Presentation on

1. Presentation on CREDIT CARD OPERATIONS IN BANGLADESH A COMPERATIVE STUDY Course No: 501 Business Communication and Report Writing October 19,2009

2. CREDIT CARD OPERATIONS IN BANGLADESH A COMPERATIVE STUDY Submitted To DR. BANDANA SAHA Professor & Mr. A. N. K. MIZAN Lecturer Bangladesh Institute of Bank Management

3. Submitted By- MD. RASHEDUL ISLAM DEWAN: ID-409011 GAUTAM KUMAR BISWAS: ID-409013 RAYHAN -AL- ISLAM: ID-409015 ARIF MOHAMMAD ASHRAR HOSSAIN: ID-409017 TAPAS KUMAR PAUL: ID-409021

4. An overview of the report … We will cover - • Objective of the study, methodology that has been used, scope and limitation of the study. • About the credit card- give a preliminary idea. • Various card issuer of Bangladesh- their products and facilities. • Process of issuing Credit Card and how it works. • Give a brief compression between the Card Issuer and recommendation.

5. Reason for choosing the MATTER… The banking sector has flourished in our country with a hopeful prospect. Banks and other financial organizations are in a massive competition to provide better opportunities to their customers. Modern banking facilities are introducing by the banks to make the financial facilities convenient and available for 24 hours. Credit card facility is such an introduction. As students of Bank Management we are interested to have a clear understanding of the issue.

6. Objectives of the Report • To study the banking product - Credit Card; its history and features in Bangladesh perspective • To give an comparative understanding of the present status of Credit Cards in our country • To describe the detailed operational procedure of Credit Cards along with their associated benefits and fees.

7. Sources of Data To prepare this report, secondary data will be collected from different sources. The sources are: • Annual Reports of banks. • Different web-sites of the sample Banks. • Other published documents of the Banks

8. Limitations of the Report • Limitation of timewas one of the most important factors that shortened the present study. Due to time limitation many aspects could not discussed in the present study. • Confidentiality of datawas another important barrier that was faced during the conduct of this study. Every organization has their own secrecy that in not revealed to others. While collecting data, personnel did not disclose enough information for the sake of confidentiality of the organization. • Rush hours and business was another reason that acts as an obstacle while gathering data.

9. What is Credit Card? Credit card is an electronic based plastic card Mostly known as PLASTIC MONEY bears - an account number assigned to a cardholder . - with a credit limit that can be used to purchase goods and pay for services with a credit facility - without cash transactions from the appointed merchants of issuer of the card - card holder is subsequently billed by an issuer for repayment of availing credit facilities.

10. Physical Feature The credit card is - • a rectangular and looks like a phone card • a layered piece of hard plastic with holograms and security features • carries a strip of magnetic tape on the back which is loaded with electronic data including the card holder’s details

11. A Sample of a Gold Card How CREDIT CARD Looks Like…

12. A Brief Overview of Global Card Issuers Agents are- - Master card-from its beginning in 1956 , master card has evolved into a global payments franchise. - Visa card -Visa was founded by bank of America in 1960. Today, it has the largest worldwide card-base. - American express-American express (Amax), which introduced its green card in 1958, is the world’s largest issuer of debit & credit cards. - Diners club - The diners’ club card, the first debit & credit card, was introduced in 1950.

13. Credit Card in Bangladesh • ANZ Grindlays Bank commenced its credit card operations in Bangladesh in 1991 • Initially they introduce 29 merchants accepting Visa International and MasterCard International in the five star hotels and the few of the up market tourist oriented retailers. - in January 1997 , ANZ Grind lays Bank launched its local currency based credit cards from both visa and MasterCard and with increased 850 merchants in total

14. Credit Card in Bangladesh… - National Bank burst into the world of credit card in October 1997 It has Gold International and Gold Local and Silver International and Silver Local. - Prime Bank opened its business of credit card in November 1999 & quickly came across to the front line . The bank has Gold International and Gold Local and Silver International and Silver Local. - Now there are many banks LIKE Southeast bank, united commercial bank, one bank, Brac bank and so on provide CREDIT CARD..

15. Local & International Credit Card Issue by Banks- Prime Bank Limited National Bank Limited Brac Bank Limited Southeast Bank Limited UCB Bank Asia Limited HSBC Standard Chartered Bank Jamuna Bank Limited One Bank Limited And some other Commercial Bank Other Financial Institute Like - VANIK Duel Currency Credit Card Issued By Eastern Bank Limited SCB National Bank Limited Various Card Issuers in Bangladesh

16. Mainly Eight Category Master Card - Gold Local - Gold International - Silver Local - Silver International VISA Card - Gold Local - Gold International - Silver Local - Silver International Other Categories are -Visa Mini Card -Master Card Platinum Card -VISA Card Platinum Card -MasterCard Cricket Card Various category of the Credit Card Special Type Credit Card - SADIQ- from SCB - Duel Currency Credit Card

17. Features of CREDIT CARD… • Smart Shopping • Bearing Bank Account in the pocket • Auto Bills Pay facility • Installment Loan Facility • Rewards Program • Card Cheque • Free All Accident Insurance coverage • Safety Net Insurance Scheme • SMS Banking Facility • e-Statements

18. Players of the Credit Card Transaction System - Cardholder - Card-issuing bank - Merchant - Acquiring bank - Transaction Network - Affinity partner

19. Criteria to be a Card Holder A person has to fulfill some criteria to be a cardholder. Every bank has its own policy by which the qualification of an applicant is assessed. The criteria to be a Card Holder is- - Income range - Social status - Place of living - Education - Designation

20. Credit Limit given by Different Banks Local Silver Credit Card

21. Local gold credit card

22. Pre Issuance Activity - Compiling the credit card applications - Bank gathers necessary information regarding the applicants - Authenticity of the documents tested - Assessment of risk - Approve or refuse the application & determine the credit limit Post Issuance Activity The credit card operations that we normally refer are actually the post-issuance activities Card Issuing Process and Operations

23. How credit cards work? Credit cards are issued after an account has been approved by the credit provider . When a purchase is made – Cardholder indicates his/her consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid Payment is made by- - By allowing Electronic verification systems - By putting PIN Number - By getting verbal authorizations

24. Bill Pay System… • Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount used. • the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount used. • The credit provider charges interest on the amount used if the balance is not paid in full.

25. Grace period A credit card's grace period is the time the customer has to pay the balance before interest is charged to the balance. Grace periods vary, but usually range from 20 to 40 days depending on the type of credit card and the issuing bank. Usually, if a customer is late paying the balance, finance charges will be calculated and the grace period does not apply.

26. Card Transaction Steps … • The cardholder pays for the purchase The merchant • Submits the transaction to the acquirer The acquirer - • Verifies the credit card number, the transaction type and the amount with the issuer. • Reserves that amount of the cardholder's credit limit for the merchant.

27. Credit card issuers (banks) have several types of costs: Interest expenses Operating costs Fees charged to customers - Late payments or overdue payments - Charges that result in exceeding the credit limit , Mostly Known as Over Limit Fees - Returned cheque fees - payment processing fees - Annual fees - Exchange rate loading fees Cost, Benefits, and Detriments

28. Comparative Charges for Various BanksCredit card fees - Local silver card

29. Credit card fees - Local Gold card

30. Sector Wise Income Earned by the Card Issuer

31. Benefits of Credit Card… General User’s Benefit • Increases purchasing power. • Eases the transaction process (money less transaction). • Allows for obtaining credit facility for a definite period • Convenient to carry a plastic card rather than bundles of cash. • Lowering the risks of losing money • Usually issued for a year with renewal facility available. Merchant’s Benefits Credit card transaction is often more secure than other forms of payment, such as checks, because the issuing bank commits to pay the merchant the moment the transaction is authorized.

32. Unavailability- There are many business centers which do not give card facilities causing troubles to the cardholders. Security- Credit card security relies on the physical security of the plastic card as well as the privacy of the credit card number . Merchants often accept credit card numbersand give authorisation without additional verification may creat a scope of fraudal case. Limitations of Credit Card…

33. Our Views Credit card is a modern banking operation and arrangement which makes transaction convenient and secured. Government and Central Bank should take measures to form a common playground for the banks that are like to provide the card facility. This will be beneficial for the customers; the transactions will be more convenient which will result in a sustainable economic development of the country.

34. Question & Answer

35. Thank You…