“Consumer Credit Scheme”

A comparative study on
SouthEast Bank Limited & other Private
Commercial Banks

SOUTHEAST BANK LIMITED

A Bank With Vision
 “Consumer Credit Scheme”
A comparative study on
South East Bank Limited & other Private
Commercial Banks

Prepared for:

Mr. Bakhtear Uddin TAlukdar

Faculty Advisor & Lecturer

Prepared by:

Muhammad Jakir Hossain

Roll#186
MBA 7th Batch

Department of Finance
University of Dhaka
May 14, 2008
May 14, 2008

Mr. Bakhtear Uddin Talukdar,

Lecturer,
Department of Finance,
University of Dhaka.

Subject: Submission of Internship Report.

Dear Sir,
I am very delighted to submit internship report on “Consumer Credit Scheme: A
comparative study on Southeast Bank Limited & other Private Commercial Banks”.

While preparing this report, I have concentrated on Southeast Bank Limited and its
products of Consumer Credit Scheme. I have also tried to present a comprehensive
picture of Consumer Credit Scheme of the Commercial Banks operated in Bangladesh.
My main focus was on the comparison between the various products of Consumer credit
Scheme offered by Southeast Bank and the same products offered by other Banks.

Finally I would like to thank you for arranging me such an internship program where I
have got a practical knowledge of working environment. I hope my report will meet your
expectation.

Sincerely yours

Muhammad Jakir Hossain

Roll: 186
MBA 7th Batch
Department of Finance
University of Dhaka
 ACKNOWLEDGEMENT

I am very much grateful to our honorable faculty Mr. Bakhtear Uddin Talukdar, Lecturer,
Department of Finance, University of Dhaka for his kind cooperation and valuable
guidance in the preparation of this report. Also my appreciation goes to the management
of Southeast Bank Limited for giving me the opportunity to work in that reputed
organization.

I would like to thank Mr. Mustafizur Rahman, Senior Vice President and Head of
Training Institute, Southeast Bank Limited, Dhaka, for giving me the opportunity to work
in his office. I would also like to express my gratitude to Mrs. Sufia Begum, Officer,
Southeast Bank Limited, for supervising me at the time of my internship attachment with
her best effort.

Moreover I am very much grateful to all officials of Southeast Bank Limited. Special
thanks to Mrs. Rakeya Begum, Mr. Anwar Hossain, Mr. Jubaer Ahmed for their kind
cooperation. This report would not be possible without the cooperation of officials of all
Banks I have visited during the survey. So my heartiest appreciation goes to those
officials.
 Table of Contents
Executive Summary x
1. Introduction 1
1.1 Origin of the report 1
1.2 Objectives 2
1.3 Scope 2
1.4 Methodology 2
1.5 Limitations 2
2. An Overview of Southeast Bank Limited 3
2.1 Introduction 3
2.2 Vision 4
2.3 Mission 4
2.4 Southeast Bank’s Business Portfolio 4
2.5 Management of the Bank 7
2.6 Products and Services 7
2.7 New products and Services 8
3. Consumer Credit Scheme of Southeast Bank Limited 17
3.1 Introduction 17
3.2 Objectives of the scheme 17
3.3 Eligibility of the customer 18
3.4 Discourage list of the customer 18
3.5 Products of Southeast Bank Limited 19
3.6 Credit Limit, Period of Loan, Down payment 19
3.7 Interest and other charges 19
3.8 Application procedure 20
3.9 Processing of applications 20
3.10 Documents to be obtained 21
3.11 Mode of repayment 21
3.12 Other Conditions 21
3.13 Credit risk management
3.14 Monitoring 23
3.15 Collection steps 24
3.16 Loan Amortization 24
3.17 Amortization Schedule 25
3.18 Prepayment 25
3.19 Judgment process of credit proposal under the CCS 25
4. Performance of Southeast Bank Limited in case of CCS
4.1 Introduction
4.2 CCS loan disbursement
4.3 Portion of CCS loan in the total Credit portfolio
4.4 Recovery of CCS loan amount during the last five years by different banks
4.5 CCS deposit ratio
5. A comparison between the products of CCS of Southeast bank and the 30
products of CCS of Other banks
5.1 Introduction 30
5.2 Household Loan 30
5.2.1 Amount of Credit Offer 31
5.2.2 Rate of Interest 32
5.2.3 Down payment 33
5.2.4 Maximum time to repay 34
5.2.5 Application fee 35
5.2.6 Service and other charges 35
5.3 Car loan 37
5.3.1 Amount of Credit Offer 38
5.3.2 Rate of Interest 39
5.3.3 Down payment 40
5.3.4 Maximum time to repay 41
5.3.5 Application fee 42
5.3.6 Service and other charges 42
5.4 Education loan 43
5.4.1 Amount of Credit Offer 44
5.4.2 Rate of Interest 45
5.4.3 Down payment 46
5.4.4 Maximum time to repay 47
5.4.5 Application fee 48
5.4.6 Service and other charges 48
5.5 Wedding loan 49
5.5.1 Amount of Credit Offer 49
5.5.2 Rate of Interest 50
5.5.3 Down payment 51
5.5.4 Maximum time to repay 52
5.5.5 Application fee 53
5.5.6 Service and other charges 53
5.6 Travel loan 54
5.6.1 Amount of Credit Offer 54
5.6.2 Rate of Interest: 55
5.6.3 Down payment 56
5.6.4 Maximum time to repay 57
5.6.5 Application fee 58
5.6.6 Service and other charges 58
6. Findings 61
7. Conclusion and Recommendations 63
7.1 Conclusion 63
7.2 Recommendations 64
 List of Figures
Table 1: Amortization schedule
Table 2: CCS loan disbursement during the last five years 25
Table 3: Portion of CCS in the total credit portfolio
Table 4: Comparison of loan recovery success by different banks
Table 5: CCS deposit ratio over the years
Table 6: Maximum and Minimum loan offered by different banks in 31
Household loan
Table 7: The rate of interest of different banks on Household loan 32
Table 8: Down payment of different banks on Household loan 33
Table 9: Maximum time required to repay Household Loan 34
Table 10: Applications fee on Household loan 35
Table 11: Service and other charges of Household Loan 35
Table 12: Refinancing 36
Table 13: Maximum and Minimum loan offered by different banks in 38
Car loan
Table 14: The rate of interest of Car Loan offered by different banks 39
Table 15: Down payment of different banks on Car loan 40
Table 16: Maximum time required to repay Car Loan 41
Table 17: Application fee required for Car loan 42
Table 18: Service and other charges of different banks regarding Car 42
loan
Table19: Maximum and Minimum loan offered by different banks in 44
Education loan
Table 20: The rate of interest of Education loan offered by different 45
banks
Table 21: Down payment of different banks on Education loan 46
Table 22: Maximum time required to repay loan of Education 47
Table 23: Application fee required for Education loan 48
Table 24: Service and other charges of different banks regarding 48
Education loan
Table 25: The limit of Wedding loan for different banks 49
Table 26: The rate of interest of Wedding Loan offered by banks 50
Table 27: Down payment of different banks on Wedding loan 51
Table 28: Maximum time required to repay loan of Wedding 52
Table 29: Application fee required for Wedding loan 53
Table 30: Service and other charges of different banks regarding 53
Wedding loan
Table 31: Loan limit of different banks in Travel loan 54
Table 32: The rate of interest of Travel Loan offered by different 55
banks
Table 33: Down payment of different banks on Travel loan 56
Table 34: Maximum time required to repay the loan of Travel 57
Table 35: Application fee required for Travel loan 58
Table 36: Service and other charges of different banks regarding 58
Travel loan
List of Figures
Figure 1: CCS loan disbursement during the last five years
Figure 2: Portion of CCS loan in the total credit portfolio
Figure 3: Comparison of loan recovery by various banks
Figure 4: CCS deposit ratio of SEBL over the years
Figure 5: A comparison on Loan limit of household loan of different bank 31
Figure 6: A comparison of rate of interest on Household loan 32
Figure 7: A comparison of Down payment of different banks on Household loan 33
Figure 8: A comparison on time limit offered by various banks on Household loan 34
Figure 9: A comparison on Loan limit of Car loan of different bank 38
Figure 10: A comparison of rate of interest on Car loan 39
Figure 11: A comparison of Down payment of different banks on Car loan 40
Figure 12: A comparison on time limit offered by various bank on Education loan 41
Figure 13: A comparison on Loan limit of Education loan of different bank 44
Figure 14: A comparison of rate of interest on Education loan 45
Figure 15: A comparison on Down payment of different banks on Education loan 46
Figure 16: A comparison on time limit offered by various bank on Education loan 47
Figure 17: A comparison on Loan limit of Wedding loan of different bank 49
Figure 18: A comparison of rate of interest on Wedding loan 50
Figure 19: A comparison of Down payment of different banks on Wedding loan 51
Figure 20: A comparison on time limit offered by various bank on Wedding loan 52
Figure 21: A comparison on Loan limit of Travel loan of different banks 54
Figure 22: A comparison of rate of interest on Travel loan 55
Figure 23: A comparison of Down payment of different banks on Travel loan 56
Figure 24: A comparison on time limit offered by various banks on Travel loan 57