
An award winning service research journal on relationship benefits and quality for service-
oriented business authored by Hennig-Thurau, Gwinner and Gremler (2002) has been the
backbone of my research. The journal encompasses a multivariate study that probes several
aspects of relationship between service provider and customers with thorough analysis on this
field of study. With assumption that the structural equation model devised by the author to be
exhaustive, outcomes from processing fieldwork data will lead to the most imperative aspects
the bank needs to focus on for improvement to cater their customers better.
The Credit Department (Retail Banking) policy of UCB is prepared in line with the guidelines
of Bangladesh Bank to handling it in a disciplined way. Credit Department plays a very
important role in bank as they evaluate the risk and take decision about giving loan to the
customers. In this report I have tried to study the literatures instruments about customer
satisfaction process and also the credit operation of United Commercial Bank Limited.
P a g e | 19 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Statement of the Problem:
Credit risk and customer dissatisfaction corresponds to potential financial loss as a result of
customer‘s inability to honor the terms and conditions of credit facility. This report will
mainly focus on managing credit risk by providing proper satisfaction towards the customers
as well as achieving organizations profit.
Purpose of the Study:
The purpose of the internship program is to familiarize students with real market situation and
compare it with bookish concept. The main purpose of the study is to have an assessment
about Consumers Credit Schemes of United Commercial Bank Limited and customer
satisfaction gaining from those credit schemes.
Major purpose of the study are-
To examine customer satisfaction towards UCB credit schemes.
Find out the relationship between service quality, Updated products, charges and
employee behavior about in the context of customer satisfaction.
To find out the real picture of UCB in terms of deposits and other financial products.
Establishing favorable employee attitude to provide better satisfaction towards
customers.
Developing new products and ideas to create brand awareness as well as for proper
customer satisfaction.
P a g e | 20 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Review of Literature:
In this research I have go through some variables which must be needed to create best
customer satisfaction in United Commercial Bank Limited.
Service Quality:
Research has indicated that service quality has been increasingly recognized as a critical
factor in the success of any business (Parasuraman et al., 1988) and the banking sector in this
case is not exceptional. Service quality has been widely used to evaluate the performance of
banking services (Cowling and Newman, 1995). The banks understand that customers will be
loyal if they receive greater value than from competitors (Dawes and Swailes, 1999) and on
the other hand, banks can earn high profits if they are able to position themselves better than
their competitors within a specific market (Davies et al., 1995). Therefore, banks need focus
on service quality as a core competitive strategy (Chaoprasert and Elsey, 2004). Moreover,
banks all over the world offer similar kinds of services, and try to quickly match their
competitors‘ innovations. It can be noted that customers can perceive differences in the
quality of service (Chaoprasert and Elsey, 2004). Moreover, customers evaluate banks‘
performance mainly on the basis of their personal contact and interaction (Gronroos, 1990).
Moreover, many scholars agree that service quality can be decomposed into two major
dimensions (Gronroos, 1984; Lehtinen and Lehtinen, 1982). The first is referred to by
Zeithaml et al. (1985) as ―outcome quality‖ and the second by Gronroos (1984) as ―technical
quality‖. However, the first dimension is concerned with what the service delivers and on the
other hand; the second dimension is concerned with how the service is delivered: the process
that the customer went through to get to the outcome of the service.
The study of McCleary and Weaver (1982) indicated that good service is defined on the basis
of identification of measurement behaviours that are important to customers. The study of
Newman and Cowling (1996) reports that two British banks used the SERVQUAL model and
this model improved quality of service, as well as both banks enjoying substantial increases in
profit. Moreover, Zeithaml (2000) also found evidence about the influences of service quality
on profits and Heskett et al. (1997) argued that a ―direct and strong‖ relationship exists among
service quality, customer satisfaction and profitability.Vimi and Mohd (2008) undertook a
study of the determinants of performance in the Indian retail banking industry based on
perception of customer satisfaction.
The finding of the study reinforces that customer satisfaction is linked with performance of
the banks. Berry (1980) along with Booms and Bitner (1981) argue that, due to intangible
nature of services, customer use elements associated with the physical environment when
evaluating service quality. Levitt (1981) proposes that customers use appearances to make
judgements about realities. Hostage (1975) believes that a service firm‘s contact personnel
comprise the major determinants of service quality, while Lewis and Booms (1983) propose
P a g e | 21 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
that service quality resides in the ability of the service firm to satisfy its customer needs i.e.
customer satisfaction.
Updated Products:
From the beginning of the 1990s until the middle of July 2007, change in the banking industry
was driven by the twin forces of deregulation and technological change. Updated products
refer to the use of information and communication technology by banks to provide services
and manage customer relationship more quickly and most satisfactorily (Charity-Commission,
2003). Burr (1996) describes it as an electronic connection between the bank and the
customer in order to prepare, manage and control financial transactions. Electronic banking
according to Al-Abed (2003) is an umbrella term for the process by which a customer may
perform banking transactions electronically without visiting a brick-and-mortar institution.
Lustsik (2004) describes electronic banking as a variety of the following platforms: Internet
banking, telephone banking, TV-based banking, mobile phone banking, and PC banking.
Banks customers‘ taste and desire have begun to raise the stakes of expectation of exceptional
services. Customers want to transact their banking transactions at any time and location
convenient for their life-style. They want to pay their regular household bills, buy and sell
stocks and shares (Carse, 1999).
Historically, banks have taken the attitude that they will provide customers with the services
and products that they, the banks, wish to provide. In order to survive both from domestic and
the increasing level of global cross-border competition, banks need to change their process of
servicing their customers. Firstly, to capture and retain the most profitable customers and
secondly to redirect unprofitable customers into service channels which can limit the costs and
maximise potential revenues (Mols, 1998).
Charges:
Data from private vendors indicate that average fees for insufficient funds, overdrafts, returns
of deposited items, and stop payment orders have risen by 10 percent or more since 2000,
while others, such as monthly account maintenance fees, have declined. During this period,
the portion of depository institutions income derived from noninterest sources—including fees
on savings and checking accounts—varied but increased overall from 24 percent to 27
percent. Changes in both consumer behavior, such as making more payments electronically,
and practices of depository institutions are likely influencing trends in fees, but their exact
effects are unknown.
Employee Behavior:
Employees are key stakeholders in value delivery and brand/supplier success, and they
frequently represent the difference between positive experiences or negative experiences and
whether customers stay or go. It has been found that employee commitment and advocacy
P a g e | 22 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
behavior have a direct and profound relationship to the loyalty of customers, and also to
corporate sales and profitability.
Work environment influences the way how employees feel about their company, boss, and co-
workers, and they impact the productivity, satisfaction, and intent to turnover of the workers
(Ferris & Kacmar, 1992). Drory and Romm (1988) In fact, the Drory and Romm study found
that employees‟ perception of employee behavior are dependent upon circumstances and that
as circumstances or elements of a situation vary so do perceptions regarding the politics.
Gerald.R.Ferris, Dwight.D.Frink (1996) studied Politics as a potential source of stress in the
work environment.
Customer Satisfaction:
According to the disconfirmation paradigm, customer satisfaction is understood as the
customer‘s emotional or feeling reaction to the perceived difference between performance
appraisal and expectations (e.g., Oliver 1980; Rust, Zahorik, and Keiningham 1996; Yi 1990).
Several studies provide evidence for the significant influence of satisfaction on loyalty and
word-of-mouth communication. However, more recent studies suggest the impact of
satisfaction on customer loyalty is rather complex (e.g., Bloemer and Kasper 1994; Oliva,
Oliver, and MacMillan 1992; Oliver 1999; Reichheld 1993; Stauss and Neuhaus 1997).
In their service profit chain model, Heskett et al. (1994) proposed customer loyalty to be the
result of a complex causal chain. Although satisfaction is modeled as the only immediate
antecedent of loyalty, other key drivers of loyalty include service quality, employee loyalty,
employee satisfaction, and internal service quality. Several (but not all) of the relationships
hypothesized in the service profit chain model have been confirmed empirically by Loveman
(1998).
Relationship quality is generally considered to be composed of satisfaction and commitment.
Drawing on Hennig-Thurau and Klee (1997), we postulate satisfaction to positively influence
commitment. A high level of satisfaction provides the customer with a repeated positive
reinforcement, thus creating commitment-inducing emotional bonds. In addition, satisfaction
is related to the fulfillment of customers‘ social needs, and the repeated fulfillment of these
social needs is likely to lead to bonds of an emotional kind that also constitute commitment
(Hennig-Thurau and Klee 1997).
The relevance of satisfaction in gaining loyal customers and generating positive word-of-
mouth is largely undisputed (e.g., Anderson and Sullivan 1993; Oliver 1996). Indeed, studies
have found satisfaction to be a (and often the) leading factor in determining loyalty (e.g.,
Anderson and Fornell 1994; Rust and Zahorik 1993). Similarly, satisfaction has been
identified as a key driver in the generation of (positive) customer word-of-mouth behavior
(e.g., File, Cermak, and Prince 1994; Yi 1990).
P a g e | 23 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Conceptual Framework:
The framework for the projected study is presented below:
Figure 1: Framework of Research Variable and their Relationships
Service Quality
Updated Products
Charges
Employee Behavior
Customer Satisfaction
Independent Variables
Dependent Variable
P a g e | 24 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
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Research Questions and Hypothesis:
RESEARCH QUESTIONS
Q1: Does service quality effect customer satisfaction in the context of UCB?
Q2: Does updated products effect customer satisfaction in the context of UCB?
Q3: Does charges effect customer satisfaction in the context of UCB?
Q4: Does employee behavior effect customer satisfaction in the context of UCB?
HYPOTHESIS
H1: Service quality effect customer satisfaction in the context of UCB.
H2: Updated products effect customer satisfaction in the context of UCB.
H3: Charges effect customer satisfaction in the context of UCB.
H4: Employee Behavior effect customer satisfaction in the context of UCB.
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Methodology:
Research design:
The projected framework (Figure: 1) represented the outline and arrangement of relationships
among the set of considered variables. The purpose of the study was to measure correlations
among variables. That‘s why it is a causal studies. More specifically it is an ex post facto
study because this study involves after the fact report on what happened to the measured
variables. With the above findings in the literature, this study aims to inspect the possible
relationships among service quality, updated products, charges, employee behavior and
customer satisfaction with organizational performance.
Sampling:
Sample unit:
In this study as a researcher I found some factor really that whether effects on
customer satisfaction or not. To get proper satisfaction idea from customers i targeted the
population who has an experience dealing with UCB. Our sampling technique will be simple
random sampling under the probability sampling method so that we can select randomly from
our existing customers. Cooper and Schindler (2003) stated that in this type of probability
sampling method each population element is known and has an equal chance of selection.
Sample Size:
Sample size relates to how many people to pick for the study. For this kind of study
researcher need to do select a sample size. I picked both male and female from different ages
and professional back ground and the sample size was N=40.The study will be conducted only
in some branches of Dhaka city due to time and budget constraints. Our research is a
Quantitative Research.
Sample Procedure:
Their as a researcher i used probability sampling to collect information. We have used
purposive probability sampling to know the characteristics or experiences, attitudes,
perception of participants. Here i selected participants randomly from UCB and give them the
questionnaire so that we can know about all those characteristics.
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INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Instruments:
Questionnaires will permit us to gather information that cannot be found elsewhere from any
secondary information such as books, newspapers and internet resources. So the questionnaire
survey is the most successful method for this study to collect the data. We used a structured
questionnaire. In a structured questionnaire, quantitative data is required. Because of this
reason, the researcher will use questionnaire. According to interval scale the response choices
will be arranged. There are Five (5) response choices. Five-point of Liker type scales were
used in all measures. This are-
Data Collection, Types of Data and Sources:
There are two types of data collection Primary Data & Secondary Data. Primary Data are
those collected for the first time .Secondary Data are those which have already been collected
and analyzed by someone else. In the context of UCB, as researchers I used primary data to
examine the research problem and verify hypothesis. As a researcher I use questionnaire
method to collect data from the primary sources. Because this research work is exclusively
carry out for Bank. In this study mostly primary data will be used to draw a recommendation.
We will confirm our respondents that all the data collected from them will be kept
confidential and exclusively used for academic purposes and their individual identity would
be kept undisclosed individuals, each taking Twenty Five (25) questionnaires to be filled out
by respondents from the devised sample. While filling out the questionnaires the researchers
assisted the respondents to get a better idea of their actual behaviors to minimize the margin
of error.
1 = Strongly Disagree
2= Disagree
3= Neither Disagree nor Agree
4= Agree
5= Strongly Agree
P a g e | 27 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
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Data Analysis:
Frequencies analysis:
The sample consists of 32 male and 08 female customers. 80% of male and 20% of female
customers participates in this survey which is shown at below.
Among the responding 08 customers age was between 15-25 years, 12 customers age was
between 26-35 years, 15 customers age was between 36-45 years and 5 customers age was
between 46 and above which is shown below.
There are four income ranges. 15% respondents were in 15000-20000 taka range, 35%
respondent was in the range of 21000-30000 taka, 27.5% respondent was in the range of
31000-40000 and 22.5% respondent was in the range of more than 41000 taka.
P a g e | 28 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Crosstabs Analysis
We survey 40 respondents with different gender, age and income. The resonance rate is 100%.
Table shows that between 15000-20000 income ranges there are 4 male and 2 female. Again
between 21000-30000 income ranges there are 11 male and 3 female. In 31000-40000 income
ranges there are 9male and 2 female. And in the income of above 41000 ranges there are 8
male and 1 female.
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Correlation analysis
Correlation analysis was conducted on all variables to explore the relationship between
variables. The bivariate correlation procedure was subject to a two tailed of statistical
significance at two different levels highly significant (p<.01) and significant (p<.05).
According to Nadim Jahangir the classification of correlation coefficient is as follows:
0.0 to 0.2 Very weak, negligible
0.2 to 0.4 Weak, low
0.4 to 0.7 Moderate
0.7 to 0.9 Strong, high, marked
0.9 to 1.0 Very strong, very high
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Relationship between Service quality and customer satisfaction:
According to Spearman correlation coefficient between service quality and customer
satisfaction is 0.638 shows positive relationship between two variables. Now we have to test r
for other calculations or comparisons.
We know,
√
= 5.1074
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we cannot accept the null hypothesis as T value don‘t falls in (-
2.021 to +2.021) and accept alternative hypothesis.
So according to Spearman Correlation test there is a relationship between service quality and
customer satisfaction, which means that service quality effect customer satisfaction in context
of UCB.
P a g e | 31 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
According to Pearson correlation coefficient between service quality and customer
satisfaction is 0.656 shows positive relationship between two variables. Now we have to test r
for other calculations or comparisons.
We know,
√
= 5.3741
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we cannot accept the null hypothesis as T value don‘t falls in (-
2.021 to +2.021) and accept alternative hypothesis.
So according to Pearson Correlation test there is a relationship between service quality and
customer satisfaction, which means that service quality effect customer satisfaction in context
of UCB.
P a g e | 32 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
According to Kendall's tau_b correlation coefficient between service quality and customer
satisfaction is 0.504 shows positive relationship between two variables. Now we have to test r
for other calculations or comparisons.
We know,
√
= 3.5971
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we cannot accept the null hypothesis as T value don‘t falls in (-
2.021 to +2.021) and accept alternative hypothesis.
So according to Kendall's tau_b Correlation test there is a relationship between service
quality and customer satisfaction, which means that service quality effect customer
satisfaction in context of UCB.
P a g e | 33 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Relationship between Updated products and customer satisfaction:
According to Spearman correlation coefficient between updated products and customer
satisfaction is 0.616 shows positive relationship between two variables. Now we have to test r
for other calculations or comparisons.
We know,
√
= 4.8204
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we cannot accept the null hypothesis as T value don‘t falls in (-
2.021 to +2.021) and accept alternative hypothesis.
So according to Spearman Correlation test there is a relationship between updated products
and customer satisfaction, which means that updated products effect customer satisfaction in
context of UCB.
P a g e | 34 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
According to Pearson correlation coefficient between updated products and customer
satisfaction is 0.587 shows positive relationship between two variables. Now we have to test r
for other calculations or comparisons.
We know,
√
= 4.4695
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we cannot accept the null hypothesis as T value don‘t falls in (-
2.021 to +2.021) and accept alternative hypothesis.
So according to Pearson Correlation test there is a relationship between updated products and
customer satisfaction, which means that updated products effect customer satisfaction in
context of UCB.
P a g e | 35 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
According to Kendall's tau_b correlation coefficient between updated products and customer
satisfaction is 0.487 shows positive relationship between two variables. Now we have to test r
for other calculations or comparisons.
We know,
√
= 3.4372
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we cannot accept the null hypothesis as T value don‘t falls in (-
2.021 to +2.021) and accept alternative hypothesis.
So according to Kendall's tau_b Correlation test there is a relationship between updated
products and customer satisfaction, which means that updated products effect customer
satisfaction in context of UCB.
P a g e | 36 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Relationship between charges and customer satisfaction:
According to Spearman correlation coefficient between updated products and customer
satisfaction is -0.208 shows negative relationship between two variables. Now we have to test
r for other calculations or comparisons.
We know,
√
= -1.3108
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we can accept the null hypothesis as T value falls in (-2.021 to
+2.021) and reject alternative hypothesis.
So according to Spearman Correlation test there is no relationship between charges and
customer satisfaction, which means that charges is not effect customer satisfaction in context
of UCB which reflect that customers are not satisfied by charges in UCB.
P a g e | 37 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
According to Pearson correlation coefficient between charges and customer satisfaction is -
0.018 shows negative relationship between two variables. Now we have to test r for other
calculations or comparisons.
We know,
√
= -0.1109
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we can accept the null hypothesis as T value falls in (-2.021 to
+2.021) and reject alternative hypothesis.
So according to Pearson Correlation test there is no relationship between charges and
customer satisfaction, which means that charges is not effect customer satisfaction in context
of UCB which reflect that customers are not satisfied by charges in UCB.
P a g e | 38 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
According to Kendall's tau_b correlation coefficient between charges and customer
satisfaction is -0.155 shows positive relationship between two variables. Now we have to test
r for other calculations or comparisons.
We know,
√
= -0.9671
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we can accept the null hypothesis as T value falls in (-2.021 to
+2.021) and reject alternative hypothesis.
So according to Kendall's tau_b Correlation test there is no relationship between charges and
customer satisfaction, which means that charges is not effect customer satisfaction in context
of UCB which reflect that customers are not satisfied by charges in UCB.
P a g e | 39 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Relationship between employee behavior and customer satisfaction:
According to Spearman correlation coefficient between employee behavior and customer
satisfaction is 0.352 shows positive relationship between two variables. Now we have to test r
for other calculations or comparisons.
We know,
√
= 2.3182
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we cannot accept the null hypothesis as T value don‘t falls in (-
2.021 to +2.021) and accept alternative hypothesis.
So according to Spearman Correlation test there is a relationship between employee behavior
and customer satisfaction, which means that updated products effect customer satisfaction in
context of UCB.
P a g e | 40 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
According to Pearson correlation coefficient between employee behavior and customer
satisfaction is 0.549 shows positive relationship between two variables. Now we have to test r
for other calculations or comparisons.
We know,
√
= 4.0490
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we cannot accept the null hypothesis as T value don‘t falls in (-
2.021 to +2.021) and accept alternative hypothesis.
So according to Pearson Correlation test there is a relationship between employee behavior
and customer satisfaction, which means that updated products effect customer satisfaction in
context of UCB.
P a g e | 41 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
According to Kendall's tau_b correlation coefficient between employee behavior and
customer satisfaction is 0.265 shows positive relationship between two variables. Now we
have to test r for other calculations or comparisons.
We know,
√
= 1. 6941
Hypothesis testing:
Ho: null hypothesis = no relationship
Ha: alternative hypothesis = relationship
At 5% level of significance we can accept the null hypothesis as T value falls in (-2.021 to
+2.021) and reject alternative hypothesis.
So according to Kendall's tau_b Correlation test there is no relationship between employee
behavior and customer satisfaction, which means that employee behavior is not effect
customer satisfaction in context of UCB which reflect that customers are not satisfied by
behavior of employees in UCB.
P a g e | 42 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Reliability Analysis:
The reliability of a scale that predicts a variable should be measured in order to see whether it
actually affects the dependent variable. Reliability is the extent to which measurement of
particular measure of particular test are repeatable. If the reliability of scale for any particular
variable is below .5 then it should be deemed unacceptable. The most highly recommended
measure of internal consistency is provided be cronbach‘s Alpha (α) as it provides a good
reliability estimate in most situations. 50-.60 coefficient or cronbach‘s alpha is sufficient. In
this study the coefficient alpha for different constructs were computed using the reliability
procedure in SPSS (version 17.0).
The cronbach‘s alpha of service quality is 0.811 which means it is highly reliable.
Updated products are also fall to the reliability test because cronbach‘s alpha is 0.811. It is
between the standard, so it is reliable.
P a g e | 43 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
The reliability of charges is 0.784 which is between the standard, so it is reliable.
Again the cronbach‘s Alpha (α) of employee behavior is 0.625 which is reliable.
Again the cronbach‘s Alpha (α) of customer satisfaction is 0.800 which is reliable.
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Significance of the Study:
Business significance:
Our research hopefully will help various corporations to be concerned about the present
condition of UCB as a bank. Because a trend has been changed over the past few years,
customers‘ attitude toward business products or service also changed. So, sticking with the
obsolete business plan will no longer be effective for making profit. Various law suits has
already been posted against MNC‘s as well as national companies. So it would be really
beneficial for the company s to change their policy and get concerned about the customer
satisfaction rather than making profit .Our study reveals the relationship between the customer
satisfaction with the service quality, updated products, charges and employee behavior
respectively: anyone who will go through these, get crystal clear idea about the significance of
customer satisfaction.
Academic significance:
We know, now a day research is also used for academic purpose. While any student is going
for making any new business plan they are must needed to go for a research. Thus faculties
also need to study and implement those studies (researchers) to their students so that it can
help the students for their study. As my research is based on customer satisfaction this
research may helpful for students who are keen to know about UCB recent position in front of
customers. Students will also get the knowledge about current position of UCB as a private
bank in Bangladesh through this research.
Implication for future research:
As i mention earlier, our research will help various corporations thus far, it could also be
effective and efficient analysis for the future researchers. I analysis various kinds of data that
is given in various journals, newspapers, govt.bureaus and websites so, future researchers
would get the information about the scale that has been used in my study and hypothesis
testing will give them an idea whether there is a relationship between our variables or not and
reliability tests will give an information whether our question adjust with the variable.
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Recommendations:
United Commercial bank Limited has an efficient and excellent credit management
team and performing with great expertise and care. There are some limitations that can
be overcome by some measures to make the performance outstanding. There are some
suggestions for United Commercial banks consumer credit management team from my
observation.
Proper consumers‘ credit budget for each branch should be established. A budget is a
record that shows the flow of money in and out of the Branch. Budget is necessary
because it gives customers a clear view of the branch Consumers‘ Credit.
United Commercial Bank training institute should introduce training program on
Consumer Credit of their executives to provide unique solution for their financial
situation.
Strengthening the Marketing ability. The present marketing ability to pursue the
consumers is not so strong. So UCBL should increases the promotion activities as
possible.
UCBL should develop short procedure for taking the consumer credit loan. The
processing time for taking consumer credit scheme should simple as possible.
Introducing the new feature of product may attract the customer to take loan from the
UCBL.
Introducing the appropriate client judgment system: the existing client judgment
system for consumer evaluation is not so rigorous. The system should be developed.
Stopping the diversion of loan: the major portion of the loan goes to the pocket of
those who are wealthy. This means that the targeted people are not getting loan. The
diversion of loan is also prevailing. For example- the consumer taking loan by
showing a quotation of furniture but he is not buying that item. So the monitoring
system should be improved.
Credit officer measures the risk associated with the credit facility. He should not be
liberal in this respect; he should strictly follow the credit evaluation principle followed
by the bank. The analysis should contain information about the borrower, credit
purpose, credit repayment sources, details of collateral security with valuation and
guarantee.
The ATM facility of UCBL is weak than other competitor banks so they should try to
improve this facility as soon as possible.
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INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Conclusion:
As an internee of UCBL. I have truly enjoying my internship from the learning and
experience viewpoint. I am confident that this three months internship program at UCBL will
definitely help me to realize my further carrier in the job market.
As there are lots of local and foreign banks in Bangladesh the UCBL is promising commercial
Bank among them. In this competitive market UCBL has to compete not only the others
commercial banks but also with the public Bank. UCBL is more capable of contributing
towards economic development as compared with other bank. UCBL invested more funds in
export and import business. It is obvious that the right thinking of this bank including
establishing a successful network over the country and increasing resources will be able to
play a considerable role in the portfolio of development. Success in the banking business
largely depends on effective lending. Less the amount of loan losses, the more the income will
be from Credit operations the more will be the profit of the UCBL Limited and here lays the
success of Credit Financing.
During the course of my practical orientation I have tried to learn the practical banking
activities to realize it with my theoretical knowledge, which I have greathearted and going to
acquire from various courses of my BBA program.
P a g e | 47 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
References:
Jahangir, Nadim. (2003). Perceptions of Power: A Cognitive Perspective of
Natinalised Commercial Banks in Bangladesh, Dhaka: SUBARNA.
http://www.ucbl.com
Several Booklets from UCB
Seeral Newsletter from UCB
Credit Operational Manual of UCB
Chowdhury, A.H.M., Nurul Islam and T.A. Chowdhury (1992). ―Financial
liberalization in Bangladesh, Conceptual Issues and Impact on Banking financial
institutions‖ Bank Parikrama, Vol 18, No.3 &4, Sep. & Dec. P.59.
Howard R. Goldsmith, A guide To Growth, Profits and Market share, 2004
Englewood Cliffs, NJ: Prentice-Hall
Bagozzi, R. P., Tybout, A. M., Craig, C. S., & Sternthal, B. (1979). The construct
validity of the tripartite classification of attitude. Journal of Marketing Research, 16,
88 – 95.
Breckler, S. J. (1984). Empirical validation of affect, behaviour and cognition as
distinct attitude Ethical Consumer Research Association: About practice: A review
and recommended two-step approach. Psychological Bulletin, 103, 411 – 423.
Bangladesh Bank. (2010). Schedule Bank Statistics, Various issues. Dhaka,
Bangladesh Bank.
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INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
Appendix
QUESTIONNAIRE
Hello!! We are conducting a survey to find out information regarding ―Consumer Credit
Schemes and Consumers satisfaction of United Commercial Bank Ltd (UCBL).”There is
no right or wrong answer. All information will be used for the purpose of this specific
research. This research is conducted for academic purposes only. So please do not hesitate to
answer. Your information will be kept confidential.
Personal Information
Male Female
Age: 15-25
26-35
36-45
46 and above
Occupation ________________
Income per month:
15000-20000 Taka
21000-30000 Taka
31000-40000 Taka
41000 and above
P a g e | 49 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
1= Strongly Disagree 4= Agree
2= Disagree
3= Neither Disagree nor Agree 5= Strongly Agree
Service quality:
1. UCBL is an excellent bank to have banking services. 1 2 3 4 5
2. The procedure of our services and the transactions are clear to
you.
1 2 3 4 5
3. You feel safe dealing with us. 1 2 3 4 5
4. The service quality should be improved. 1 2 3 4 5
5. UCBL‘s services are up to mark. 1 2 3 4 5
Updated Products:
6. Products are up to date 1 2 3 4 5
7. The installment policy is easy. 1 2 3 4 5
8. External appearance of bank is good. 1 2 3 4 5
9. Availability of ATM in several locations. 1 2 3 4 5
Charges:
10. Compared to our quality, we charges extra. 1 2 3 4 5
11. We do not have any hidden charges. 1 2 3 4 5
12. Sometimes you get services at cheaper price than our listed
rate.
1 2 3 4 5
13. The time limit to repay the payables should be increased. 1 2 3 4 5
14. The interest rate charged on credit scheme is high. 1 2 3 4 5
P a g e | 50 Consumer Credit Schemes and Consumer Satisfaction of United Commercial Bank Limited
INDEPENDENT UNIVERSITY, BANGLADESH (IUB)
15. UCBL charges higher amount for down payment compare to
others.
1 2 3 4 5
Employee Behavior:
16. You feel discomfort in the transactions you do with this bank. 1 2 3 4 5
17. We meet your expectation level. 1 2 3 4 5
18. You have confidence on our work. 1 2 3 4 5
19. Employees are skilled and efficient. 1 2 3 4 5
20. Employees provide fast and efficient service. 1 2 3 4 5
Customer Satisfaction:
21. In general you are satisfied with services of UCBL. 1 2 3 4 5
22. You would like to deal with us in future. 1 2 3 4 5
23. You will tell others about us. 1 2 3 4 5
24. You are satisfied with the online customer service of the
UCBL.
1 2 3 4 5
25. With UCBL your purpose is properly fulfilled. 1 2 3 4 5