Credit Card Market in Bangladesh

Credit Card Market in Bangladesh

Executive Summery

Owning a Credit Card is a basic right of a Qualified Financial Services Consumer. So in

today’s banking world there is no even any one bank without this modern but necessary

facility. It is a key operation of the new banking system. All the bank’s account holders are

now enjoying this facility with great appreciation.

All the banks are now trying to give the most hassle free and comfortable system to enjoy the

facility. These facilities are under E-Banking system. As the world is becoming like a village

now-a-days, people are also trying to the most attach with that, where credit card is a

beautiful symbol of it.

With this modern world we are walking. So there are also different types of credit card

facilities in our banking arena with various new and upgraded facilities. Here we try our best

to make a picture of their facilities.

Introduction

The 'credit card', though a new phenomenon in business and transaction arena which had

already won the hearts of millions across the globe, has set its foot in this part of the world

with its magical power and becoming a way of life here by offering its handy feature and

usefulness. In the advent of Information Technology and globalization, now shoppers need

not worry about money, all they need is willingness and a credit card to buy anything they

want at any places across the 'Global Village'. Worldwide access, acceptability and popularity

as well of credit cards have rose to such an extent that it is now posing a threat to theory of

old 'hard-cash' possession of currencies amid growing sense of insecurity worldwide. The

forward march of 'plastic money', the other name of the credit card, is so rapid that the whole

concept of monetary system needs immediate review as it has put a question mark in the very

existence of paper money.

The main benefit to each customer is convenience. Compared to debit cards and checks, a

credit card allows small short-term loans to be quickly made to a customer who need not

calculate a balance remaining before every transaction, provided the total charges do not

exceed the maximum credit line for the card. Credit cards also provide more fraud protection

than debit cards. Additionally, carrying a credit card may be a convenience to some

customers, as it eliminates the need to carry any cash for most purposes.

In our country credit card service is becoming more and more popular day by day.

Banking and Credit Card in Bangladesh

Financial sector of Bangladesh, like most developing countries, is dominated by banking

enterprises. The commercial banks in Bangladesh are catching up fast with the rest of the

world in terms of the use of the most advanced technologies. Starting from online banking

and SMS banking, we have also seen the arrival of innovative technologies like the mobile

ATM and many more. Credit/Debit Cards: Once a status symbol, the use of Credit/Debit or

ATM Cards has now become an absolute necessity for the urban folk of Dhaka and other

major cities of the country. With most of the commercial banks offering card services and

with relative ease of making one compared to earlier times, Cards have become immensely

popular for account holders ranging from university students to CEOs of corporate firms.

Former ANZ Grindlays Bank, now Standard Chartered Grindlays Bank, took a pioneering

role in introducing credit card in Bangladesh. It started acquiring Visa and Mastercard nearly

10 years back. In the first few years, its operational area was very limited and concentrated

only on the large hotels and restaurants. In 1997 the bank decided to launch full-scale card

operation and very realistically brought a wide range of people under its service system. It is

now giving a wide range of card services through multifarious quality facilities.

Some of banks providing Credit card facilities in our country:

Standard Chartered Grindlays Bank Bank Asia Ltd.

Exim Bank Ltd.

NCC Bank Ltd.

Janata Bank Ltd.

South East Bank Ltd.

Eastern Bank Ltd.

Marcantile Bank Ltd.

Eastern Bank Ltd.

National Bank

Premier Bank

BRAC Bank

City Bank

IFIC Bank

Dhaka Bank

Commercial Bank of Ceylon

Credit Card Market in Bangladesh

6. Credit Card Brands

Bank Credit Card BrandsBank Asia Ltd VISA Card

MasterCardCommercial Bank of Ceylon VISA CardExim Bank Ltd. VISA card,

Master card.NCC Bank Ltd VISA CardJanata Bank Ltd. Q-Cash Credit Card.Marcantile Bank Ltd. VISA CardNational Bank VISA CardPremier Bank VISA CardJamuna Bank Ltd. Q-Cash

VISA CardBRACBank VISA CardCity Bank VISA CardIFIC Bank VISA CardDhaka Bank VISA CardDutch Bangla Bank Lt. VISA Card

Master Card.

Form the above information we found that most of the Bank in our country provide Visa

card and Master card service. Some of the bank use Q-cash card service. Bt Visa and

Master card is much more popular.

2.Types of Credit Card offered

Bank Types of Credit CardBank Asia Ltd VISA Gold (Dual)

VISA Classic (Dual)VISA Local Gold VISA Local Classic or SilverVISA Tuntuni

Commercial Bank of Ceylon VISA Gold VISA Classic

Exim Bank Ltd. Gold Card – Limit above 50000 taka.Classic Card (Visa) – Limit bellows 50000 taka.Silver Card (master) – Limit bellow 50000 taka.

NCC Bank Ltd Classic LocalGold LocalGold International

Janata Bank Ltd. Only one credit card brand: Q-Cash which is a locally used credit card. No international credit card.

Eastern Bank Ltd. Simple Credit CardLife-Style CardCool CardEBL Travel Card

Marcantile Bank Ltd. Gold, Classic.Types of card – Local, International Dual currency card.

BRAC Bank VISA Classic : LocalVISACold: LocalVISA Clssic: Dual Universal Classic CardVISA Gold: Dual/ Universal Gold Card

City Bank VISA Local ClassicVISA Classic DualVISA Gold LocalVisa Gold Dual

IFIC Bank VISA Classic LocalVISA Gold LocalVISA Classic InternationalVisa Gold International

Dhaka Bank Dual Gold (International )Dual Classic (International )Local Gold (Only in Bangladesh )Local Classic (Only in Bangladesh ; Limit below tk. 50,000 or more than tk. 50,000 )

Dutch Bangla Bank Ltd. Gold card – Limit above 70000 taka.Classic card (Visa) – Limit bellows 70000 taka.Silver card (master) – Limit bellows 70000 taka.

Every Bank which provides credit card service having mainly two types of service :

1. Gold 2. Classic

These two types are local and international card, Local Gold and Local Classic , and

Universal Gold and Universal Classic . Card limits of different banks varies. Janata Bank

provides local credit card service only. But other Private Banks provide local and

international card service.

3. Number of card holders over years

A credit card is a great financial tool. It can be more convenient to use and carry than cash,

and they offer valuable consumer protections. Paper money and coin are risky and

burdensome for carrying. One can avoid the toll of finger-counting changes in this system.

Dollars, Pounds or Taka can be plundered, lost or stolen. In case the card is stolen or lost the

clients' bank will issue a fresh card.

Bank Asia Ltd.

Date 15/11/2009 31/12/2008 31/12/2007 31/12/2006 31/12/2005Number of Cardholder

4500 3500 3000 n/a n/a

The mission of Bank Asia Ltd. is to set high standards of integrity and bring total satisfaction to their clients. According to their mission that to create satisfaction among client they introduce credit card and the chart shows that the number of their credit card holders increased day by day.

Exim Bank Ltd.


Now total 3000

Only 800

NCC Bank Ltd.

Date 31/12/2008 31/12/2007 31/12/2006 31/12/2005 31/12/2004

Number of Cardholder

1876 1730 1732 1024 N/A

NCC Bank has launched its Visa Credit Card Service on August 22, 2005 and within 2008 umber of their cardholders are increasing trend.

Dutch-Bangla Bank Ltd.


Now total 2000 members

Janata Bank Ltd.


157 150 - - -

Mercantile Bank Ltd.

Date 31/12/2008 31/12/2007 31/12/2006 31/12/2005 31/12/2004

Number of Cardholder

10950 6051 3212 N/A N/A

Dhaka Bank

Date 31/12/2008 31/12/2007 31/12/2006 31/12/2005 31/12/2004Number of Cardholders

6898 5188 5327 5177 4830

IFIC Bank Ltd.

Date 31/12/2008 31/12/2007 31/12/2006 31/12/2005 31/12/2004

Number of Cardholders

60000

Jamuna Bank Limited


13000 7000 5500 2500 Nil

The Premier Bank Limited


3,000 2,500 2,000 3,000 12,000

Every Bank has an increasing trend in their number of credit cardholder. It refers that the credit card market in our country is expanding day by day. People of our country are becoming more used to this facility as it is less risky than paper money.

4. Income and expenditure of card division over years:

Date 31/12/2008

31/12/2007 31/12/2006

31/12/2005 31/12/2004

Bank Asia Ltd

Revenue (Taka )

Tk. 4 crore Tk. 1.5 crore

- n/a n/a

Exim Bank Ltd

Revenue (Taka )

1 crore taka(expected).

This was preliminary stage so no revenue can be calculated.

Expenditure (Taka )

15 lakhs at the initial stage.

In this year total expenditure is 35 lakhs.

NCC Bank Ltd

Revenue 44614833 30096185 15326248 1342042 N/AExpenditure

5204650 3582390 6491559 N/A N/A

Janata Bank Ltd.

Revenue Tk 15 Lac Tk 12 Lac - - -Expenditure

Tk 35 Lac Tk 35 Lac - - -


Revenue 35500000Expenditure

26000000

BRAC Bank

Revenue 340848639 24874544 1127Expenditure

20851669 6117410 Nil

National Revenue 54259894 56110315 15239628 128098028

Bank 4Expenditure

56754082 48952173 55293193 32585544

Premier Bank

Revenue 76500000 75000000 60000000 65000000 54000000Expenditure

37000000 35000000 34500000 42000000 36000000

Jamuna Bank Ltd.

Revenue 2035666 459600 276440Expenditure

1820000 670000 1380000

Dutch Bangla Bank Ltd.

Revenue 35 lakhs taka(Expected).75 lakhs at the initial stage.

Expenditure

Dhaka Bank

Revenue 27000000 19000000 17000000 16500000 15000000

Expenditure

14000000 14000000 12500000 11000000

The graphical presentation of expenditure card revenue of credit card of some bank are given below:

Graphical Presentation of Revenue and Expenditure of Credit Card:

Revenue and Expenditure of credit card of NCC Bank

Revenue of NCC Bank Ldt.

Expenditure of NCC Bank

The chart shows that the expenditure for credit card is decreasing and revenue is increasing .

Revenue and Expenditure of Credit Card in BRAC Bank

Revenue from Credit Card in BRAC Bank

Expenditure for Credit Card in BRAC Bank

The chart shows that the expenditure for credit card is decreasing and revenue is increasing.

Revenue and Expenditure of Credit Card in National Bank

Revenue from Credit Card

Cost for Credit Card

Expenditure for credit card in national bank is increasing within the last few years that is why the revenue from card has been decreased.

Revenue and Expenditure of Credit Card in Premier Bank Ltd.

Revenue from Credit Card

Expenditure for Credit Card

Revenue and Expenditure of Credit Card in Premier Bank Ltd.Revenue from Credit Card


Revenue and Expenditure of Credit Card in Premier Bank Ltd.Revenue from Credit Card


Revenue and Expenditure of Credit Card in Dhaka BankRevenue from Credit Card


In the most of the bank, revenue is in the increasing trend. Bt in some of bank revenue

fluctuate. That means in some year their revenue increased and in other year decrease.

Banks expenditure depends on how they capture the market. When they want to capture the

market then they need to spend more. This is the one of the main reason of their increased

expenditure. In the initial stage bank do not have any revenue when they lonch the credit

card. Banks generally borrow the money they then lend to their customers. As they receive

very low-interest loans from other firms, they may borrow as much as their customers

require, while lending their capital to other borrowers at higher rates. If the card issuer

charges 15% on money lent to users, and it costs 5% to borrow the money to lend, and the

balance sits with the cardholder for a year, the issuer earns 10% on the loan. This 5%

difference is the "interest expense" and the 10% is the "net interest spread".

his is the cost of running the credit card portfolio, including everything from paying the

executives who run the company to printing the plastics, to mailing the statements, to running

the computers that keep track of every cardholder's balance, to taking the many phone calls

which cardholders place to their issuer, to protecting the customers from fraud rings.

Depending on the issuer, marketing programs are also a significant portion of expenses.

5.Amount of Cash withdrawals through credit card per

Date 31/12/2008 31/12/2007 31/12/2006 31/12/2005 31/12/2004

Bank Asia Ltd

Tk. 28 Lac Tk. 25 Lac - n/a n/a

Exim Bank Ltd

70% of the total cash withdrawals through

45% of the total cash withdrawals through

http://en.wikipedia.org/wiki/Operating_cost

credit cards. credit cards.NCC Bank Ltd

80 Lac 60 Lac 35 Lac 20 Lac

Janata Bank Ltd.

Tk 1.32 crore Tk 95 Lac - - -


90 lac 35 lac 15 lac

National Bank

11204564309 9179953111 305374736 324116595 289210422

Jamuna Bank Ltd.

5661000 1460000 210000

Dhaka Bank 52,433 15,175Dutch Bangla Bank Ltd.

25% of the total cash withdrawals through credit cards.

Credit card is becoming more popular day by day in our country. The amount of withdrawal

is increasing day by day in our country. Dutch Bangla Bank Ltd. deals 25% of the total cash

withdrawal through credit card.

Number of Card defaulters per year

here is a number of credit cardholders who do not give the money to the bank after finishing

the card limit. In this case, the banks have to fall in troubles and expansion of credit cards is

naturally discouraged. Again, there are some people who try to take illegal advantage over

credit cards.

Date 31/12/2008 31/12/2007 31/12/2006 31/12/2005 31/12/2004

Bank Asia Ltd

200 180 -

Exim Bank Ltd

No card defaulters still

NCC Bank Ltd

298 257 206

Janata Bank Ltd.

1 0 - - -


1 0 - - -

Premier Bank 1500 400 300 300 200Dhaka Bank 754 759 680 518

Dutch Bangla Bank Ltd.

No card defaulters still.

As people are becoming more popular with the credit card that is why the possibilty of the defaulter of credit card is also increasing.

Graphical presentation of number of credit card defaulters of some bank:

Number of Card Defaulter in Bank Asia Ltd.

Number of Card Defaulter in NCC Bank Ltd.

Number of Card Defaulter in NCC Bank Ltd.

Number of Card Defaulter in Premier Ltd.

Number of Card Defaulter in Premier Bank Ltd.

7. Advertising Expenditure:

Banks have to make high expenditure for their credit card service to increase the demand.

For advertising they use Bill board, News Paper, Electronic Media, Personal Selling. The

most common advertising media is News paper which is used by all banks for their

advertising. Some expense a lot in electronic media for advertising. News paper is the most

used media of the advertising . Expenditure of advertising vary from bank to bank.

Bank Asia Ltd.

Year 2009 2008 2007 2006 2005Newspaper Tk. 20 Lac Tk. 8 Lac Tk. 5 Lac - -

Exim Bank

Year 2009 2008 2007 2006 2005

Newspaper 15 lakhs 5 lakhs

Others(Please Mention)

Hand bill papers 5 lakhs.

1 lakh.

NCC Bank

Year 2008 2007 2006 2005 2004

Electronic Media

2000000 1050000 500000 355000 N/A

Newspaper 1500000 575000 200000 N/A N/A

Bill Board 1000000 700000 500000 N/A N/A

Personal Selling

NONE NONE NONE NONE NONE


NONE NONE NONE NONE NONE


Year 2009

Newspaper 15 lakhs

Bill Board 5 lakhs


Hand bill papers 3 lakhs.

Mercantile Bank Ltd

Year 2008 2007 2006 2005 2004

Newspaper 7 lac 2.5 lac 2 lac N/A N/A

Personal Selling

2 lac 2.5 lac N/A N/A

BRAC Bank

Year 2008 2007 2006Total 94285036 64649691 50273749

Dhaka Bank

Year 2008 2007 2006 2005 2004Newspaper 5 10 - - -Bill Board 5 8 - - -Personal Selling

2 2 1 1 1

NATIONAL BANK LTD.

Year 2008 2007 2006 2005 2004

Total 46179467 8370521 10940775 5936730 3448087

The Premier Bank Limited

Year 2008 2007 2006 2005 2004Newspaper 2,00,000 - - 1,00,000 1,00,000

Personal Selling

5,00,000 - - -

8. Fees and Charges

Fees and charges also vary from bank to bank.

N n Lt a dCredit Card Category

Annual Fees Late Payment Fees

Excess Over Limit Fees

VAT

Classic Local 1000 200=/ 200=/

15%Gold Local 2000 200=/ 500=/

Gold International

3000 $10 $10


Particulars Local International / Dual

Gold BDT

Classic BDT

Gold USD

ClassicUSD

Annual fee (customers) 1500 1000 2500 1300

Annual fee (Bankers) 1500 1000 2550 1300Supplementary card 0 0 500 500Excess Limit 250 250 10$ 10$Late Payment 300 200 10$ 10$Return Cheque 50 50 5$ 5$Statement Retrieval fee 50 50 3$ 3$Sale slip Retrieval 100 100 10$ 10$

Outstation Cheque collection 100 100 10$ 10$Pin replacement fee 200 200 200 200

Janata Bank Ltd.

Card Fees and Charges : The following fees and charges are realized from Janata Bank Credit Card customer

500/-500/-

1. Card fees Annual Fees Renewal Fees

500/- 2. Replacement/Lost Card fee

500/- 3. Supplementary Card fee

250/- 4. Late Payment fee(2%, p/m, Minimum)

50/- 5. Statement Retrieval fee

100/- 6. Sales Slip Retrieval fee

250/- 7. PIN Replacement fee

Interest:

Any amount outstanding after the payment due date will apply 2% per month

calculated on daily basis from the date of posting transaction to the card account until

the amount is paid in full. Charging of interest will also include all the transactions

shown on the current statement.

Interest on Cash Advance:

In case of cash withdrawal from ATM BY Credit Card, interest will be charged @ 2%

per month from the date of Cash withdrawal until the cash drawn amount is paid in

full. There will be no cash advance at Janata Bank ATM.

Late Payment Charge:

If the minimum amount due is not paid within the payment due date, a late payment

fee @ 2% of the billing amount or Tk250/- whichever is higher will be charged.

Service Charge:

For using ATM of banks

Tk. 10 per transaction – 16 Q-Cash Consortium banks(except Janata bank)

No service charge for using ATM booths of Janata Bank Ltd.

Tk 15 per transaction –BRAC Bank Ltd.

Tk 20 per transaction –Dutch Bangla Bank Ltd.

Mercantile Bank Ltd.

Fees and Charges Gold int’l- $ 70 annually

Classic int’l - $35 annually

Gold local- 1800Tk. annually

Classic local-900 Tk. annually

- Late payment charge Tk.250 per month

- Over limit Tk.350

Dhaka Bank

ees and Charges

Local Classic: Taka. 1000

Local Gold: Taka. 2000

Dual Classic: Taka. 2000

Dual Gold: Taka. 3000

9. Target Customers

Sophisticated people,

business man and

MNC Service holders

Bankers

Corporate client companies and

their employees

Financial Institutions, Doctor,

Engineer, University Teacher,

Multinational Company, Govt.

high officials.

Private Organization Service Holder

Govt. Organization Service Holder Doctor Engineer

o and other service holder who is capable to hold the credit card.

10. Customer Appraisal Procedure

Different Banks use different Customer Appraisal Procedure :

Customer Phone Verification (CPV)- a procedure of custimer’s given information

Income or salary statement checking Must be a customer of any branch of their bank Description of the movable and immovable assets, other bank loans and

liabilities of the applicant In case of business man last six months transaction statement is repuired (in

Janata Bank) Declaration from the applicant whether they take loan from other sources

Banks assess risk based on the information provided by the person wants to be the card holder.

11. Limit determination Procedure

Determination of Limit varies bank to bank and also customer to customer. To determine the limit of the credit card

No. Banks years Amount 2007 2008 2009

1 Bank Asia Ltd Around 0.025% of the profitability of the bank

2 Commercial Bank of Ceylon

N/A

3 Exim Bank Ltd. 0.33% 1 crore & 10 lakh

4 NCC Bank Ltd 4 crore5 Janata Bank Ltd. Around 2

lakh6 South East Bank

Ltd. 1.61% of profit

7 Eastern Bank Ltd. N/A8 Marcantile Bank

Ltd.5%

9 National Bank N/A10 Premier Bank 3-5% of total profit11 Jamuna Bank Ltd. 20%12 BRACBank 35% 4%13 City Bank N/A14 IFIC Bank N/A15 Dhaka Bank .25% .50% 1%16 Dutch Bangla

Bank Ltd.Not calculated yet

Mainly it depends on the monthly salary or income of the customer. Sometimes customer’s status is also taken into account.

Generally limit is around 1.2- 1.5 times of the income of the customer. For business people, the limit may cross 1.5 times of income depending on the level of risks.

Social Status is also important issue

Dutch Bangla Bank Ltd. has one internal procedure system. First they collect some

information from various sources about internal, external, financial, historical and

also family matters .And than rank this information out of 100.

12. Contribution of credit card to the total profitability of the organization:

We can see that, Brac bank has 35% profit from credit card division which is larger than any other bank of our list because it has more card facility than any other bank in our country. In amount NCC bank has its more profit than any other bank .

13. Features to be added to address the changing need of customers

No.

Banks Features

1 Bank Asia The bank has introduced VISA Tuntuni which has fixed limit of Tk 20,000 to meet the needs of middle income people.Issuance of checks in VISA card (already prevalent in MasterCard).Providing VISA Dual cards to more customers, rather than selected people.There is a strategy to attract plastic cards customers of other banks called ‘Soft turn’, through which the bank provides more limit. But it requires customer to surrender


They are coming with all latest facilities in the card.

3 Exim Bank Ltd.

smartly purchase any product

4 NCC Bank Ltd

N/A

5 Janata Bank Ltd.

VISA MembershipNew ATM Booths installationNetwork creationNetwork sharingMinimum payment of monthly credit by customers will be 5% from current 8%.Additional establishment of POS (Point of Sale)

6 South East Bank Ltd.

At the moment, the bank is not moving towards implementing any such features or innovation.

7 Eastern Bank Ltd.

N/A

8 Mercantile Hajj card will be launched soon.

Bank Ltd. A special type of prepaid card for students is going to launch soon.

9 National Bank

N/A

10 Premier Bank • Chip based card• EMV card

11 Jamuna Bank Ltd.

Pre-paid card Gift cardHajj CardTravel card

12 BRACBank N/A13 t ni a Variable Interest Rate

EMI Plan

Balance Transfer

Round the clock cash withdrawal facility at any Visa branded ATM throughout the world

Round the clock purchasing power for goods and services at any Visa branded POS outlet

24% interest on Cash Advance

No cash Advance fee at CITY ATMs

Lowest Annual/Renewal Fee

International Roaming facility

Internet Transaction*

Convenient Repayment option

E-statement

Limited Lost Card Liability

Secured with your Photo – Photo Card

24 hours customer service help deskAccording to the changing need of customer City Bank is launching MS card which will provide all types of facilities to its customers. Eligible customer’s monthly income must be at least 70,000 taka.

14 IFIC Bank User flexibilityMore attractive interestConvenience balance transfer facilitiesRound the clock purchasing power for goods and services

Internet TransactionLimited Lost Card LiabilityEnsuring more safety by using finger print

15 Dhaka Bank Reward point (usage discount)Discount or renewal feeJoining fee 0% interest [15-45 days interest free time period if purchased by credit card ]

16 Dutch Bangla Bank Ltd.

smartly purchase any product

From the above figure it is evident that , all banks are interested to facilitate purchasing power of the customers, they are interested to provide special facility for hajjis whilst a great no. of banks are not interested to add any new special facility in their credit cards.

14. Usage discount:

No. Banks Discounts1 Bank Asia Ltd Usage discount varies around 3%- 20% of usage

amount.Discounts for customers in purchase or buying in corporate partners

2 Commercial Bank of Ceylon It will be determined on the basis of the company strategy and performance.

3 Exim Bank Ltd. Still they have no usage discount4 NCC Bank Ltd N/A5 Janata Bank Ltd. So far no such usage discount has been provided6 South East Bank Ltd. No such discount given7 Eastern Bank Ltd. Heavy discount on their products and services8 Mercantile Bank Ltd. On the basis of the payment condition up to 100%

interest is discounted to the valuable customers9 National Bank N/A10 Premier Bank N/A11 Jamuna Bank Ltd. Not available12 BRACBank N/A13 City Bank N/A14 IFIC Bank If the employees of IFIC Bank use these cards,

they do not have to pay any charge for first year. In second year they will get 50% discount from their yearly charge.IFIC Bank comes to a contract with Reliance Insurance ltd that the employees of Reliance insurance are not required to pay annual charge for first year if they use credit card of IFIC Bank ltd and also they will get 50% waiver of their annual charge in 2nd year.The user of credit card will get 15% discount in peak season and 40% discount in off peak season if they stay PRASAD PARADISE in Cox’s Bazar.

15 Dhaka Bank No discount yet16 Dutch Bangla Bank Ltd. Still they have no usage discount

From our list, six banks are not providing any usage discount to the customers, five banks don’t provide any answer for this question because they are reluctant about the facility. Only IFIC and Mercantile banks are different because IFIC is providing a lot of usage discount and Mercantile bank is providing 100% interest rate discount to the valuable customers on some conditions.

This situation can be figured in the following figure:

15. Prospect

No. Banks Prospects

1 Bank Asia Ltd The Bank has got good prospects. In 2009, it is in the

2nd position behind only Standard Chartered Bank.All the branches perform credit card operation; mainly more response from divisional districts.


As their numbers of customers are increasing, they are expecting that, this credit card division will be successful.

3 Exim Bank Ltd. With VAT, purchasing power, GDP growth, company revenue as well as domestic production is increasing.

4 NCC Bank Ltd As the revenue of the bank from the credit card division is increasing gradually and it contributes a huge amount to the total profitability of the organization, so the prospect of this division is well enough.

5 Janata Bank Ltd. Prospect of this department is not well enough.6 South East Bank Ltd. Single Card – Dual Use (Local and International)

Widely accepted at Merchants and ATMs worldwideCompetitive annual/renewal fee50 days interest free credit facility50% card drawing facility at ATMS and any SE bank branchSMS Push-Pull service24 hours customer service etc

7 Eastern Bank Ltd. N/A8 Mercantile Bank Ltd. It’s Prospect is bright9 National Bank N/A10 Premier Bank Very good11 Jamuna Bank Ltd. Very effective in future12 BRACBank N/A13 City Bank Future prospect of the bank credit card is very

attractive. In response to the customer’s increasing demand, the bank is going to launch MS CARD where only sophisticated and high income class people are eligible for it. The growth of their number of customer is also satisfactory.

14 IFIC Bank The bank has launched its VISA card in 2007 and since then it has experienced a tremendous growth in number of customers and in revenue.

15 Dhaka Bank To capture higher market share by offering special featured of credit card

16 Dutch Bangla Bank Ltd. With VAT, purchasing power, GDP growth, company revenue as well as domestic production is increasing.

As people of Bangladesh are becoming digital in all sectors, they are using more and more credit card facilities now-a-days. The world of banking has introduced a new world with different facilities in Bangladesh which makes Bangladesh digital means modern. From our listing banks’ scenario we can say that with Bangladesh peoples upgrading life banks’

profitability as well as credit card usage is also increasing with the concerned division success.

16. Constraint

No. Banks Constraints1 Bank Asia Ltd There is an age limit for customers (21-61 years). Bank doesn’t

issue credit cards to applicants outside this limit.If applicant’s net income is low, then bank doesn’t provide credit card.Some business persons change their address and never lets bank know. In business person’s aspect, bank gives more priority to reference to track them. Bank tries to avoid customers having risky profiles.Some professionals are avoided (police, lawyers etc)


Over loan tendency of the peopleTendency of making delay in payment.Lack of consciousness about using the card.

3 Exim Bank Ltd. Govt. imposes vat on the card. People are not aware of this type of transaction.High designation must be needed to get credit card etc.

4 NCC Bank Ltd None5 Janata Bank Ltd. No central database system. For efficient and effective operation

strong technical support is must. No core banking software.No separate Credit Card Department. It is operated under the Business Development Marketing Department.Lack of manpower in operation, marketing and recovery section.Communication and media problem.Have to maintain credit card operation centrally.

6 South East Bank Ltd.

The bank does not have any ATM machines, which is their greatest weakness. They only act as issuers, not acquirers. Lot of players already exists in the market but even then the bank is following conservatism strategy.

7 Eastern Bank Ltd.

N/A

8 Marcantile Bank Ltd.

Penetrating markets is difficult.Good repayment behavior is rare.

CIP, VIP are already existed cards.Most of the people have very low electronic knowledge

9 National Bank Nil10 Premier Bank Technology is not still developed across the country11 Jamuna Bank

Ltd. Nil

12 BRACBank Nil13 City Bank Although the bank has a good number of customers, Bank has

found difficulty in schooling their customer how to use these cards.POS machine are not adequateImposition of additional 15% vat discourages customers.As it is very risky product and no collateral is required, Bank needs to be very cautious in customer appraisal procedure.

14 IFIC Bank Limited number of ATM booths POS machine are not adequatePeople are not familiar with the use of this technologyImposition of additional 15% vat discourages customers.As it is very risky product and no collateral is required, Bank needs to be very cautious in customer appraisal procedure

15 Dhaka Bank No Push-Pull service (SMS)Chaque book, Credit Card etc. are not provided yet.Conservative approach in assigning limit

16 Dutch Bangla Bank Ltd.

Govt. imposes vat on the card. People are not aware of this type of transaction.High designation must be needed to get credit card etc.

As people of Bangladesh are becoming digital in all sectors, they are using more and more credit card facilities now-a-days. But because of various constraints people as well as banks are facing problems to use this more. We can make a clear picture in our mind about these problems from the above figure.

17. Marketing Strategy

No. Banks Marketing Strategy

1 Bank Asia LtdThe bank has a conservative marketing strategy. It doesn’t provide cards whoever comes. It provides cards only after ensuring full security.

Advertisements are only done in newspapers. But more emphasis is put on personal selling i.e. providing cards to people bank’s employees know. Generally, bank follows the KYC (know your customer) approach.

2 Commercial

Bank of Ceylon

No aggressive approach.Advertisement will be published in the newspaper soon.Corporate level program about the card will be started soon (with their all corporate client).

3 Exim Bank Ltd. On line advertisement, office to office direct marketing, Encourage the high designation people by giving Email as well as business man.Traditional festival based discount on usage

4 NCC Bank LtdDoor to Door Approach

5 Janata Bank Ltd.When the bank starts its full operation (planned 2010), it will provide credit card services through branches.Branches will be given set targets of no. credit card issuance periodically.Bank plans to set up POS in different areas.

6 South East Bank

Ltd.

SE bank’s marketing strategy and focus is limited to specific group of target customers. They are very strict and rigorous in issuing credit cards.

80% of their total card base are bankers, 10% are businessmen issued through other branches, 8% are other organizations and 2% are other miscellaneous businessmen.

7 Eastern Bank

Ltd.

None

8 Marcantile Bank

Ltd.

No push sell.Not too liberalTough assessmentLow interestOccasional discount.

9 National Bank None

1

0

Premier BankNot available enough marketing strategy including lower advertising and only selling the card through direct sales executive.

1

1

Jamuna Bank

Ltd.

Convincing the existing customers of JBL by branch employees.

1

2

BRACBank None

1

3

City Bank

1

4

IFIC BankIncreasing number of profitable customers rather only increasing the number of customersTargeting to attain almost 15% growth in every year in revenue from credit cardIncreasing number of ATM booths for ease of customerMaintaining adequate POS machineProviding training to its sales staff.

1

5

Dhaka BankEncourage people to possess credit card by making them understand about the advantage and facilities of using credit card.

16 Dutch Bangla

Bank Ltd.

On line advertisement, office to office direct marketingEncourages the high designation people by giving Email as well as business man. Traditional festival based discount on usage.

It is not important to discuss anything here because of the figure’s clearness.

NOTE: Here, to make charts we have used only most popular and larger number of points in figuring all figures because at time of adding all points figures become clumsier. So to make charts we use conservative and “clear to see” approach.

CONCLUSION

Paper money and coin are risky and burdensome for carrying. A credit card is a great

financial tool. It can be more convenient to use and carry than cash, and they offer valuable

consumer protections

There are many business centers which do not give card facilities causing troubles to the

cardholders. The most disadvantage of the card is that all the people wishing to be

cardholders cannot enjoy card facilities because of ceiling-touch income bracket along with

other criteria, only a certain section of people fulfilling criteria can be cardholders.

A versatile, reliable credit card processing service can help business increase sales by

enabling you to accept all forms of payment from anywhere at anytime.

Credit card debt has increased steadily. As the card debt is increasing day by day so the

default risk is also increasing. To minimize this risk people have to self-restrict to make

expenditure. They should not take debt to such that amount which will be like burden to

them. Appropriate rules and regulation is also needed to minimize this default risk.

BIBLIOGRAPHY

Information collected from different banks.

http://en.wikipedia.org/wiki/Debt

Web site of mentioned banks.

News papers.

Text book

Documents

Credit Card Market in Bangladesh