62738514 Shahjalal Islami Bank Internee Report

Assessing Customer Satisfaction of

Shahjalal Islami Bank Limited (Keraniganj Branch)

Md. Azim Ferdous

BBA Program, 2008 (11th Batch)

Roll No: 121

Supervisor

Mrs. Rubina Maleque

Associate Professor

Department of Management Studies

Faculty of Business Studies

University of Dhaka

November, 2009

Page | II

Date: November 15, 2009

To The Senior Vice President

Head of HRD

Human Resources Division

Shahjalal Islami Bank Ltd.

Head Office

10 Dilkusha C/A, Dhaka.

Through- The FAVP & Manager, Shahjalal Islami Bank Ltd., Keranigonj Branch.

Subject: Submission of Internship Report.

Dear Sir,

I am hereby submitting you my internship report on ―Assessing Customer Satisfaction

of Shahjalal Islami Bank Limited (Keraniganj Branch)‖ as required by my internship

appointment letter (SJIBL/HRD/HO/2009/1484/7) dated September 15, 2009.

I‘m really thankful to you for giving me the opportunity to execute my internship

program at the bank. I respectfully acknowledge your help that you so kindly accorded

to me during the course of my internship program. I‘m also grateful for allowing my

access in necessary information for preparing this report.

Working for this report during my internship program has definitely enriched my

knowledge and experience in practical field. Despite some limitations I‘ve tried my

best to prepare this report as a decent one.

Your kind acceptance of this report will be highly appreciated and should you need

any assistance in interpreting the report, please call me; I am at your service.

Sincerely yours-

__________________ Md. Azim Ferdous

BBA-11th Batch, Roll No: 121

Department of Management Studies

University of Dhaka

Mobile No: +88 0193 393 797

Page | III

Preface

I would like to thank my internship program supervisor Mrs. Rubina Maleque for her

prudent guidance and instruction that enabled me to accomplish the internship report

successfully.

I would like to thank the manager of Shahjalal Islami Bank Limited (Keraniganj

Branch) for giving me the opportunity to execute my internship program at the bank

and for allowing my access in necessary information for preparing this report. I would

also like to express my immense gratitude to all of the officers of Shahjalal Islami

Bank Limited who not only helped me a lot to prepare this report but also helped me

with their guidance and by sharing their invaluable knowledge throughout my entire

internship program.

Page | IV

Table of Contents

Executive Summary ................................................................................................................... IX

Chapter 1: Introduction................................................................................................................ 1

1.1. Origin of the Report ..................................................................................................................... 1

1.2. Objectives ........................................................................................................................................ 1

1.3. Scope ................................................................................................................................................ 1

1.4. Historical Background .................................................................................................................. 2

1.5. Methodology ................................................................................................................................... 2

1.6. Limitations....................................................................................................................................... 3

1.7. Acronyms & Definitions .............................................................................................................. 3

1.8. Report Preview ............................................................................................................................... 4

Chapter 2: Islami Banking ......................................................................................................... 5

2.1. Concept of Islami Banking .......................................................................................................... 5

2.2. History of Islami Banking ............................................................................................................ 6

2.2.1. Classical Islami Banking ........................................................................................................ 6

2.2.2. Modern Islamic Banking ....................................................................................................... 6

2.2.3. Islamic Banking in Bangladesh ............................................................................................ 7

Chapter 3: Organizational Profile ............................................................................................. 8

3.1. About Shahjalal Islami Bank Ltd. (SJIBL) ................................................................................ 8

3.2. Vision ............................................................................................................................................... 8

3.3. Mission ............................................................................................................................................. 8

3.4. Strategies .......................................................................................................................................... 8

3.5. Motto ................................................................................................................................................ 9

3.6. Organizational Structure/Organogram..................................................................................... 9

3.7. Divisions of Shahjalal Islami Bank Ltd. .................................................................................. 10

3.8. Capital Structure ........................................................................................................................... 11

3.9. Company Growth ........................................................................................................................ 12

3.10. Corporate Social Responsibility (CSR) ................................................................................. 19

3.11. Products ....................................................................................................................................... 20

3.11.1. Deposit Accounts............................................................................................................... 20

3.11.2. Deposit Schemes ................................................................................................................ 22

3.11.3. Investment Schemes .......................................................................................................... 22

3.12. Services ........................................................................................................................................ 30

Page | V

3.12.1. Online Banking Services ................................................................................................... 30

3.12.2. SJIBL VISA Card Services ............................................................................................... 30

3.12.3. SMS/Push Pull Services ................................................................................................... 31

3.12.4. Foreign Remittance Services ............................................................................................ 32

3.12.5. Capital Market Services ..................................................................................................... 33

3.12.6. SME Services ...................................................................................................................... 33

3.12.7. Other Services ..................................................................................................................... 34

3.13. Performance of the Bank (Ratings) ....................................................................................... 34

3.13.1. Credit Rating ....................................................................................................................... 34

3.13.2. CAMELS Rating ................................................................................................................ 35

Chapter 4: Assessing Customer Satisfaction of SJIBL ........................................................36

4.1. Literature Review ......................................................................................................................... 36

4.1.1. Definition of Customer....................................................................................................... 36

4.1.2. Definition of Satisfaction.................................................................................................... 37

4.1.3. Definition of Customer Satisfaction ................................................................................ 37

4.1.4. Why to Measure Customer Satisfaction .......................................................................... 37

4.2. Process used in Assessing Customer Satisfaction Level of SJIBL (Keraniganj Br.) ..... 39

4.2.1. The Customer Satisfaction Measurement Model .......................................................... 39

4.2.2. The Questionnaire/ Instrument ....................................................................................... 39

4.2.3. The Rating Scale ................................................................................................................... 41

4.2.4. The Cut-Off Score ............................................................................................................... 41

4.2.5. The Gap Score ...................................................................................................................... 42

4.3. Findings & Analysis..................................................................................................................... 43

4.3.1. Calculation of Average SERVQUAL Scores for Each of 5 (five) SERVQUAL

Dimensions ....................................................................................................................................... 67

4.3.2. Calculation of Unweighted SERVQUAL Score ............................................................ 69

4.3.3. Calculation of Weighted SERVQUAL Score/ Customer Satisfaction Index (CSI) .... 69

Chapter 5: Conclusion ................................................................................................................70

5.1. Ending Summary ......................................................................................................................... 70

5.1.1. Quantitative Findings .......................................................................................................... 70

5.1.2. Qualitative Findings ............................................................................................................. 71

5.2. Recommendations ....................................................................................................................... 72

Works Cited ..................................................................................................................................74

Appendix .......................................................................................................................................77

Page | VI

Table of Figures

Figure 1: Three-tier Mudaraba System ....................................................................................... 6

Figure 2: Organizational Chart (Organogram) of SJIBL.......................................................... 9

Figure 3: Equity Composition of 2008 ..................................................................................... 12

Figure 4: Equity Movement from 2004 to 2008 ..................................................................... 13

Figure 5: Capital Adequacy Position from 2004 to 2008 ....................................................... 13

Figure 6: Deposit Mix of 2008................................................................................................... 14

Figure 7: Trend of Deposit from 2004 to 2008 ...................................................................... 14

Figure 8: Investment Portfolio of 2008 .................................................................................... 15

Figure 9: Trend of Investment from 2004 to 2008 ................................................................. 16

Figure 10: Deposit & Investment Growth .............................................................................. 16

Figure 11: Operating Results from 2006 to 2008 .................................................................... 17

Figure 12: Number of Branches ................................................................................................ 18

Figure 13: Manpower Position from 2004 to 2008 ................................................................. 18

Figure 14: Long Term Credit Rating of SJIBL from 2006 to 2008 ...................................... 35

Figure 15: Short Term Credit Rating of SJIBL from 2006 to 2008 ...................................... 35

Figure 16: Example of a 5 Point Likert Rating Scale .............................................................. 41

Figure 17: Satisfaction Score & Loyalty, Indifference, Defection Zone .............................. 42

Figure 18: Gender Ratio among Samples ................................................................................. 43

Figure 19: Samples‘ Age Clusters .............................................................................................. 43

Figure 20: Sample Ratio based on Profession ......................................................................... 44

Figure 21: Respondents' response on acting of employees according to promise ............. 45

Figure 22: Respondents' response on employees‘ sincere interest in Problem Solving ..... 46

Figure 23: Respondents' response on having service right at the first time ........................ 47

Figure 24: Respondents' response on having services by the promised time ..................... 48

Figure 25: Respondents' response on insistence of error free record .................................. 49

Figure 26: Respondents' response on employees‘ behavior in instilling confidence in

customers ................................................................................................................... 50

Figure 27: Respondents' response on feeling safe in transactions ........................................ 51

Figure 28: Respondents' response on consistent courtesy of employees ............................ 52

Page | VII

Figure 29: Respondents' response based on employees knowledge ..................................... 53

Figure 30: Respondents' response on modern looking equipment ...................................... 54

Figure 31: Respondents' response on visually appealing physical facility ............................ 55

Figure 32: Respondents' response on neat appearance of employees .................................. 56

Figure 33: Respondents' response on appealing appearance of materials ........................... 57

Figure 34: Respondents' response on getting individual attention ....................................... 58

Figure 35: Respondents' response on operating hour of the bank ....................................... 59

Figure 36: Respondents' response on having personal attention providing employees .... 60

Figure 37: Respondents' response on having best interest of customers to employees‘

heart ............................................................................................................................ 61

Figure 38: Respondents' response on understanding of specific needs of them by the

employees ................................................................................................................... 62

Figure 39: Respondents' response on getting information of exactly when service will be

given ........................................................................................................................... 63

Figure 40: Respondents' response on getting prompt service ............................................... 64

Figure 41: Respondents' response on employees‘ willingness to help ................................. 65

Figure 42: Respondents' response on business of employees while to respond customers

..................................................................................................................................... 66

List of Tables

Table 1: Tier-1 Capital (Core Capital) 12

Table 2: Tier-2 Capital (Supplementary Capital) 12

Table 3: Deposit Mix 14

Table 4: Investments‘ Portfolio 15

Table 5: Operating results of the year 2008 & 2007 17

Table 6: Credit Rating Result from 2006 to 2008 35

Table 7: Sample‘s Frequency Distribution based on Gender 43

Table 8: Sample‘s Frequency Distribution based on Age 43

Table 9: Sample‘s Frequency Distribution based on Profession 44

Table 10: Survey result of the statement 1 (Act according to Promises) 45

Table 11: Survey result of the statement 2 (Sincere Interest in Problem Solving) 46

Table 12: Survey result of the statement 3 (Performs the Service Right the

First Time) 47

Table 13: Survey result of the statement 4 (Provides Services at the Time

Page | VIII

Promised) 48

Table 14: Survey result of the statement 5 (Insists on Error Free Records) 49

Table 15: Survey result of the statement 6 (Employees Behavior Instills

Confidence in Customers) 50

Table 16: Survey result of the statement 7 (Customers Feel Safe in Transaction) 51

Table 17: Survey result of the statement 8 (Consistent Courtesy of Employees) 52

Table 18: Survey result of the statement 9 (Employees have the Knowledge to

Answer Customers' Question) 53

Table 19: Survey result of the statement 10 (Modern Looking Equipments) 54

Table 20: Survey result of the statement 11 (Visually Appealing Physical Facilities) 55

Table 21: Survey result of the statement 12 (Neat Appearance of Employees) 56

Table 22: Survey result of the statement 13 (Appealing Appearance of Materials) 57

Table 23: Survey result of the statement 14 (Gives Customers Individual

Attention) 58

Table 24: Survey result of the statement 15 (Has Convenient Operating Hours

for Customers) 59

Table 25: Survey result of the statement 16 (Has Employees to Give

Customers Personal Attention) 60

Table 26: Survey result of the statement 17 (Has Best Interest of Customers

at Heart) 61

Table 27: Survey result of the statement 18 (Employees Understand Specific

Needs of Customers) 62

Table 28: Survey result of the statement 19 (Informs exactly when Services

will be provided) 63

Table 29: Survey result of the statement 20 (Gives Prompt Services) 64

Table 30: Survey result of the statement 21 (Employees are Always Willing

to Help) 65

Table 31: Survey result of the statement 22 (Never too Busy to Respond

Customer Requests) 66

Table 32: Average Reliability SERVQUAL score 67

Table 33: Average Assurance SERVQUAL score 67

Table 34: Average Tangibles SERVQUAL score 68

Table 35: Average Empathy SERVQUAL score 68

Table 36: Average Responsiveness SERVQUAL score 69

Table 37: Calculations to obtain unweighted SERVQUAL Score 69

Table 38: Calculations to obtain Customer Satisfaction Index (CSI) 69

Table 39: Debit Card Usage Limit 78

Table 40: SWIFT Codes 78

Page | IX

Executive Summary

With a commitment of providing cordial service to customers Shahjalal Islami Bank

Limited has diversified its service coverage during last eight years by opening new

branches at different strategically important locations across the country offering

various service products both investment & deposit. Adequate capital, good quality of

asset, smooth growth, enough liquidity, well performance in CSR, etc. backs up its

strong position in CAMELS rating (having a rating of ―Strong or A-class Bank‖) for

consecutive years.

Customer satisfaction is a measure of how products and services supplied by a

company meet or surpass customer expectation. It is seen as a key performance

indicator within a business. So, assessing the level of customer satisfaction actually

helps to measure an organization‘s position in business. I‘ve measured the customer

satisfaction level of Shahjalal Islami Bank Limited, Keraniganj Branch.

I‘ve calculated the Customer Satisfaction Index by using SERVQUAL instrument

having 22 statements on service quality dimensions through face to face interviews

with the accountholders of the bank. Their agreements (agree & strongly agree) with

the SERVQUAL statements touching the cut off score (4) in used 5 point Likert Scale

is considered as satisfied in this study.

The study shows that customers conceive this bank as reliable in getting accurate

promised services, problem solving and in maintaining error free record. They also

believe that there is assurance of competency, courtesy, credibility & security by the

bank. They are also satisfied by the tangible appearances of the bank. But the

customers are not enough satisfied in getting personal attention and they think that

employees do not understand their specific needs. They also think that the employees

are not enough responsive in providing prompt services and in informing that exactly

when service will be provided.

The unweighted SERVQUAL score of 4.13 and weighted score or Customer

Satisfaction Index of 4.10 indicates a satisfactory state in the overall level of customer

satisfaction.

On the basis of conducted Key Informants Interviews, the quantitative study result

and my observation I believe that appointing more employees under General Banking

department, maintaining time slots for each customer to serve, setting up of electronic

calling machine for cash counter, setting up of query desk, replacement of core

banking software by better one, regular arrangement of employee training workshops,

appointing female employees, etc. will help to increase the satisfaction level of the

customers of the bank.

Chapter 1: Introduction Page | 1

Chapter 1: Introduction

1.1. Origin of the Report

This report is prepared as an internship report which is a mandatory requirement for

successful completion of BBA program under University of Dhaka and which aims to

reflect the professional view of real world working environment. This internship

report is required to submit after fulfilling 45 days of working experience in an

organization as a trainee.

I got proper supervision of my academic supervisor Mrs. Rubina Maleque,

Associate Professor, Department of Management Studies, University of Dhaka

throughout my internship period for the successful completion of the report titled

―Assessing Customer Satisfaction of Shahjalal Islami Bank Limited

(Keraniganj Branch)”

1.2. Objectives

Broad Objective

The objective of this study is to determine the customers‘ level of satisfaction of

Shahjalal Islami Bank Ltd., Keraniganj Branch.

Specific Objectives

The specific objectives of the study are to-

a. Know the ability of employees to perform promised service dependently and

accurately.

b. Know to what level the customers are assured by competence, courtesy,

credibility and security by the bank and its employees.

c. Measure to what extent the tangible appearances are satisfying customers.

d. Evaluate customers‘ satisfaction in getting convenient banking hour, care &

individual attention.

e. Assess willingness of employees to help customers & to provide prompt

service.

f. Compute the unweighted overall satisfaction level of the customers & weighted

―Customer Satisfaction Index‖.

1.3. Scope

The report deals with measuring the satisfaction level of the customers of Shahjalal

Islami Bank Limited, Keraniganj Branch. These customers are the people who have

account in this branch. The total population is not covered here. It is based on sample

survey. Thus the satisfaction level of the entire customers of Shahjalal Islami Bank

Limited or any other branch of the bank is not measured here and these will not be a


part of the report. The study was conducted from 18th of October, 2009 to 3rd of

November, 2009. Thus the samples were selected from the customers who came to

bank in during this time period.

1.4. Historical Background

The Keraniganj Branch of Shahjalal Islami Bank Limited started its journey at 17th

September, 2008. Though a there were initiatives to measure the customer satisfaction

at the branch a year ago, that was in its very beginning period and the Customer

Satisfaction Index was not measured. And as the satisfaction level of customers‘

changes, this report on the level of customers‘ satisfaction will provide an option to

compare the level of satisfaction now with that of a year earlier.

1.5. Methodology

In order to conduct this internship report both primary & secondary data have been

utilized.

Primary Data Collection

The primary data have been obtained through using following two techniques:

a. Key Informant Interview Process: I‘ve used this process to collect qualitative

data on customer satisfaction, its influencing elements, ways to improve it, etc.

For this reason I have conducted KIIs with the following personnel:

Md. Masum Khan Jewel, Trainee Senior Officer

Mohammad Alamin, Trainee Officer

Mohammad Abdul Awal Khan, Client Relationship Officer

Sarker Sahiduzzaman, Client Relationship Officer

b. SERVQUAL Instrument: To get quantitative data on customer satisfaction

directly from customers with a view to measure their level of satisfaction I‘ve

interviewed 50 account holders of Shahjalal Islami Bank Ltd. having different

profession & who lies in different age group using the SERVQUAL instrument.

The interviews have been conducted using a structured questionnaire containing

22 questions representing the five dimensions of customer satisfaction

measurement. A sample questionnaire has been annexed in the appendix part.

The time period of the study lies in between 18th of October, 2009 to 3rd of

November, 2009.

Secondary Data Collection

The secondary data have been collected from published literatures, journals, company

reports, head office‘s orders, websites, etc.


Data Analysis & Interpretation

All the quantitative data collected by surveying customers have been analyzed by using

Microsoft Excel 2007. Using the program‘s formula I‘ve calculated mean, mode,

maximum, minimum, standard deviation, average weight, number of respondents for

each answer, etc. All these information have presented by using tables and graphs in

chapter 4.

To achieve my research objective I transformed the collected data into two categories-

―Unsatisfactory‖ & ―Satisfactory‖. If respondents‘ responses are ―Strongly Disagree‖,

―Disagree‖ & ―Neutral‖ then these are treated as unsatisfactory for the organization

and if respondents‘ responses are ―Agree‖ & ―Strongly Agree‖ then these are treated

as satisfactory for the organization.

1.6. Limitations

The limitations of the report and the study are follows:

The report has been conducted within a short time frame.

The study is self financed.

Only Keraniganj Branch of the bank has been considered for the study.

The sample size does not represent the total population.

Samples were selected conveniently.

For the convenient of the study non probability samples have been used.

All weights given are judgmental.

As time frame was short and the whole study was conducted by one person

there is chance of having error in any stage of data collection, data entry, data

organizing, data sorting, data testing, data presentation, interpretation of result,

etc.

1.7. Acronyms & Definitions

ATM-Automated Teller Machine

BOD-Board of Directors

CAMELS- Acronym of ―Capital adequacy, Asset quality, Management,

Earnings, Liquidity and Sensitivity to market risk‖. It is a supervisory rating

system of the bank's overall condition.

CAR- Capital Adequacy Ratio

CMSD- Capital Market Service Division

CRISL- Credit Rating and Information Services Limited

CS-Customer Satisfaction


CSI-Customer Satisfaction Index

CMT-Common Measurements Tool

CSR-Corporate Social Responsibility

JIT-Just In Time

Likert Scale-A psychometric scale commonly used in questionnaires, and is the

most widely used scale in survey research. When responding to a Likert

questionnaire item, respondents specify their level of agreement to a statement.

The scale is named after its inventor, psychologist Rensis Likert.

KII-Key Informant Interview is a standard anthropological method used in

rapid assessment for gathering information from the affected community. The

term ―key informant‖ refers to anyone who can provide detailed information

and opinion based on his or her knowledge of a particular issue. Key informant

interviews seek qualitative information that can be narrated and cross checked

with quantitative data, a method called ―triangulation‖.

MTCN- Money Transfer Control Number

NPI-Non-Performing Investment

PCB- Private Commercial Bank

POS-Point of Sale (Fund transfer machine for purchasing at any shop/ service

center, etc.)

RATER-Reliability, Assurance, Tangibles, Empathy, and Responsiveness

RIP- Rural Investment Program

SJIBL-Shahjalal Islami Bank Limited

SME- Small and Medium Enterprises

Tier 1 Capital- Tier 1 capital includes paid up capital, reserve and retained

earnings. It is called the core capital.

Tier 2 Capital- Tier 2 capital includes general provision on unclassified

investments and exchange equation account. It is called the supplementary

capital.

1.8. Report Preview

After the introductory chapter the second chapter covers the Islami banking concept

and its history. Then chapter three covers the organizational profile which includes

the mission, vision, motto, organizational structure, divisions, capital structure,

performance, growth, products & services, etc.

Chapter four is the research part, which focus the actual report topic. This section

covers the way to conduct the study, study findings. And finally chapter five covers

both qualitative & quantitative findings and recommendations.

Chapter 2: Islami Banking Page | 5

Chapter 2: Islami Banking

2.1. Concept of Islami Banking

Islami/ Islamic Banking, a new type of banking that operates on principles adhering

to the Quranic norms forbidding usury and transactions, including granting of loans

or credits for interest. The economic rationale for eliminating riba (interest) and

establishing the Islamic banking system is based on values of justice, efficiency,

stability and growth. It is assumed that under the system of Islamic banking, the

industrial and/or commercial risk is shared more equitably between the entrepreneur

and the capital owner and the returns on investment are shared among the investors

on the basis of their proportionate capital. The conventional banks tend to serve the

most creditworthy borrowers, while the Islamic banking system presumably looks for

the most productive and profitable projects. The Islamic banking approach

theoretically opposes the idea of discrimination in offering banking services to people

of different social standings and provides for social cohesion between different

classes.

Islamic banking has the same purpose as conventional banking except that it operates

in accordance with the rules of Shariah, known as Fiqh al-Muamalat (Islamic rules on

transactions). The basic principle of Islamic banking is the sharing of profit and loss

and the prohibition of riba (usury). Amongst the common Islamic concepts used in

Islamic banking are profit sharing (Mudharabah), safekeeping (Wadiah), joint venture

(Musharakah), cost plus (Murabahah), and leasing (Ijarah).

The origins of Islamic banking can be traced back to the practice of mudaraba by the

Prophet Muhammad (Sm) himself. The Prophet (Sm) was mudarib (agent) for his wife,

who entrusted her capital or merchandise to him for trading and got back the

principal plus an agreed share of the profit. As a reward for his labour (and

entrepreneurship), the Prophet (mudarib) received his share of the same. The

mudarib, however, was not liable for losses resulting from the exigencies of travel or

from an unsuccessful business venture. This form of partnership is called mudaraba.

There is another form of partnership called musharaka, in which the musharik (agent)

has a contribution to the capital and can therefore, claim a higher percentage of profit.

As early as in the seventh century, the tax revenue from Iraq was sent across the

desert to Medina in the form of a mudaraba. Caliph Umar is known to have invested

orphans' money in merchant trading between Medina and Iraq. Musharaka

partnerships were practised in the north-south trade between Egypt and Jeddah

during the eleventh century. As many as 32 mudaraba contracts were practised in the

17th century in the Turkish city of Busra. Mudaraba was in practice in Tunisia,

Indonesia, Arabian Peninsula and India.


Modern Islamic banking concepts

came from the historical practice

of the concept of a 'three-tier

mudaraba'. On the first tier, there

is the individual, rab-al-mal, who

wishes to invest capital. The

second tier is the mudarib (agent),

to whom the rab al-mal entrusts

his capital by contract and finally,

on the third tier, there is the

entrepreneur, with whom the

mudarib signs a contract, and to

whom the mudarib passes the

capital originally entrusted to him

by the rab-al-mal.

2.2. History of Islami Banking

2.2.1. Classical Islami Banking During the Islamic Golden Age, early forms of proto-capitalism and free

markets were present in the Caliphate, where an early market economy and an early

form of mercantilism were developed between the 8th-12th centuries, which some

refer to as "Islamic capitalism". A vigorous monetary economy was created on the

basis of the expanding levels of circulation of a stable high-value currency (the dinar)

and the integration of monetary areas that were previously independent.

A number of innovative concepts and techniques were introduced in early Islamic

banking, including bills of exchange, the first forms of partnership (mufawada) such

as limited partnerships (mudaraba), and the earliest forms of capital (al-mal), capital

accumulation (nama al-mal), cheques, promissory notes, trusts (Waqf), startup

companies, transactional accounts, loaning, ledgers and assignments. Organizational e

nterprises similar to corporations‘ independent from the state also existed in the

medieval Islamic world, while the agency institution was also introduced. Many of

these early capitalist concepts were adopted and further advanced in medieval

Europe from the 13th century onwards.

2.2.2. Modern Islamic Banking The first modern experiment with Islamic banking was undertaken in Egypt under

cover without projecting an Islamic image—for fear of being seen as a manifestation

of Islamic fundamentalism that was anathema to the political regime. The pioneering

effort, led by Ahmad Elnaggar, took the form of a savings bank based on profit-

Tier 1Rab-al-mal

• Individual who wishes to invest capital

Tier 2Mudarib (Bank)

• Agent to whom the rab-al-mal entrustes has capital by contract

Tier 3Entrepreneur

• With whom mudarib signs a contract, and to whom the mudarib passes the capital originally entrusted to him by the rab-al-mal

Figure 1: Three-tier Mudaraba System

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

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

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



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

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

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

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

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

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

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

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

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

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

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

http://en.wikipedia.org/wiki/Capital_%28economics%29

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



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

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

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

http://en.wikipedia.org/wiki/Assignment_%28law%29

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

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



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

http://en.wikipedia.org/wiki/Agency_%28law%29

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




sharing in the Egyptian town of Mit Ghamr in 1963. This experiment lasted until 1967

(Ready 1981), by which time there were nine such banks in the country.

In 1972, the Mit Ghamr Savings project became part of Nasr Social Bank which, till

date, is still in business in Egypt. In 1975, the Islamic Development Bank was set-up

with the mission to provide funding to projects in the member countries. The first

modern commercial Islamic bank, Dubai Islamic Bank, opened its doors in 1975. In

the early years, the products offered were basic and strongly founded on conventional

banking products, but in the last few years the industry is starting to see strong

development in new products and services.

Islamic Banking is growing at a rate of 10-15% per year and with signs of consistent

future growth. Islamic banks have more than 300 institutions spread over 51

countries, plus an additional 250 mutual funds that comply with the Islamic principles.

The relative stability of Islamic banking institutions in current recession has gained it

attention. Even The Vatican said banks should look at the rules of Islamic finance to

restore confidence amongst their clients at a time of global economic

crisis. Conservative estimates suggest that over US$ 500 billion of assets are managed

according to Islamic investment principles.

The World Islamic Banking Conference, held annually in Bahrain since 1994, is

internationally recognized as the largest and most significant gathering of Islamic

banking and finance leaders in the world.

2.2.3. Islamic Banking in Bangladesh Islamic banking started in Bangladesh through establishment of the Islami Bank

Bangladesh Ltd. (IBBL), which is considered to be the first interest-free bank in

Southeast Asia. Al-Baraka Bank Ltd., often called the second Islamic bank of

Bangladesh, commenced banking business on 20 May 1997. It is a joint-venture

enterprise of Al-Baraka Investment and Development Company, a renowned financial

and business house of Saudi Arabia, Islamic Development Bank, a group of eminent

industrialists of Bangladesh, and the government of Bangladesh.

In 1996, two more Islamic banks were given clearance to operate under Islamic

banking principles. They were the Al-Arafah Islami Ltd. and Social Investment Bank.

The fifth Islamic bank of the country is a foreign bank named the Shamil Bank of

Bahrain, which was created through merger of the Faisal Islamic Bank of Bahrain and

an Islamic Finance Company.

Now 6 (six) local Private Commercial Banks (PCBs) are working at Bangladesh. These

are as follows:

a. Al-Arafa Islami Bank Ltd.

b. Export-Import/ExIm Bank Ltd.

c. ICB Islami Bank Ltd.

d. Islami Bank Ltd.

e. Shahjalal Islami Bank Ltd.

f. Social Investment Bank Ltd.

Chapter 3: Organizational Profile Page | 8

Chapter 3: Organizational Profile

3.1. About Shahjalal Islami Bank Ltd. (SJIBL)

Shahjalal Islami Bank Limited (SJIBL) commenced its commercial operation in

accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank

Companies Act, 1991. During last eight years SJIBL has diversified its service

coverage by opening new branches at different strategically important locations across

the country offering various service products both investment & deposit. Islamic

Banking, in essence, is not only interest-free banking business, it carries deal wise

business product thereby generating real income and thus boosting GDP of the

economy. Board of Directors enjoys high credential in the business arena of the

country, Management Team is strong and supportive equipped with excellent

professional knowledge under leadership of a veteran Banker Mr. Muhammad Ali.

3.2. Vision

To be the unique modern Islami Bank in Bangladesh and to make significant

contribution to the national economy and enhance customers' trust & wealth, quality

investment, employees' value and rapid growth in shareholders' equity.

3.3. Mission

To provide quality services to customers

To set high standards of integrity

To make quality investment

To ensure sustainable growth in business

To ensure maximization of Shareholders' wealth

To extend our customers innovative services acquiring state-of-the-art technology

blended with Islamic principles

To ensure human resource development to meet the challenges of the time.

3.4. Strategies

To strive for customers best satisfaction & earn their confidence

To manage & operate the Bank in the most effective manner

To identify customers needs & monitor their perception towards meeting those requirements

To review & updates policies, procedures & practices to enhance the ability to

extend better services to the customers


Chairman

Board of Direcotrs Managing Director

Deputy Managing Director Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

First Assistant Vice President

Junior Assistant Vice President

Senior Executive Officer

Executive Officer

First Executive Officer

Senior Officer

Deputy Managing Director

Board Committees

To train & develop all employees & provide them adequate resources so that the

customers‘ needs are reasonably addressed

To promote organizational efficiency by communicating company plans, polices &

procedures openly to the employees in a timely fashion

To cultivate a congenial working environment

To diversify portfolio both the retail & wholesale markets

3.5. Motto

Committed to Cordial Service

3.6. Organizational Structure/Organogram

Figure 2: Organizational Chart (Organogram) of SJIBL


A. Board of Directors: Shahjalal Islami Bank‘s Board of Directors‖ consists of the

following posts-

a. Chairman

b. Vice Chairmen

c. Directors

d. Independent Director

e. Sponsors

f. Managing Director

g. Company Secretary

B. Executive Committee: This bank‘s executive committee has following 10 posts-

a. Chairman

b. Vice Chairman

c. Member (Seven)

d. MD & Ex-officio Member

C. Audit Committee: SJIBL‘s audit committee is made up of 3 individuals-Chairman

and two members.

D. Shariah Council: Shariah Council of the Bank is playing important role in guiding

and supervising the implementation and compliance of Islamic Shariah principles in

all activities of the Bank since its very inception. The Council, which enjoys a high

status in the structure of the Bank, consists of prominent ulema, reputed banker,

renowned lawyer and eminent economist.

Members of the Shariah Council meet frequently and deliberate on different issues

confronting the Bank on Shariah matters. They also conduct Shariah inspection of

branches regularly so as to ensure that the Shariah principles are implemented and

complied with meticulously by the branches of the Bank.

E. Management of the Bank: Managing Director, Deputy Managing Director,

Senior Executive Vice President, Executive Vice Presidents, Senior Vice Presidents,

Vice Presidents, Senior Assistant Vice Presidents, Assistant Vice Presidents, etc. are

the people who are holding the managerial positions of the bank.

3.7. Divisions of Shahjalal Islami Bank Ltd.

Shahjalal Islami Bank Ltd. has some major divisions comprising of various

departments. The major divisions are as follows:

a. Investment Division: This division has the authority to determine the party or the

client who will get the credit facility from the bank. The credit clients are selected

according to the criteria of credit policy. This division has the full authority to take


any decision against or favor the client and these divisional works is supported by

the Credit Services Division.

b. Financial Administration Division: This division can handle the credit proposal,

disbursement, monitoring and credit recovery position that is given by all branches.

Each branch has their own credit division and all branch-wise activities are

supported to the head office credit services division.

c. Audit and Inspection Division: This division can control all the financial

position, activities of overall organization. They provide the total budgetary

limitation to every department for the respective year. They also carry out the

financing activities with the access and operational activities.

d. Marketing and Public Relation Division: This division mainly works for:

Improving the marketing network throughout the country

Implementing the marketing strategies and the concept of Trade Marketing

Improving the procedure which is ultimately provided data regarding to

competition and relative market

Arranging the several workshops and seminar this can improve the quality of

existing officers as a competitive edge position.

e. Common Service Division: This division can handle all the genera activities

except the credit and financial sector. All the administration activities are designed

and implemented by this division.

f. Human Resource Division (HRD): This division deals with the employees as

the core resources of the organization. This division mainly emphasis on the

recruitment of employees and the employee benefits and services. The main

philosophy of this division is to motivate the employee to work with efficiently and

effectively.

g. Computer (IT) Division: This division can handle the IT activities. Each branch

has their own IT division and all branch-wise activities are reported to the head

office IT division.

h. International Division: This division can work on internationally. The entire

branch-wise international work is controlled and monitored by this division.

3.8. Capital Structure

At the very inception, Shahjalal Bank started with an authorized capital of BDT 800

million. While its initial paid up capital was BDT 205 million subscribed by the

sponsors in the year 2001. The capital and reserve of the bank as on 31st December,

2008 stood at BDT 4069 million including paid up capital of BDT 2246 million. The


55%

20%

13%

12%0%

Equity Composition of 2008

Paid-up Capital

Statutory Reserve

Retained Earnings

General Provision

Exchange Equalization

Capital Adequacy Ratio (CAR) as of 31st December, 2008 stood at 13.81% (Tier-1

capital 12.24% and Tier-2 capital 1.57%) that was well above minimum requirement

of 10% by Bangladesh Bank.

The capital management framework is designed to ensure that bank maintains

sufficient capital consistent with the bank‘s risk profile, all applicable regulatory

requirement and credit rating considerations. The capital management process is

consistently reviewed by the senior management of the bank. It is frequently reviewed

by the board also and appropriate decisions are being adopted time to time to

strengthen bank‘s capital.

3.9. Company Growth

Growth in Equity: The authorised capital of the bank is BDT 4000 million and paid-

up capital of the bank is BDT 2246 as on 31st December, 2008. Total equity was BDT

4069 million as on 31st December, 2008. These amounts are better than previous

years.

Table 1: Tier-1 Capital (Core Capital) (Amount in million BDT)

Sl. No. Particulars 2008 2007

a Paid-up Capital 2245.98 1871.65

b Statutory Reserve 823.55 510.39

c Retained Earnings 535.91 405.69

Sub Total 3605.44 2787.73

Table 2: Tier-2 Capital (Supplementary Capital) (Amount in million BDT)

Sl. No. Particulars 2008 2007

d General Provision 463.48 252.98

e Exchange Equalization 0.17 0.17

Sub Total 463.65 253.15

Total Equity 4069.09 3040.88

Figure 3: Equity Composition of 2008


340.06848.35

1362.57

3040.88

4069.09

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2004 2005 2006 2007 2008

In M

illio

n B

DT

Equity Movement from 2004 to 2008

2004 2005 2006 2007 2008

Actual 4.69 8.7 10.39 16.42 13.81

Requirement 9 9 9 10 10

4.69

8.7

10.39

16.42

13.81

99

910

10

0

2

4

6

8

10

12

14

16

18

In m

illi

on

BD

T

Capital Adequecy Position from 2004 to 2008

Actual Requirement

Growth in Adequate Capital: Total equity of the bank as on 31st December of 2007

was BDT 3040.88 million and the total equity stood to BDT 4069.09 million on 31st

December of 2008, which was 13.81% of the risk weighted assets as against the

requirement of 10.00%. Though 2008‘s figure is lower than that of 2007 it is still

higher enough than the required adequate capital.

The core capital was 12.24% of risk weighted assets as on 31st December, 2008

against requirement of 5%.

Growth in Deposit: Total deposit of Shahjalal Islami Bank stood at BDT 36484.24

million as on 31st December, 2008 as against BDT 22618.19 million of 31st December,

2007 registering an increase of BDT 13866.05 million, i.e. 61.31% growth. This was

possible due to superior customer service delivery at the branch level, expansion of

branch network to rural areas where foreign remittance flow is significant. The

deposit mix of the bank as on 31st December, 2008 was as bellow:

Figure 5: Capital Adequacy Position from 2004 to 2008

Figure 4: Equity Movement from 2004 to 2008


9091.66

12204.63

18090.65

22618.18

36484.24

0

5000

10000

15000

20000

25000

30000

35000

40000

2004 2005 2006 2007 2008

In M

illi

on

BD

T

Trend of Deposit from 2004 to 2008

4% 5% 2%

58%

26%

5%

Deposit Mix of 2008

Al-Wadia Current Deposit Mudaraba Savings Deposit Mudaraba Short Notice Deposit

Mudaraba Term Deposit Mudaraba Schemes Deposit Other Deposits

Table 3: Deposit Mix (31st December, 2008)

Sl. No. Nature of Deposit BDT in Million Percentage of total Deposit

1 Al-Wadia Current Deposit 1266.56 3.47%

2 Mudaraba Savings Deposit 1863.52 5.11%

3 Mudaraba Short Notice Deposit 765.11 2.10%

4 Mudaraba Term Deposit 21190.16 58.08%

5 Mudaraba Schemes Deposit 9426.65 25.84%

6 Other Deposits 1972.24 5.40%

Total 36484.24 100.00%

Figure 6: Deposit Mix of 2008

Figure 7: Trend of Deposit from 2004 to 2008


22.34%

40.17%

16.60%

0.32% 11.31%

1.69%0.51%

7.06%

Investment Portfolio of 2008

Murabaha Bi-muajjal

Hire-purchase & Ijara Investments against LC

Bill Purchased & Discounted Investment against Scheme Deposits

Quard Others

Growth in Investment: Total investment of the bank stood at BDT 32918.77 million

as on 31st December, 2008 as against BDT 20616.61 million of 31st December, 2007

registering an increase of BDT 12302.16 million, i.e. 59.67% growth. The bank is

careful in deployment of the fund. Mode wise investments‘ portfolio as on 31st

December, 2008 is given below:

Table 4: Investments’ Portfolio (31st December, 2008)

Sl. No.

Nature of Investment BDT in Million Percentage of total Deposit

1 Murabaha 7353.61 22.34%

2 Bi-muajjal 13224.94 40.17%

3 Hire-purchase & Ijara 5463.44 16.60%

4 Investments against LC 106.13 0.32%

5 Bill Purchased & Discounted 3721.76 11.31%

6 Investment against Scheme Deposits 557.61 1.69%

7 Quard 168.33 0.51%

8 Others 2322.95 7.06%

Total 32918.77 100.00%

Figure 8: Investment Portfolio of 2008


7148.6810590.27

15515.79

20616.61

32918.77

0

5000

10000

15000

20000

25000

30000

35000

2004 2005 2006 2007 2008

In M

illi

on

BD

T

Trend of Investment from 2004 to 2008

0

5000

10000

15000

20000

25000

30000

35000

40000

2004 2005 2006 2007 2008

Deposit 9091.66 12204.63 18090.65 22618.18 36484.24

Investment 7148.68 10590.27 15515.79 20616.61 32918.77

In M

illio

n B

DT

Deposit & Investment Growth

Growth in Operating Profit: As of 31st December, 2008; during the year the bank

earned an amount of BDT 5285.39 million and spent an amount of BDT 3475.59

million, resulting a total operating profit of BDT 1809.80 million which increased by

494.79 million over last year. From the operating profit of BDT 145.00 million kept

provision for investment, BDT 70.50 million provision kept for off-balance sheets,

BDT 27.50 million provision kept for investment in securities, BDT 1.00 million

provision kept for other assets and then profit before taxes stood total 1565.80

million and deducting income taxes of BDT 748.09 million, net profit after taxation

stood at BDT 817.71 million. As appropriation of net profit BDT 313.16 million was

Figure 9: Trend of Investment from 2004 to 2008

Figure 10: Deposit & Investment Growth


0

1000

2000

3000

4000

5000

6000

2006 2007 2008

Income 2563.64 3588.84 5285.39

Expenditure& Loss 1718.57 2273.83 3475.59

Operating Profit 845.07 1315.01 1809.8

In M

illi

on

BD

T

Operaring Results

transferred to statutory reserve as per Bank Company Act. 1991 and remaining BDT

504.55 million was transferred to retained earnings.

A summary of operating result of the bank as on December, 2008 vis-à-vis the

position of December, 2007 is shown below:

Table 5: Operating results of the year 2008 & 2007 (Amount in million BDT)

Particulars 2008 2007

Total Income 5285.39 3588.84

Less: Total Expenditure 3475.59 2273.83

Net Profit before Provision & Taxation 1809.80 1315.01

Less: Provisions 244.00 98.70

Net Profit before Taxation 1565.80 1216.31

Less: Provision for Taxation 748.09 569.32

Net Profit 817.71 646.99

Appropriation:

Statutory Reserve 313.16 243.26

Retained Earnings 504.55 403.73

Growth in Branch Network: The bank has been operating with a network of 43

branches1 all over the country. In the year 2008 the bank has opened 7 (seven) new

branches. And till now of 2009 it has already opened 10 (nine) branches. 6 (seven)

more branches2 are going to be opened at 2009. 5 (five) more SME centers and 8

(eight) branches of brokerage house will soon be opened in Dhaka and other

important business locations of our country.

1 See ―Appendix-A: Operating Branches of SJIBL ‖ 2 See ―Appendix-B: Branches going to open in rest of the 2009 ‖

Figure 11: Operating Results from 2006 to 2008


1216

2126

33

49

43

0

10

20

30

40

50

60

2004 2005 2006 2007 2008 2009

Number of Branches

Projected no. of Branches Opened no. of Branches

283

340

377

555

878

0

100

200

300

400

500

600

700

800

900

1000

2004 2005 2006 2007 2008

Manpower Position

Manpower Position

Growth in Human Resources: The bank always laid emphasis on human resources

and its development. The bank believes in the factor that the bank‘s survival is closely

interlinked with the quality of service and satisfaction of the client that directly

depends on qualification and efficiency of the employees. With this objective in view,

the bank excels the performance of its member of the staff by creating opportunities

through providing proper training, rewards and recognition. To attract and retain

qualified and efficient staff, the bank has formulated a number of well thought

policies for the welfare of its employees, in the form of gratuity fund, social security

fund, employees‘ house building investment scheme, employees‘ car financing

scheme, benevolent fund & employees‘ house furniture allowance, etc. Total number

of manpower of the bank stood at 878 on 31st December, 2008 as against 555 of 31st

December, 2007.

Figure 12: Number of Branches

Figure 13: Manpower Position from 2004 to 2008


3.10. Corporate Social Responsibility (CSR)

As an Islamic bank & body corporate, Shahjalal Islami Bank is quite conscious of its

social responsibility. Having due regards to this the bank has already formed Shahjalal

Islami Bank Foundation with the aim to serve humanity through different welfare

activities giving emphasis on Health, Habitat & Education.

Education: The bank‘s foundation has planned to establish Shahjalal Islami Bank

International School & College. It may further be mentioned here that the bank has

declared permanent education award for the students who secure first, second & third

place in MBA Examination with Islamic Economics and Banking as one of the

subject under the department of Banking of the University of Dhaka. Besides, the

bank has started its scheme of awarding Scholarship to poor but meritorious students

with outstanding result in Secondary School Certificate (SSC) and Higher Secondary

Certificate (HSC) Examinations for pursuing their higher studies on a regular basis.

The bank is also offering investment scheme for education.

Health: The Bank has a plan to establish Shahjalal Islami Bank Hospital. In various

disasters like flood, tornado, etc. bank has come forward with relief for the affected

people. Besides, for this purpose bank has donated BDT 4.0 million to Prime

Minister‘s Relief Fund and has also donated BDT 2.0 million to Army‘s Relief Fund.

Rural Development: Through the rural branches of the bank, Shahjalal Islami Bank

Ltd. is conducting Rural Investment Program (RIP). Under this program the bank is

giving loans in agro processing and in setting up agro-based industry in the rural area.

The bank is providing more and more SME loans for generating more and more

employment opportunity, ensuring higher income of people and high living standard.

Shahjalal Islami Bank is offering various investment schemes which are very much

appropriate for individuals, doctors, engineers, and other salaried people. More and

more welfare activities and Institutional Development Programs are planned to be

performed by the bank and its foundation in future in a view to serve the country‘s

people.


3.11. Products

3.11.1. Deposit Accounts

a. Al-Wadiah Current Deposit Accounts (ACD)

Minimum amount for Current Deposit Account: Al-wadiah current deposit

accounts shall be opened with a minimum of BDT 5,000/ which is also the

minimum balance required to be maintained by the Account holder.

Payment on Accounts demand: Funds in the Al-wadiah current deposit are

payable on demand and the Bank guarantees repayment of such funds in full,

less the bank charges, if any in accordance with normal banking traditions,

during the banking hours.

No Profit: No profit on Al-wadiah current deposit Account balances is

allowed and the Bank at its own discretion uses the funds of Al-wadiah current

deposit accounts without any risk to the account holder.

b. Mudaraba Saving Deposit Accounts (MSD)

Payment on Accounts demand: Funds in the mudaraba savings deposit are

payable on demand and the bank guarantees repayment of such funds in full,

less the bank charges, if any in accordance with normal banking traditions,

during the banking hours.

Rate of Profit: Mudaraba savings deposit accountholder get a specific rate of

mark-up profit against their balance in that account. Now the profit rate is 4%.

c. Mudaraba Short Notice Deposit Accounts (MSND):

Period of Notice:

o The deposits held in these accounts shall be payable on short notice

period but the notice must not be less than 7 days.

o The deposits may be accepted for the period and rates of profit are fixed

by head office from time to time.

Profit shall be paid only for each day held, but profit on notice

period will be forfeited; if withdrawn without notice.

Profit on MSND account shall be applied on yearly basis (i.e.

December each year).

d. Mudaraba Term Deposit Accounts (MTD)

Amount & the Period of Mudaraba Term Deposit:

o Mudaraba Term Deposit Account shall be opened for a fixed period

varying from 90 days, 180 days, 360 days or above and are payable at a

fixed date of maturity.


o Mudaraba Term Deposit Accounts can be opened with a minimum

deposit of BDT 2,000.

Rate of Profit: Profit on Mudaraba Term Deposit Account shall be at rates

fixed by Head office from time to time depending on their period of maturity.

Deposit of Longer duration naturally earns higher return at higher weightage.

Profit on Mudaraba Term Deposit Account shall be payable at maturity of the

deposits. The customers will have the option of withdrawing profit

accumulated at maturity or on half yearly basis or may leave the profit with the

principal.

Separate Contract:

o Each time a Mudaraba Term Deposit Account is opened it shall be

considered as a separate contract and various deposits in the name of

the same depositor or in the name of the members of the same family

shall not be treated as one deposit.

o The depositors of this category also give their explicit consent in

writing, through acceptance of rules, appearing on reverse of AOF,

governing such deposit to the Bank to invest the same in any business it

deems fit according to the principles of Islamic Shariah.

Various Kinds of Accounts: Branches may open any of the following kinds of

accounts under above types:

Accounts of Individuals

Joint Accounts

Proprietary Concerns

Partnership Concerns

Accounts of Public Limited Companies/Corporations/ Autonomous bodies

Accounts of Private Limited Companies

Trust Accounts

Accounts of Liquidators

Accounts of Societies, Associations, Clubs

Accounts of Local Authorities. etc.


3.11.2. Deposit Schemes

The name of the SJIBL deposit schemes are mentioned below:

Mudaraba Monthly Income Scheme

Mudaraba Double Money Scheme

Mudaraba Monthly Deposit Scheme

Mudaraba Millionaire Scheme

Mudaraba Haji Deposit Scheme

Mudaraba Housing Deposit Scheme

Mudaraba Small Business Scheme

Mudaraba Cash Waqf Deposit Scheme

Mudaraba Lakhopoti Deposit Scheme

Mudaraba Bibaho Deposit Scheme

Mudaraba Mohor Deposit Scheme

Mudaraba Sikhkha Deposit Scheme

Mudaraba Special Term Deposit Scheme

3.11.3. Investment Schemes

a. Small Business Investment Scheme

Target groups:

Small Businessmen like Wholesaler, Retailer, Small Manufacturer/Producer and

Trader etc.

Self-Employed Person like Doctors/Engineers/Professionals etc.

Small & Cottage Industries.

Other existing & new small business, micro & small industries and commerce.

Mode of Investment: There are four modes of investment under small business

investment scheme. These are:

a. Hire Purchase under Shirkatul Meelk (HPSM)

b. Lease/Ijara

c. Bai-Muajjal-Commercial-TR

d. Bai-Muajjal (Term)

Ceiling of Investment: The amount of investment shall be BDT 50,000 to BDT

5,00,000 (BDT fifty thousand to BDT five lac). Maximum ceiling of the investment

will be BDT 3,00,000 (BDT three lac) only for any region other than Dhaka &

Chittagong Metropolitan Area. However, investment may be extended beyond the

ceiling at the discretion of the Management. Bank investment-Client equity ratio

where applicable shall be 60:40.


Tenure of Investment

In case of HPSM, Lease and Bai-Muajjal (Term): Maximum tenure will be

3 years i.e. 36 months (a period of 3 months may be allowed as grace period to

the deserving client)

In case of Bai-Muajjal-Commercial-TR: Maximum tenure will be 1 year i.e.

12 months and renewable on satisfactory performance.

Rate of Profit/Rent: Rate of profit/rent is 15.00% p.a.

Fees and Charge: Application fee of BDT 100 (non refundable) and processing fee

of BDT 500 (non refundable). Supervision charge will be @ 2.00% per annum.

Risk Fund: Risk fund will be @ 1.00% per annum.

Security: Both general & specific securities are maintained. These are as follows-

General Security for each case

o Hypothecation of Stock/Equipments

o The stock/equipments should be duly and properly insured to cover the

risks of probable hazards

o 01 (one) post dated master cheque in favor of SJIBL covering the

investment

o Post dated cheque against each installment/ deal

o Trust Receipt(s) duly executed by the Client along with delivery order(s)

for each deal (in case of BMTR)

o Personal guarantee of the client, spouse and adult son(s) & daughter(s),

if any of the client

Specific Security for the investment not exceeding BDT 2,00,000 :

Personal guarantee from two persons having good financial means & standing

and acceptable to the Bank

Specific Security for the investment exceeding BDT 2,00,000 : Registered

mortgage of immovable property owned by the client(s) or by a third party

acceptable to the bank having-

o Forced sale value of double the amount of investment under the Bai-

Muajjal-Commercial-TR facility

o In case of HPSM, Lease and Bai-Muajjal (Term) investment, forced sale

value of collateral security should not be less than 1.50 times of the

Bank‘s investment.


b. Household Durables Investment Scheme

Purpose

Facilitate investment to purchase household durables to the different low &

medium income honest businessman/professionals.

Socio-economic improvement of the country through improvement of life

style of the low & medium income people

Target groups

Government Organizations

Semi-Government & Autonomous Organizations

Different Corporations

Multi-national Companies

Different local renowned Non-governmental Organizations

Different Banks and Financial Institutions (Including Shahjalal Islami Bank

Ltd.)

Different Insurance Companies

Different renowned University, College, School & Madrasha besides

Government University, College, School & Madrasha

The persons serving in Military and Paramilitary

Acceptable persons to the Bank's Management

Genuine businessman having valid Trade license, VAT certificate, TIN

certificate and Monthly Income evidenced by relevant documents may be

included as client

Note

In case of service holder minimum service length requirement is 3 years which

may be relaxed for the client having banking service

In case of businessmen minimum business experience requirement is 5 years that may be relaxed on special consideration

Ceiling of Investment

Maximum ceiling of the investment will be BDT 5.00 lac per client

Size of the investment will be fixed as such the monthly installment against the investment would not exceed 25% of client‘s monthly salary/income

Basic Features

Mode of Investment: Hire Purchase under Shirkatul Meelk / Hire Purchase.

Period of Investment : Maximum 05 (five) years

Client's Equity: Minimum 25%.


Profit & Charges: Profit rate is 16% p.a. Service charge is 1.00% p.a. on approved limit to be realized upfront and risk fund is 1.00% to be realized at the time of disbursement.

Repayment Procedure: Monthly instalment basis.

Securities: o The ownership of the item(s) shall be in the name of the Bank o One post dated master cheque, covering the facility amount (with profit) o Post-dated cheques against each monthly installment o Personal guarantee from two persons having good financial means &

standing and acceptable to the Bank c. Car Purchase Investment Scheme Maintaining a car now-a-days is no more a luxury, but an essential part of daily

working life to add speed to its performance and taking this as view Shahjalal Islami

Bank has introduced Car Purchase Investment Scheme. Brand new or reconditioned

private car, microbus & jeep can be purchased under this scheme.

Eligibility

Age between 20 to 55 years

Worthy businessman having trade license, VAT certificate and TIN

Professionals like Physicians, Engineers, etc.

Permanent employees of- o Govt., Semi Govt. and Autonomous Bodies o Banks and financial institutions o Senior teachers of University, Govt. School, College and Madrasha o Executives/Officers of Multinational Companies and renowned NGOs

Ceiling: Maximum BDT 40.00 lac for brand new car and maximum BDT 30.00 lac for reconditioned car.

Period: Maximum 5 years for brand new car and maximum 4 years for reconditioned car.

Down payment: Minimum 10 % for brand new car and minimum 20 % for reconditioned car.

Profit Rate: Most competitive in the market.

Special Feature: Registration cost and comprehensive insurance cost can be included in the total cost. 1% rebate, if all the installments are paid in due time.

d. CNG Conversion Investment

CNG conversion of vehicle fuel system offers low fuel cost and save money. Shahjalal

Islami Bank‘s CNG conversion investment scheme offers loan while anyone needs

money for this purpose.


Eligibility

Any permanent salaried executives of Corporate Houses, Renowned Private Companies, Banks, NBFI, Multi National Company(s), Renowned NGOs, Government Office, Semi-Government and Autonomous Bodies

Self-employed persons like Doctors, Engineers, Charted Accountants, etc.

Worthy businessman having trade license, VAT certificate and TIN

Ceiling: BDT 40,000 to BDT 1,00,000.

Period: Maximum 18 months.

Profit Rate: Most competitive in the market.

Special Feature: No down payment requires.

e. Overseas Employment Investment Scheme Overseas employment investment scheme is for people who are keen to go abroad

and wish to contribute our country by sending money in the form of remittance. This

scheme ensures the cost of passage.

Any Bangladeshi Citizen intends to go abroad with employment under genuine work

permit Visa is considered as eligible person. The client who wants to avail this facility

must maintain F/c Account with the bank till full adjustment of the facility. Besides

no margin is required and partial adjustment or Full Pre-payment of liability at any

time is allowed without any early settlement charge.

Investment Amount: Maximum BDT3,00,000

Period: Maximum 36 months with 02 (two) months moratorium period

Age: 18 years to 45 years

Repayment Mode: Equal monthly installments

Profit Rate: 14% per annum

f. Investment Scheme for Doctors To set up or renovate your Chamber, Clinic or Diagnostic Center with necessary

medical Equipments or to purchase personal necessary medical Equipments this

scheme is offered to the doctors. Bangladeshi salaried or a self employed Doctor

having at least 2(two) years professional experience is considered as eligible person.

Here partial adjustment or full pre-payment of liability at any time allowed without

any early settlement charge.

Investment Ceiling: Maximum BDT5,00,000 for general doctors and maximum BDT 1 0,00,000 for specialist doctors

Period: Maximum 60 months

Age: 25 to 60 years


Profit Rate: The most competitive within doctors‘ reach


g. Investment Scheme for Executives Any Bangladeshi salaried executives of Corporate Houses, Banks, NBFI, Multi

National Company(s), Government Office & Semi-Government Office can avail this

facility. Under this scheme salary A/c & end service benefit will be under lien till full

adjustment of the liability and partial adjustment or full pre-payment of liability at any

time allowed without any early settlement charge.





Profit Rate: The most competitive within executives‘ reach

h. Investment Scheme for Marriage Any Bangladeshi salaried or a self employed person having 2 (Two) years professional

experience can avail this facility. Partial adjustment or full pre-payment of liability at

any time allowed without any early settlement charge.





Profit Rate: The most competitive within one‘s reach

i. Investment Scheme for Education Any Bangladeshi credit worthy salaried or a self-employed person can avail this facility

for their Children to pay the tuition fees, to pay the hostel fees, to meet travel

expenses or to purchase computer, books etc. Student file must be maintained with

Shahjalal Islami Bank Ltd. Partial adjustment or full pre-payment of liability at any

time allowed without any early settlement charge.

Investment Amount: In Bangladesh investment amount is maximum BDT 7,00,000 and in abroad investment amount is maximum BDT 15,00,000


Margin: In Bangladesh 10% margin and in abroad 20% margin


Profit Rate: 14% per annum

j. Housing Investment Scheme

To make housing facility easier to middle income group people of various professions

Shahjalal Islami Bank has introduced this scheme. Any Bangladeshi person who is

below 65 years of age who is an existing dependable client of the bank or engaged in


one of the following professions will be considered as eligible person primarily for

this scheme:

Any martial employee performing job

Full time teacher of college or university

Related degree holder doctor, engineer & other established professionals

Wage earners

Regular employee of any government organization, semi-government

organization, reputed private organization, multinational company,

donor agency or well reputed public limited company.

Investment Ceiling: Investment ceiling will be determined by considering the

repayment power of the client, but this will not cross BDT 7.5 million.

Period: From 1 year to 20 years.

Profit Rate: Profit rate will be fixed by the bank and client will get 1% rebate

for regular and timely payment of installment.

Investment Mode: Higher purchase under Shirkatul Melk.

Repayment Mode: By equal monthly installment.

Securities/ Collateral: Building with land, apartment/ flat, other supportive

securities that will provide help in granting investment.

k. SME Investment Products

i. Prottasha for Small Enterprises: Shahjalal Islami Bank Limited (SJIBL) is

firmly committed to implement and materialize the economic and financial

principles of Islam in the Banking Arena. The very essence of Islamic mode of

banking is to remove the disparity through establishing equity justice in trade,

commerce and industry sector, creating opportunities for employment,

boosting up income generation which ultimately helps alleviation of poverty

from the society. Keeping the view and as an active contributor in the

economic growth of Bangladesh, Shahjalal Islami Bank Ltd. has initiated SME

Investment throughout the country.

ii. Prottasha for Women Entrepreneur: It is well-known that women's

empowerment and economic development go hand-in-hand. Now-a-days

Women Entrepreneurs are receiving greater attention from policymakers and

experts in developed and developing countries. In our country, Women

Entrepreneurs are also encouraged to contribute to the national economy

through establishing and expanding small & medium enterprises all over the

country. Shahjalal Islami Bank Limited (SJIBL) is extending investment to

Women Entrepreneurs for their business all over the country through its Small


& Medium Enterprise (SME) Investment program on easy terms and

conditions.

Target group: For both above investment products target group is as follows:

Small sized Trading, Manufacturing and Service oriented business

Small Agro-based industries and non-firm business

Purpose:

To meet Working Capital requirements of an existing business

To purchase fixed assets for an existing business except land and

building

Investment Ceiling: In case of Prottasha for Small Enterprises minimum

investment ceiling is BDT 0.2 million and maximum ceiling is BDT 3.0 million.

On the other hand in Prottasha for Women Entrepreneur minimum

investment ceiling is BDT 0.2 million and maximum ceiling is BDT 1.5 million.

Tenor: Minimum 12 months and maximum 36 months

Repayment: By easy monthly installment

Profit Rate: Most competitive in the market

Security:

Personal guarantee

Collateral security (case to case)


3.12. Services

3.12.1. Online Banking Services To provide better services to the valued customers using the latest technology and

electronic media competing with other private banks to set and establish full

automated, online, centralized banking systems interfacing (connecting software) with

all delivery channels like: ATMs, POS, etc. Online banking/ any branch banking is a

system where transactions, query and statements of any client of a branch may be

carried out from another branch of the bank.

3.12.2. SJIBL VISA Card Services Card is considered as a new dimension of product resulting

from technological development in the banking arena. In line

with our affiliation with VISA International for VISA ATMs

and POS, the following two products are launched broadening

service products of the Bank to the clients:

a. VISA Electron (SJIBL VISA Debit Card - local)

b. VISA Prepaid (SJIBL VISA Prepaid Card)

i. SJIBL VISA Prepaid (Prepaid Card – Local)

ii. SJIBL VISA Prepaid (Prepaid Card – International)

iii. SJIBL VISA Prepaid (Prepaid Card – Dual)

iv. SJIBL Souvenir Card (Gift Card – Local)

SJIBL VISA Debit Card: To a customer, "My card, my money" concept is used for

Debit Card. Any accountholder of SJIBL can apply for a SJIBL VISA Debit Card

against his/her Al-Wadiah Current Deposit (AWCD), Mudaraba Savings Deposit

(MSD) or Mudaraba Short Notice Deposit (MSND) Account. He/she is fully

authorized to enjoy the benefits of cash withdrawal from ATMs, liberty of shopping,

dining, paying utility bills and having access account information through SMS, etc.

round the clock.

SJIBL VISA Prepaid Card (Local): SJIBL VISA Prepaid Local Cards are open to

the customers even having no account with Shahjalal Islami Bank Limited.

Cardholders can have the card against prepayment and have access from anywhere in

Bangladesh. SJIBL VISA Prepaid Local Cards are accepted locally at all VISA labeled

merchant outlets, ATMs, etc.

SJIBL VISA Prepaid Card (International): SJIBL VISA Prepaid International

Cards are also open to the customers even having no account with Shahjalal Islami

Bank Limited. Cardholders can have the card endorsing US Dollar paying against

Travel Quota, Exporters Retention Quota or marking Lien of his/her FC Account.


SJIBL VISA Prepaid International Cards are accepted worldwide at all VISA labeled


SJIBL VISA Prepaid Card (Dual): SJIBL Souvenir Card is attractive and stylish

product by its feature. Like a Gift Card, SJIBL Souvenir Card can be used by anyone

wishes to. The intending customer may have the card instantly or may customize the

card as required. The SJIBL Souvenir Cards are accepted locally at all VISA labeled


Features of SJIBL VISA Card: Features of SJIBL VISA Cards are as follows:

24/7 banking hour

Directly linked to Cardholders Account at SJIBL (AWCD/MSD/MSND)

Convenient Cash Withdrawal at ATMs

Accepted at all VISA terminals locally & globally

Local & International transactions with the same card (for Dual Cards)

Balance Inquiry

Mini Statement

PIN Change

No Cash Advance Fee at SJIBL ATMs

1 (one) free supplementary card

Account is not required for Prepaid cards

SMS Notification Service

SJIBL VISA Card can be used at Q-Cash, DBBL, BRAC Bank and all VISA

labeled ATMs in Bangladesh

Shopping at a large number of Q-cash POS terminals around Bangladesh

Payment of utility bills

Has usage limit3

3.12.3. SMS/Push Pull Services This automated SMS/Push Pull can be reached 24 hours a day, 7 days a week. The

following services and information clients can get through SMS/Push Pull Service of

SJIBL:

Balance inquiry

Cheque book requisition

Cheque leaf status

FC Rate information

3 See ―Appendix C‖


Cheque stop payment instruction

Statement request by courier/ post

Statement request by E-mail

Last three transactions‘ statement

Help Inquiry

PIN change

3.12.4. Foreign Remittance Services 3.12.4.1. Western Union: Western Union Financial Services Inc. U.S.A. is the

number one and reliable money transfer company in

the world. This modern Electronic Technology based

money transfer company has earned worldwide

reputation in transferring money from one country to another country within the

shortest possible time. It has over 3,45,000 agent locations across 200 countries and

territories.

Shahjalal Islami Bank Limited has set up a Representation Agreement with Western

Union Financial Services Inc. U.S.A. Millions of people have confidence on Western

Union for sending money to their friends and family. Through Western Union Money

Transfer Service, Bangladeshi Wage Earners can send money quickly from over

3,45,000 Western Union Agent Locations in over 200 countries and territories

worldwide- the world‘s largest network of its kind, only by visiting any branches of

Shahjalal Islami Bank Limited in Bangladesh.

Western Union money transfer is reliable because each transfer can be tracked

electronically and money can be received within a minute of sending from the foreign

country just by filling a simple form. No bank account is required. Only MTCN is

needed.

3.12.4.2. Kushiara: Kushiara Money Transfer‘s a definition of safety and reliability

and a popular Money Transfer Company in United Kingdom (U.K.). It has 200 agent

locations all over UK. Kushiara offers

―Instant Cash‖ next day collection from

Bank counter at most cities in Bangladesh

and "Quick Credit" to beneficiary‘s account in all over the Bangladesh. Transfer of

money is processed after the remittance request and the bank posts the customers‘

copy of the remittance form to customers‘ given address after the fund are cleared.

The usual times for clearing of cheques require 3-5 working days. The Remittance

Form can be downloaded from the website: www.kushiara.net.


Proof of name & address of remitter is required in case of transaction over equivalent

Euro 1000 under the Government anti money laundering regulations. All transactions

are authorized under the money laundering regulation. Kushiara has all necessary

licenses to carry out the financial service business it offers.

3.12.4.3. SWIFT: Shahjalal Islami Bank Limited is a member of the Society for

Worldwide Inter Bank Financial Telecommunication (in

abbreviation S.W.I.F.T.) SWIFT is the industry-owned co-

operative supplying secure, standardized messaging services and

interface software to nearly 8,300 financial institutions in 208

countries and territories. SWIFT members include banks, broker-

dealers and investment managers. The broader SWIFT community also encompasses

corporate as well as market infrastructures in payments, securities, treasury and trade.

SJIBL SWIFT codes are given at ―Appendix D‖.

3.12.5. Capital Market Services Shahjalal Islami Bank commenced its Brokerage House operation in the year 2008

through a separate division named ‗Capital Market Service Division‘ (CMSD). CMSD

provides BO Account facility and margin facility to its customers to invest in the

secondary markets. Diversified products with different category of investment ceiling

and other value added services are also available for customers. The customers were

also provided with assisted services facilities on the basis of published information

and accounts. The division managed portfolio value of more than 833 million under

margin accounts. As a result, profitability of CMSD shown significant positive trend

during 2008. Divisional contribution was 2.21% percent to total operating profit

before Provision and taxes of the Bank. The Bank has established a well decorated

and highly technology based trading facilities for the connivance of the customers.

3.12.6. SME Services Shahjalal Islami Bank Ltd. provides small & medium enterprises SME services

through its eight SME service centers. These are as follows:

Kamal Bazar SME Service Center, Chittagong

Shafipur SME Service Center, Gazipur

Jatrabari SME Service Center, Dhaka

Elephant Road SME Service Center, Dhaka

Mirpur-1 SME Service Center, Dhaka

Islampur SME Service Center

New Eskaton SME Service Center, Dhaka

Shariatpur SME Service Center, Shariatpur


3.12.7. Other Services Shahjalal Islami Bank Ltd. also serves customers by colleting bills & charges through

all of its branches. Grameenphone subscribers can to pay their bills, advances, security

deposit and other related charges through all branches of Shahjalal Islami Bank

Limited. Electricity bill is also collected throughout the branches of Shahjalal Islami

Bank Ltd.

3.13. Performance of the Bank (Ratings)

3.13.1. Credit Rating Credit rating of the bank was performed by Credit Rating and Information Services

Limited (CRISL). In their report (Report: RR/253/09) of April 2009, they rated the

bank as AA- (double A minus) for long term and ST-2 for short term. The gradation

in long term rating has been done in consideration of its good capital adequacy,

appropriate asset quality, increased non-funded business and sound liquidity position.

The short term rating indicates high certainty of timely repayments of financial

obligations. Risk factors are very small. The long term rating is valid for only one year

and the short term rating is for six months.

CRISL also viewed the bank with ‗Stable Outlook‘ in consideration of its overall

performance, improvement in asset quality, growth in investment and deposits.

The capital adequacy of SJIBL stood at 13.81% at the end of FY 2008 against

regulatory requirement of 10%. The asset quality of the bank has improved and at the

end of FY2008 non-performing asset stood at only 0.44%. During FY 2008, the

deposit mobilization had significant growth of 61.30% and stood at BDT 36,484.24

million. This augmented investment growth by 59.67% as well as asset growth by

59.51% in FY 2008. The equity growth during FY 2008 was 29.33%, supported by

after-tax profit growth of 26.39%. The financial performance of the bank was good

and almost stable in FY 2008 compared to previous year‘s performance. During FY

2008, the bank has shown outstanding growth in non-funded business; doing better in

all area of export, import and inward remittance. SJIBL has been maintaining

satisfactory liquidity and its short term and long term liabilities (up to five years) are

also backed by adequate volume of assets. The bank maintained a surplus amount of

provisions against its non-performing investment (NPI), to cover risk in future. The

NPI coverage ratio stood at 325.06% at the end of FY 2008.


Table 6: Credit Rating Result from 2006 to 2008

Long Term Short Term

Surveillance Rating-2008 AA- ST-2

Surveillance Rating-2007 A+ ST-2

Surveillance Rating-2006 A ST-2

Outlook Stable

Date of Rating Declaration April 25, 2009

3.13.2. CAMELS Rating

Central bank, the regulatory authority of country‘s banking sector rate the positions of

different banks based on their performances using the ―CAMELS‖ rating system

which is a supervisory rating of the bank's overall condition. There are six

components of a bank's condition that are assessed under this system: capital

adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk.

So, the ―CAMELS‖ rating gives an overall view to a bank‘s performance.

CAMELS rating published this year based on the performance of the banks during

2008 rates Shahjalal Islami Bank Ltd. as ―Strong or A-class Bank‖. Last year also this

bank was rates as ―Strong or A-class Bank‖. This shows that Shahjalal Islami Bank

Ltd. is performing consistently well.

Figure 15: Short Term Credit Rating of SJIBL from 2006 to 2008

Figure 14: Long Term Credit Rating of SJIBL from 2006 to 2008

Chapter 4: Assessing Customer Satisfaction of SJIBL Page | 36

Chapter 4: Assessing Customer Satisfaction of SJIBL

4.1. Literature Review

Superior service quality is widely acknowledged as a driver of perceived value, which,

in turn, will enhance customer loyalty (Parasuraman and Grewal, 2000) and improve

the provider‘s image, sales and profitability (Buzzell and Gale, 1987; Gummesson,

1993).

Because satisfaction is basically a psychological state, care should be taken in the

effort of quantitative measurement, although a large quantity of research in this area

has recently been developed. Work done by Berry, Brodeur between 1990 and 1998

defined ten 'Quality Values' which influence satisfaction behavior, further expanded

by Berry in 2002 and known as the ten domains of satisfaction. These ten domains of

satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access,

Environment, Interdepartmental Teamwork, Front line Service Behaviors,

Commitment to the Customer and Innovation. These factors are emphasized for

continuous improvement and organizational change measurement and are most often

utilized to develop the architecture for satisfaction measurement as an integrated

model. Work done by Parasuraman, Zeithaml and Berry between 1985 and 1988

provides the basis for the measurement of customer satisfaction with a service by

using the gap between the customer's expectation of performance and their perceived

experience of performance. This provides the measurer with a satisfaction "gap"

which is objective and quantitative in nature. Work done by Cronin and Taylor

propose the "confirmation/disconfirmation" theory of combining the "gap" described

by Parasuraman, Zeithaml and Berry as two different measures (perception and

expectation of performance) into a single measurement of performance according to

expectation. According to Garbrand, customer satisfaction equals perception of

performance divided by expectation of performance.

4.1.1. Definition of Customer

The word derives from "custom," meaning "habit"; a customer was someone who

frequented a particular shop, who made it a habit to purchase goods of the sort the

shop sold there rather than elsewhere, and with whom the shopkeeper had to

maintain a relationship to keep his or her "custom," meaning expected purchases in

the future.

A customer, also called client, buyer, or purchaser, is usually used to refer to a

current or potential buyer or user of the products of an individual or organization,

called the supplier, seller, or vendor. This is typically through purchasing or renting

goods or services.


The word ―customer‖ has neither been defined by the Negotiable Instrument nor by

any other law. So, in the field of banking it is not cleared yet. According to Paget the

following characteristics will be present:

a. There must be recognizable course or habit of dealing between the customer

and a bank.

b. Dealing between him and the bank must be in the nature of regular banking

business.

The Kerala high court in the case of Central Bank of India Limited, Bombay vs.

Gopinathan Nair and others (1970) said, ―Broadly speaking, a customer is a person

who has the habit of resorting to the same place or person to do business so far as the

banking transactions are concerned. He is a person whose money has been accepted

on the footing that the banker will honour his cheques up to the amount standing to

his credit irrespective of his connection being of short or long standing‖

In this study the ―customer‖ means those persons who have at least one active

account of any kind at Shahjalal Islami Bank Limited (Keraniganj Branch).

4.1.2. Definition of Satisfaction

Satisfaction is ―the contentment one feels when one has fulfilled a desire, need, or

expectation; "the chef tasted the sauce with great satisfaction". Here in the study

customers agreement (agree & strongly agree) with the survey‘s statements will

indicate their satisfaction.

4.1.3. Definition of Customer Satisfaction

Customer satisfaction, a business term, is a measure of how products and services

supplied by a company meet or surpass customer expectation. It is seen as a key

performance indicator within business and is part of the four perspectives of a

Balanced Scorecard. In a competitive marketplace where businesses compete for

customers, customer satisfaction is seen as a key differentiator and increasingly has

become a key element of business strategy

In this study customer satisfaction will be treated as at well level if it has CSI score of

4 or more when overall weighted satisfaction will be measured.

4.1.4. Why to Measure Customer Satisfaction

With the phenomenal increase in the country's population and the increased demand

for banking services; speed, service quality and customer satisfaction are going to be

key differentiators for each bank's future success. Thus it is imperative for banks to

get useful feedback on their actual response time and customer service quality aspects


of retail banking, which in turn will help them take positive steps to maintain a

competitive edge.

Organizations are increasingly interested in retaining existing customers while

targeting non-customers; measuring customer satisfaction provides an indication of

how successful the organization is at providing products and/or services to the

marketplace.

Lord William Thomson Kelvin (1824-1907) said, "If you cannot measure it, you cannot

improve it." So to improve customer satisfaction level, measurement of customer

satisfaction is must.

Satisfied customers are central to optimal performance and financial returns. In many

places in the world, business organizations have been elevating the role of the

customer to that of a key stakeholder over the past twenty years. Customers are

viewed as a group whose satisfaction with the enterprise must be incorporated in

strategic planning efforts. Forward-looking companies are finding value in directly

measuring and tracking customer satisfaction (CS) as an important strategic success

indicator. Evidence is mounting that placing a high priority on CS is critical to

improved organizational performance in a global marketplace.

With better understanding of customers' perceptions, companies can determine the

actions required to meet the customers' needs. They can identify their own strengths

and weaknesses, where they stand in comparison to their competitors, chart out path

future progress and improvement. Customer satisfaction measurement helps to

promote an increased focus on customer outcomes and stimulate improvements in

the work practices and processes used within the company.

When buyers are powerful, the health and strength of the company's relationship with

its customers – its most critical economic asset – is its best predictor of the future.

Assets on the balance sheet – basically assets of production – are good predictors only

when buyers are weak. So it is no wonder that the relationship between those assets

and future income is becoming more and more tenuous. As buyers become

empowered, sellers have no choice but to adapt. Focusing on competition has its

place, but with buyer power on the rise, it is more important to pay attention to the

customer.

Requirement of ISO 9000:2000

Measurement of Customer Satisfaction is a new significant addition to the new

ISO9000: 2000 standard. Organizations certified to this standard are now required to

identify parameters that cause customer satisfaction or dissatisfaction and consciously

measure them.


Clause 8.2.1 in ISO 9000: 2000 states: "As one of the measurements of the

performance of the Quality Management System, the organizations shall monitor

information relating to customer perception as to whether the organization has met

customer requirements. The methods for obtaining and using this information shall

be determined."

The requirement has been there in the QS 9000 standard clause 4.1.6 which says: "...

Trends in customer satisfaction and key indicators of customer dissatisfaction shall be

documented and supported by objective information. These trends shall be compared

to those of competitors, or appropriate benchmarks, and reviewed by senior

management."

4.2. Process used in Assessing Customer Satisfaction Level of SJIBL

(Keraniganj Branch)

4.2.1. The Customer Satisfaction Measurement Model

There are various models that are used in measuring the level of customers‘

satisfaction4.

I have calculated the Customer Satisfaction Index (CSI). Because, it looks pretty

smarter as it shows the satisfaction level as one number and this measure model

considers various parameters and this is easy to calculate.

The Customer Satisfaction Index represents the overall satisfaction level of that

customer as one number, usually as a percentage. Plotting this Satisfaction Index of

the customer against a time scale shows exactly how well the supplier is accomplishing

the task of customer satisfaction over a period of time.

4.2.2. The Questionnaire/ Instrument

I have followed the process of face to face interview in measuring the customers‘

satisfaction level. Because, it was convenient for me as I have passed much time at the

bank during my internee program. The information collection was performed by

using RATER or SERVQUAL Instrument.

In the mid eighties, Parasuraman, Zeithaml and Berry (1988, 1991) conducted

extensive studies in different industries and developed the SERVQUAL instrument: a

22-item scale with a set of service quality dimensions to quantify a customer‘s

assessment of a company‘s service quality. Five key dimensions of service quality —

reliability, responsiveness, assurance, empathy and tangibles — have been identified and form

the foundation on which a lot of other studies on service quality have been built. By

the early nineties the authors had refined the model to the useful acronym RATER.

4 See ―Appendix E‖


SERVQUAL is widely recognized and used, and it is regarded as applicable to a

number of industries, including the banking industry (Yavas, Bilgin, Shemuell, 1997).

Nyeck, Morales, Ladhari, and Pons (2002) stated the SERVQUAL measuring tool

―remains the most complete attempt to conceptualize and measure service quality‖ (p.

101). The main benefit to the SERVQUAL measuring tool is the ability of researchers

to examine numerous service industries such as healthcare, banking, financial services,

and education (Nyeck, Morales, Ladhari, & Pons, 2002).

The SERVQUAL instrument has been the predominant method used to measure

consumers‘ perceptions of service quality. It has five generic dimensions or factors of

service quality that are stated as follows (Van Iwaarden et al., 2003):

a. Reliability: Ability to perform the promised service dependably and accurately;

b. Assurance (including competence, courtesy, credibility and security):

Knowledge and courtesy of employees and their ability to inspire trust and

confidence;

c. Tangibles: Physical facilities, equipment and appearance of personnel;

d. Empathy (including access, communication, understanding the customer):

Caring and Individualized attention that the firm provides to its customers;

e. Responsiveness: Willingness to help customers and provide prompt service.

Using this RATER/SERVQUAL instrument5 I have collected customers‘ degree of

agreement with 22 different statements categorized under 5 major dimensions. These

five dimensions indicate various influencing forces in satisfying customers.

The parameters covered by this RATER/ SERVQUAL instrument are as follows:

a. Reliability:

Act according to Promises

Sincere Interest in Problem Solving

Performs the Service Right the First Time

Provides Services at the Time Promised

Insists on Error Free Records

b. Assurance:

Employees Behavior Instill Confidence in Customers

Customers Feel Safe in Transaction

Consistent Courtesy of Employees

Employees have the Knowledge to Answer Customers' Question

5 See ―Appendix F‖


c. Tangibles:

Modern Looking Equipments

Visually Appealing Physical Facilities

Neat Appearance of Employees

Appealing Appearance of Materials

d. Empathy:

Gives Customers Individual Attention

Has Convenient Operating Hours for Customers

Has Employees to Give Customers Personal Attention

Has Best Interest of Customers at Heart

Employees Understand Specific Needs of Customers

e. Responsiveness:

Informs exactly when Services will be provided

Gives Prompt Services

Employees are Always Willing to Help

Never too Busy to Respond Customer Requests

4.2.3. The Rating Scale

Customers‘ responses have been recorded by using 5 point Likert Scale or

Technique where the customer were asked to evaluate each statement to rate their

degree of agreements or disagreements with each of 22 statements. These degrees of

agreements or disagreements were plotted on the 5 point Likert Scale where point 1

indicates ―Strongly Disagree‖ and point 5 indicates ―Strongly Agree‖ with the

statement.

4.2.4. The Cut-Off Score

Some people told that half way point in a marathon is 22 miles. But, the fact is

marathon is a race of 26.2 miles. The point was that it requires as much energy to run

the last 4.2 miles as it does the first 22. The same principle holds in the marathon race

of customer satisfaction. The half way point is not a mean score of 50%. Improving

the mean score beyond 80% takes as much energy as it does to get to 80% and

incremental points of improvement are hard to achieve.

Some researchers prefer to concentrate on the ―top box‖ responses – those scores of

4 or 5 out of 5 – the excellent or very good ratings. It is argued that these are the

Figure 16: Example of a 5 Point Likert Rating Scale


scores that are required to create genuine satisfaction and loyalty. In their book ‗The

Service Profit Chain‘, Heskett, Sasser and Schlesinger argue that a rating of 9 or 10

out of 10 is required on most of the key issues that drive the buying decision. If

suppliers fail to achieve such high ratings, customers show indifference and will shop

elsewhere. Capricious consumers are at risk of being wooed by competitors, readily

switching suppliers in the search for higher standards. The concept of the zone of

loyalty, zone of indifference and zone of defection as suggested by the three Harvard

professors is illustrated below in diagram:

So, I am considering the 80% point 4 out of 5 as the cut off score in measuring

customer satisfaction. That is if the average score is 4.0 or more then the customers

will be treated as satisfied.

4.2.5. The Gap Score

Gap score is the difference between the ―Expectation‖ and ―Perception‖. It indicates

the reality gap from interviewer‘s (my) perception.

Expectation: This part deals with my opinion on the bank. Under this the

extent to which I think the bank should posses for the following features are

shown. What I am interested in here is a number that best shows my

expectations about the Shahjalal Islami Bank Ltd. (Keraniganj branch).

Perception: This indicates the respondents‘ response on the statements taken

under the SERVQUAL instrument.

Figure 17: Satisfaction Score & Loyalty, Indifference, Defection Zone


92%

8%

GenderMale

Female

10%

36%50%

4%

Age Group

18-25 Years 26-33 Years 34-50 Years 50+ Years

4.3. Findings & Analysis

50 customers were surveyed as sample (from the population size of almost two

thousand) under the study to measure the satisfaction level of the customers of

Shahjalal Islami Bank Limited (Keraniganj Branch). The demographic information of

samples is as follows:

Table 7: Sample‘s Frequency Distribution based on Gender

Sl. No. Gender Frequency Percentage Cumulative Percentage

1. Male 46 92% 92%

2. Female 04 8% 100%

n=50

Table 8: Sample‘s Frequency Distribution based on Age

Sl. No. Age Group Frequency Percentage Cumulative Percentage

1. 18-25 Years 5 10% 10%

2. 26-33 Years 18 36% 46%

3. 34-50 Years 25 50% 96%

4. 51 & Above 2 4% 100%

n=50

Figure 18: Gender Ratio among Samples

Figure 19: Samples‘ Age Clusters


74%

18%

2%

6%

Profession

Business

Service

Student

Housewife

Table 9: Sample‘s Frequency Distribution based on Profession

Sl. No. Age Group Frequency Percentage Cumulative Percentage

1. Business 37 74% 74%

2. Service 9 18% 92%

3. Student 1 2% 94%

4. Housewife 3 6% 100%

n=50

Here the gap among various clusters of the samples is wide. The reason behind this

was convenient selection of samples. The survey was conducted in between 18th of

October, 2009 to 3rd of November, 2009. So, the samples are selected only from those

customers who came to the bank within the stated time period.

Figure 20: Sample Ratio based on Profession


0 0

8

17

25

0

5

10

15

20

25

30

Strongly Disagree

Disagree Neutral Agree Strongly Agree

Statement 1: ―When SJIBL promises to do something by a certain time, it does so.‖

Explanation: The above statement denotes the degree of keeping promises by the

bank with a certain period of time.

Survey Result: The summary of the survey result of this statement is shown by the

following table.

Table 10: Survey result of the statement 1 (Act according to Promises)

Degree of Perception

Frequ-ency

Percentage of Frequency

Cumulative Percentage

Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.34 5 0.745

Disagree 0 0% 0%

Neutral 8 16% 16%

Agree 17 34% 50%

Strongly Agree

25 50% 100%

n=50

Interpretation of the Result: From the above result it is seen that the mean value is

4.34. That means customers are satisfied with the performance against the promises

made by SJIBL. The mode value (5) represents that most of the respondents are

strongly agree with the above statement. So, on this point of fulfilling promises

customers are seemed to be satisfied.

Result on Likert Scale:

Figure 21: Respondents' response on acting of employees according to promise


0 0

6

23 21

0

5

10

15

20

25

Strongly Disagree


Statement 2: ―When you have a problem, SJIBL shows a sincere interest in solving

it.‖

Explanation: The above statement refers to the degree of sincerity of the bank

concerning the interest in solving the problems of customers.


following table.

Table 11: Survey result of the statement 2 (Sincere Interest in Problem Solving)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.30 4 0.678

Disagree 0 0% 0%

Neutral 6 12% 12%

Agree 23 46% 58%

Strongly Agree

21 42% 100%

n=50


4.30. That means customers are satisfied with the banks sincerity in solving their

personal problem. The mode value (4) represents that most of the respondents are

agree with the above statement. So, on this point of bank’s sincerity in problem solving the



Figure 22: Respondents' response on employees‘ sincere interest in Problem Solving


0

3

7

17

23

0

5

10

15

20

25

Strongly Disagree


Statement 3: ―SJIBL performs the service right at the first time.‖

Explanation: The above statement means the degree of performing service correctly

by the bank at the first time it performs for an individual.


following table.

Table 12: Survey result of the statement 3 (Performs the Service Right the First Time)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.20 5 0.904

Disagree 3 6% 6%

Neutral 7 14% 20%

Agree 17 34% 54%

Strongly Agree

23 46% 100%

n=50


4.20. That means customers are satisfied and feel that the services performed by the

bank for them are right at the first time. The mode value (5) represents that most of

the respondents are strongly agree with the above statement. So, on this point of

performing service right at the first time customers are seemed to be satisfied.


Figure 23: Respondents' response on having service right at the first time


0 0

8

21 21

0

5

10

15

20

25

Strongly Disagree


Statement 4: ―SJIBL provides its service at the time it promises to do so.‖

Explanation: The above statement refers to the degree of delivering Just In Time

(JIT) service by the bank according to its promise.


following table.

Table 13: Survey result of the statement 4 (Provides Services at the Time Promised)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.26 4 0.723

Disagree 0 0% 0%

Neutral 8 16% 16%

Agree 21 42% 58%

Strongly Agree

21 42% 100%

n=50


4.26. That means customers are satisfied with provided services by the promised. The

mode value (4) represents that most of the respondents are agree with the above

statement. So, on this point of providing service by the promised time the customers are

seemed to be satisfied.


Figure 24: Respondents' response on having services by the promised time


0 0

5

21

24

0

5

10

15

20

25

30

Strongly Disagree


Statement 5: ―SJIBL insists on error free records.‖

Explanation: The above statement means the degree of maintaining and providing

error free records of transactions and other banking documents by the bank.


following table.

Table 14: Survey result of the statement 5 (Insists on Error Free Records)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.38 5 0.667

Disagree 0 0% 0%

Neutral 5 10% 10%

Agree 21 42% 52%

Strongly Agree

24 48% 100%

n=50


4.38. That means customers are satisfied with the error free record made and

provided by SJIBL. The mode value (5) represents that most of the respondents are

strongly agree with the above statement. So, on this point of fulfilling promises



Figure 25: Respondents' response on insistence of error free record


0 0

15

27

8

0

5

10

15

20

25

30

Strongly Disagree Disagree Neutral Agree Strongly Agree

Statement 6: ―The behavior of employees in SJIBL instills confidence in you.‖

Explanation: The above statement depicts the increase in the level of confidence of

the customers due to the behaviour of the employees of the bank.


following table.

Table 15: Survey result of the statement 6 (Employees Behavior Instills Confidence in

Customers)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

3.86 4 0.670

Disagree 0 0% 0%

Neutral 15 30% 30%

Agree 27 54% 84%

Strongly Agree

8 16% 100%

n=50


3.86 that means customers are not at proper satisfied level with the employees‘

behaviour in instilling confidence in them. The mode value (4) represents that most of

the respondents are agree with the above statement though the mean is indicating a

lower value. So, on this point of employees’ behaviour in installing confidence in customers the

clients are appeared to be laid on a less-satisfied zone which is below the acceptable

point.


Figure 26: Respondents' response on employees‘ behavior in instilling confidence in customers


0 0 1

21

28

0

5

10

15

20

25

30

Strongly Disagree


Statement 7: ―You feel safe in your transactions with SJIBL.‖

Explanation: The above statement means the degree of safety that the customer feels

by maintaining account and transacting with the bank.


following table.

Table 16: Survey result of the statement 7 (Customers Feel Safe in Transaction)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.54 5 0.542

Disagree 0 0% 0%

Neutral 1 2% 2%

Agree 21 42% 44%

Strongly Agree

28 56% 100%

n=50


4.54 that means customers are well satisfied through maintaining transactions with the

bank. The mode value (5) represents that most of the respondents are strongly agree

with the above statement though the mean is indicating a lower value. So, on this

point of customers feel safe in transactions with the bank the clients are appeared to be well

satisfied.


Figure 27: Respondents' response on feeling safe in transactions


0 0 1

2326

0

5

10

15

20

25

30

Strongly Disagree


Statement 8: ―Employees of SJIBL are consistently courteous with you.‖

Explanation: The above statement means the degree that the customers are satisfied

with the courteous behaviour of the employees.


following table.

Table 17: Survey result of the statement 8 (Consistent Courtesy of Employees)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.50 5 0.544

Disagree 0 0% 0%

Neutral 1 2% 2%

Agree 23 46% 48%

Strongly Agree

26 52% 100%

n=50


4.50 that means customers are well satisfied with good manner of the employees of

the bank. The mode value (5) represents that most of the respondents are strongly

agree with the above statement. So, on this point of consistent courtesy of employees of the

bank the clients are appeared to be well satisfied.


Figure 28: Respondents' response on consistent courtesy of employees


0 0

13

20

17

0

5

10

15

20

25

Strongly Disagree


Statement 9: ―Employees of SJIBL have the knowledge to answer your questions.‖

Explanation: The above statement means the degree of knowhow that the

employees of SJIBL possess to answer the customers query correctly.


following table.

Table 18: Survey result of the statement 9 (Employees have the Knowledge to

Answer Customers' Question)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.08 4 0.778

Disagree 0 0% 0%

Neutral 13 26% 26%

Agree 20 40% 66%

Strongly Agree

17 34% 100%

n=50


4.08 that means customers are satisfied with employees when they ask them

questions. The mode value (4) represents that most of the respondents are agree with

the above statement. So, on this point of employees’ knowledge to answer customers’ query the

clients are appeared to be satisfied.


Figure 29: Respondents' response based on employees knowledge


0 02

13

35

0

5

10

15

20

25

30

35

40

Strongly Disagree


Statement 10: ―SJIBL has modern looking equipment.‖

Explanation: The above statement means the degree that SJIBL‘s Keraniganj Branch

has modern looking equipments.


following table.

Table 19: Survey result of the statement 10 (Modern Looking Equipments)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.66 5 0.557

Disagree 0 0% 0%

Neutral 2 4% 4%

Agree 13 26% 30%

Strongly Agree

35 70% 100%

n=50


4.66 that means customers are well satisfied with the modern looking equipments of

the bank. The mode value (5) represents that most of the respondents are strongly

agree with the above statement. So, on this point of having modern looking equipments the

clients are appeared to be satisfied enough.


Figure 30: Respondents' response on modern looking equipment


0 0 0

14

36

0

5

10

15

20

25

30

35

40

Strongly Disagree


Statement 11: ―SJIBL‘s physical facilities are visually appealing.‖


has appealing physical facilities.


following table.

Table 20: Survey result of the statement 11 (Visually Appealing Physical Facilities)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.72 5 0.454

Disagree 0 0% 0%

Neutral 0 0% 0%

Agree 14 28% 28%

Strongly Agree

36 72% 100%

n=50


4.72 that means customers are well satisfied with the visually appealing physical facility

of the bank. The mode value (5) represents that most of the respondents are strongly

agree with the above statement. So, on this point of the clients are appeared to be

satisfied enough.


Figure 31: Respondents' response on visually appealing physical facility


0 0

3

15

32

0

5

10

15

20

25

30

35

Strongly Disagree


Statement 12: ―SJIBL‘s employees are neat appearing.‖


has employees who are neat in appearance.


following table.

Table 21: Survey result of the statement 12 (Neat Appearance of Employees)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.58 5 0.609

Disagree 0 0% 0%

Neutral 3 6% 6%

Agree 15 30% 36%

Strongly Agree

32 64% 100%

n=50


4.58 that means customers are well satisfied with the neat appearance of the

employees of the bank. The mode value (5) represents that most of the respondents

are strongly agree with the above statement. So, on this point of neat appearance of

employees the clients are appeared to be satisfied enough.


Figure 32: Respondents' response on neat appearance of employees


0 0

7

18

25

0

5

10

15

20

25

30

Strongly Disagree


Statement 13: ―Materials associated with the service (such as pamphlets or

statements) are visually appealing at SJIBL.‖


has employees who are neat appearing.


following table.

Table 22: Survey result of the statement 13 (Appealing Appearance of Materials)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.36 5 0.722

Disagree 0 0% 0%

Neutral 7 14% 14%

Agree 18 36% 50%

Strongly Agree

25 50% 100%

n=50


4.36 that means customers are well satisfied with the appealing appearance materials

that are associated with the service of the bank. The mode value (5) represents that

most of the respondents are strongly agree with the above statement. So, on this point

of appealing appearance of materials the clients are appeared to be satisfied enough.


Figure 33: Respondents' response on appealing appearance of materials


0 0

18

22

10

0

5

10

15

20

25

Strongly Disagree


Statement 14: ―SJIBL gives you individual attention.‖

Explanation: The above statement means the degree of attention that the employees

of SJIBL pay to their customers.


following table.

Table 23: Survey result of the statement 14 (Gives Customers Individual Attention)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

3.84 4 0.738

Disagree 0 0% 0%

Neutral 18 36% 36%

Agree 22 44% 80%

Strongly Agree

10 20% 100%

n=50


3.84 that means customers are not satisfied enough with the individual attention that

they got from the employees of SJIBL. The mode value (4) represents that most of

the respondents are agree with the above statement. So, on this point of getting

individual attention the clients are not properly satisfied.


Figure 34: Respondents' response on getting individual attention


1 2

7

23

17

0

5

10

15

20

25

Strongly Disagree


Statement 15: ―SJIBL has operating hours convenient to all its customers.‖

Explanation: The above statement means the degree how the working hour of the

bank suits the customers.


following table.

Table 24: Survey result of the statement 15 (Has Convenient Operating Hours for

Customers)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

1 2% 2%

4.06 4 0.913

Disagree 2 4% 6%

Neutral 7 14% 20%

Agree 23 46% 66%

Strongly Agree

17 34% 100%

n=50


4.06 that means customers have touched the satisfaction level regarding the banking

hour. But this is not too high. The mode value (4) represents that most of the

respondents are agree with the above statement or they are satisfied with banking

hours. So, on this point the clients are appeared to be satisfied.


Figure 35: Respondents' response on operating hour of the bank


1 2

19

17

11

02468

101214161820

Strongly Disagree


Statement 16: ―SJIBL has employees who give you personal attention.‖

Explanation: The above statement means the degree of having SJIBL employees

who personally pay attention to their clients.


following table.

Table 25: Survey result of the statement 16 (Has Employees to Give Customers

Personal Attention)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

1 2% 2%

3.70 3 0.931

Disagree 2 4% 6%

Neutral 19 38% 44%

Agree 17 34% 78%

Strongly Agree

11 22% 100%

n=50


3.70 that means customers do not touch the satisfaction level regarding the banking

hour. But this is not too high. The mode value (3) represents that most of the

respondents are in a neutral position; they neither agree nor disagree with the

statement.


Figure 36: Respondents' response on having personal attention providing employees


0 0

3

19

28

0

5

10

15

20

25

30

Strongly Disagree


Statement 17: ―SJIBL has your best interest at heart.‖

Explanation: he above statement means the degree of conviction of the clients that

SJIBL employees thinks about the best interest of the customers.


following table.

Table 26: Survey result of the statement 17 (Has Best Interest of Customers at Heart)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.50 5 0.614

Disagree 0 0% 0%

Neutral 3 6% 6%

Agree 19 38% 44%

Strongly Agree

28 56% 100%

n=50


4.50 that means customers are well satisfied believing that SJIBL employees think for

the best interest of the customers by their heart. The mode value (5) represents that

most of the respondents are strongly agree with the above statement.


Figure 37: Respondents' response on having best interest of customers to employees‘ heart


0

5

1922

4

0

5

10

15

20

25

Strongly Disagree


Statement 18: ―The employees of SJIBL understand your specific needs.‖

Explanation: The above statement means the degree of understanding the varying

needs for each customer by the SJIBL employees.


following table.

Table 27: Survey result of the statement 18 (Employees Understand Specific Needs

of Customers)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

3.50 4 0.789

Disagree 5 10% 10%

Neutral 19 38% 48%

Agree 22 44% 92%

Strongly Agree

4 8% 100%

n=50


3.50 that means customers are not satisfied enough with the bank‘s employees‘

understanding of the specific needs of the individual clients. Though the mode value

(4) represents that most of the respondents are agree with the above statement, the

average is below the mode value.


Figure 38: Respondents' response on understanding of specific needs of them by the employees


24

21

18

5

0

5

10

15

20

25


Statement 19: ―Employees in SJIBL tell you exactly when services will be

performed.‖

Explanation: T he above statement means the degree of information provided by the

SJIBL employees to the clients about the time accuracy specifically when the service

will be provided to them.


following table.

Table 28: Survey result of the statement 19 (Informs exactly when Services will be

provided)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

2 4% 4%

3.40 3 0.926

Disagree 4 8% 12%

Neutral 21 42% 54%

Agree 18 36% 90%

Strongly Agree

5 10% 100%

n=50


3.40 that means customers are not satisfied enough with the bank‘s employees‘

provided information about the exact time when service will be provided. It does not

touch the satisfactory level. The mode value (3) represents that most of the

respondents are in a neutral position with the above statement.


Figure 39: Respondents' response on getting information of exactly when service will be given


2

6

23

15

4

0

5

10

15

20

25


Statement 20: ―Employees in SJIBL give you prompt service.‖

Explanation: The above statement means the degree of immediate service given by

the employees of SJIBL.


following table.

Table 29: Survey result of the statement 20 (Gives Prompt Services)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

2 4% 4%

3.26 3 0.922

Disagree 6 12% 16%

Neutral 23 46% 62%

Agree 15 30% 92%

Strongly Agree

4 8% 100%

n=50


3.26 that means customers do not think that the service offered or provided by the

employees are instant. The mode value (3) represents that most of the respondents are

in a neutral position with the above statement which does not reach to a satisfactory

level.


Figure 40: Respondents' response on getting prompt service


0 02

20

28

0

5

10

15

20

25

30


Statement 21: ―Employees in SJIBL are always willing to help you.‖

Explanation: The above statement means the degree of willingness of the employees

of SJIBL to help the customers.


following table.

Table 30: Survey result of the statement 21 (Employees are Always Willing to Help)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

0 0% 0%

4.52 5 0.580

Disagree 0 0% 0%

Neutral 2 4% 4%

Agree 20 40% 44%

Strongly Agree

28 56% 100%

n=50


4.52 that means the customers are much satisfied with the willingness of the SJIBL

employees to help them. The mode value (5) indicates that most of the respondents

are strongly agree with the above statement and are very much satisfied with the

willingness of the employees to help them.


Figure 41: Respondents' response on employees‘ willingness to help


25

20 21

2

0

5

10

15

20

25


Statement 22: ―Employees in SJIBL are never too busy to respond to your request.‖

Explanation: The above statement refers to the level of employee business with tasks

while responding to customer request.


following table.

Table 31: Survey result of the statement 22 (Never too Busy to Respond Customer

Requests)


Frequ-ency



Mean Mode Std. Dev.

Strongly Disagree

2 4% 4%

3.32 4 0.868

Disagree 5 10% 14%

Neutral 20 40% 54%

Agree 21 42% 96%

Strongly Agree

2 4% 100%

n=50


3.32 that indicates that customers neither think that employees are too busy to

respond nor too free to respond. The mode value (4) represents that most of the

respondents are agreed with the above statement that is employees are never too busy

to respond them.


Figure 42: Respondents' response on business of employees while to respond customers


4.3.1. Calculation of Average SERVQUAL Scores for Each of 5 (five)

SERVQUAL Dimensions

Table 32: Average Reliability SERVQUAL score

Factors under Reliability Dimension

Expectation Customers’ Perception (Average)

Gap Score= Expectation-Perception (Average)

Average Reliability SERVQUAL score

Act according to Promises

5 4.34 0.66

4.296

Sincere Interest in Problem Solving

5 4.30 0.70

Performs the Service Right the First Time

5 4.20 0.80

Provides Services at the Time Promised

4 4.26 -0.26

Insists on Error Free Records

4 4.38 -0.38

Average Reliability Gap Score 0.304

Table 33: Average Assurance SERVQUAL score

Factors under Assurance Dimension



Average Assurance

SERVQUAL score

Employees Behavior Instills Confidence in Customers

4 3.86 0.14

4.245

Customers Feel Safe in Transaction

5 4.54 0.46

Consistent Courtesy of Employees

5 4.50 0.50

Employees have the Knowledge to Answer Customers' Question

5 4.08 0.92

Average Assurance Gap Score 0.505


Table 34: Average Tangibles SERVQUAL score

Factors under Tangibles Dimension



Average Tangibles

SERVQUAL score

Modern Looking Equipments

5 4.66 0.34

4.58

Visually Appealing Physical Facilities

5 4.72 0.28

Neat Appearance of Employees

5 4.58 0.42

Appealing Appearance of Materials

5 4.36 0.64

Average Tangibles Gap Score 0.42

Table 35: Average Empathy SERVQUAL score

Factors under Empathy

Dimension Expectation

Customers’ Perception (Average)


Average Empathy

SERVQUAL score

Gives Customers Individual Attention

5 3.84 1.16

3.92

Has Convenient Operating Hours for Customers

5 4.06 0.94

Has Employees to Give Customers Personal Attention

4 3.70 0.30

Has Best Interest of Customers at Heart

5 4.50 0.50

Employees Understand Specific Needs of Customers

4 3.50 0.50

Average Empathy Gap Score 0.68


Table 36: Average Responsiveness SERVQUAL score

Factors under Responsiveness

Dimension Expectation

Customers’ Perception (Average)


Average Responsiveness

SERVQUAL score

Informs exactly when Services will be provided

4 3.40 0.60

3.625

Gives Prompt Services

4 3.26 0.74

Employees are Always Willing to Help

5 4.52 0.48

Never too Busy to Respond Customer Requests

4 3.32 0.68

Average Responsiveness Gap Score 0.625

4.3.2. Calculation of Unweighted SERVQUAL Score

Table 37: Calculations to obtain unweighted SERVQUAL Score

SERVQUAL Parameters Average Score Average Unweighted SERVQUAL Score

Reliability 4.296

4.1332

Assurance 4.245

Tangibles 4.58

Empathy 3.92

Responsiveness 3.625

4.3.3. Calculation of Weighted SERVQUAL Score/ Customer Satisfaction

Index (CSI)

Table 38: Calculations to obtain Customer Satisfaction Index (CSI)

SERVQUAL Parameters

Weighting Average

Score Weighting (avg. of 1)

Weighting (avg. of 1) *

Average Score

Reliability 4 4.296 1.08401084 4.656910569

Assurance 3.5 4.245 0.948509485 4.026422764

Tangibles 3 4.58 0.81300813 3.723577236

Empathy 3.7 3.92 1.002710027 3.930623306

Responsiveness 4.25 3.625 1.151761518 4.175135501

Average =3.69

Average =4.1332

Average=1 CSI=4.102533875

Chapter 5: Conclusion Page | 70

Chapter 5: Conclusion

5.1. Ending Summary

5.1.1. Quantitative Findings The quantitative findings that are found by analyzing the customers‘ response through

SERVQUAL instrument are as follows:

a. Ability of employees to perform promised service dependently &

accurately: According to customers‘ response, performance of all the

dimensions listed under ―Reliability‖ head (acting according to promises,

sincerity in problem solving, performing the service right at the first time,

providing service at the promised time & insistence on error free record) are

quite satisfactory and the overall SERVQUAL score in this area is 4.296 (Table

32). So, the employees are able to perform promised services dependently and

accurately.

b. Assurance of competency, courtesy, credibility & security: From

customers‘ point of view, employees‘ behaviour does not instil enough

confidence in customers. All other dimensions listed under ―Assurance‖ head

(safe felling in transactions, consistent good courtesy of employees & having

decent knowledge of employees in answering customers queries) are quite

satisfactory. Though one dimension is not satisfactory but the satisfactory

position of all other dimensions under ―Assurance‖ head leads this to a

satisfactory position and the overall SERVQUAL score is 4.245 (Table 33). So,

on average the customers are assured enough by competence, courtesy,

credibility and security of the employees and the bank.

c. Tangible appearances in satisfying customers: Customers of the bank are

well satisfied with all types of tangible appearances (equipments, materials,

physical facilities & employees) inside the bank. Average ―Tangibles‖

SERVQUAL score of 4.58 (Table 34) backs up the above statement.

d. Performance in personal care, understanding customers & offered

banking hour: The survey result proved that the bank is offering its customers

convenient banking hours and the employees have the best interest of customers

in their heart. Beside these two satisfactory points there are some unsatisfactory

items also. On average customers think that they are not getting proper

individual attention, there is lacking of employees who will give them personal

attention and employees do not understand their personal needs. These

disappointing factors are forming average ―Empathy‖ score to 3.92 (Table 35).

e. Response & willingness of employees in providing service: The study

shows that the employees are always willing to help customers but there are


lacking in providing prompt services, informing exactly when service will be

actually provided and responding customers when the employees have works in

hand. These negative points are shaping the average ―Responsiveness‖

SERVQUAL score to 3.625 (Table 36) and indicating an overall dissatisfactory

standing in this area.

f. Overall level of customer satisfaction: The overall unweighted SERVQUAL

score is 4.133 (Table 37) which is indicating a satisfactory stage in the level of

customer satisfaction. The weighted SERVQUAL score or the Customer

Satisfaction Index (CSI) is 4.103 (Table 38). This figure also is indicating an

acceptable level of customer satisfaction.

So, from the quantitative analysis it is found that although in some dimensions

customers are not properly satisfied, the overall result is pointing to a satisfactory level

of customers‘ satisfaction at Shahjalal Islami Bank Limited, Keraniganj Branch.

There are some points where it needs to improve performance to increase the level of

customer satisfaction. These are- providing customers individual attention,

understanding special needs of customers, providing information exactly when service

will be provided, providing quick service, response timely to customers, etc.

5.1.2. Qualitative Findings The key informants believe that the customers can be made more satisfied by

providing them quick service. They also think that most of the customers deal with

lower level officers of General Banking & SME department. Customers of the bank

are increasing day by day. It will not be possible to serve customers then as they serve

today. To make provide them prompt service without creating any queue more

employees are needed under General Banking department. This will help them to

carry on every day time consuming works like voucher sorting properly and thus there

will be no pending works.

They also believe that a better core banking software (a replacement of PCBank

2000) will help them to deal with their works more accurately. These will save their

valuable time and thus they will be able to offer this extra saved time to the customers

to meet their wants timely.


5.2. Recommendations

It is very difficult for me to recommend with a practical experience of just almost 3

months. On the basis of interviews, study and observation I would like to recommend

the following points:

a. Maintenance of Time Slots for Each Customer to Serve: While employees

deal with customers they can maintain standard time or time slots for each

customer they handle and for each work they do. This consciousness will help to

perform works quickly and to serve more customers.

b. Setup Electronic Calling Machine for Cash Counter: Most of the time there

is a rush in the cash counter. To manage proper queue and to manage this rush

properly setting up of Electronic Calling Machine can be effective.

c. Setting up of Query Desk/ Information Booth/ Reception Booth: A

conventional query desk or reception booth or information booth can serve

customers who make a phone or come at banks for simple query and this can

reduce customers‘ rush to the officers table.

d. Appointment of more Employees under General Banking Department:

More appointed employees can simplify the works of general banking and can

serve the customers well. This will also help to ensure no work pending and no

customer unserved. Appointment of more employees under this department will

also reduce the workload of existing employees and will help to improve their

morale.

e. Appoint more students under internship program: Students appointed

under internship program can help in many day to day simple works like account

opening, voucher sorting, mail management, providing information to

customers, etc. It is also advantageous because it costs a little no comparing to

full time appointed employees.

f. Replacement of Core Banking Software: PCBank 2000, the core banking

software should be replaced. Because, there are softwares which are faster,

stronger, more secure and more user friendly. Better up-to-date software will

help employees to deal with customers and their works quickly and effectively.

g. Employee Training Workshops: Employees should be trained by arranging

workshops time to time. Because this can release them from monotony, increase

their knowledge and morale.

h. Appointing Female Employees: To understand the female customers‘ specific

needs woman employees can be effective and a separate desk for women can

improve the Islamic image of the bank and will secure the motto committed to

cordial service.


Developing a customer satisfaction programme is not just about carrying out a survey.

Surveys provide the reading that shows where attention is required but in many

respects, this is the easy part. Very often, major long lasting improvements need a

fundamental transformation in the organization, probably involving training of the

staff, possibly involving cultural change. The result should be financially beneficial

with less customer churn, higher market shares, premium prices, stronger brands and

reputation, and happier staff. However, there is a price to pay for these

improvements. Costs will be incurred in the research surveys are made. Time will be

spent working out an action plan and in implementation of development process.

Training may well be required to improve the customer service. The implications of

customer satisfaction surveys go far beyond the survey itself and will only be

successful if fully supported by the echelons of senior management.

Appended Part Page | 74

Works Cited

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Annual Report 2008

Brochures

Credit Report: Report: RR/253/09

Statement of Affairs, Dated: 12/11/2009

Training Sheets

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Customer Perceptions and Expectations. Free Press.

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_ surveys.pdf

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factor

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Appendix

Appendix A: Operating Branches of SJIBL

1. Dhaka Main Branch, Dhaka

2. Mitford Branch, Dhaka

3. Dhanmondi Branch, Dhaka

4. Khatunganj Branch, Chittagong

5. Agrabad Branch, Chittagong

6. Gulshan Branch, Dhaka

7. Beani Bazar Branch, Sylhet

8. Sylhet Branch, Sylhet

9. Foreign Exchange Branch,

Dhaka

10. Joydevpur Chowrasta Branch,

Gajipur

11. Kawran Bazar Branch, Dhaka

12. Dargagate Branch, Sylhet

13. Uttara Branch, Dhaka

14. Bangshal Branch, Dhaka

15. Baipail (Dhaka EPZ) Branch,

Dhaka

16. Narayanganj Branch,

Narayanganj

17. Satmasjid Road Branch, Dhaka

18. Banani Branch, Dhaka

19. Moulvi Bazar Branch,

Moulvibazar

20. Joypara Branch, Dhaka

21. Jubilee Road Branch, Chittagong

22. Motijheel Branch, Dhaka

23. Mirpur Branch, Dhaka

24. Khulna Branch, Khulna

25. Saver Branch, Dhaka

26. Muradpur Branch, Chittagong

27. Bijoynagar Branch, Dhaka

28. Saidpur Branch, Nilphamari

29. Vatara Branch, Dhaka

30. Keraniganj Branch, Dhaka

31. Jassore Branch, Jessore

32. Rajshahi Branch, Rajshahi

33. Mymensing Branch, Mymensing

34. Panthapath Branch, Dhaka

35. College Gate Branch, Dhaka

36. Baruakhali Branch, Nowabgonj

37. Madhobdi Branch, Narsinghdi

38. Ashkona Branch, Dhaka

39. Bogra Branch, Bogra

40. Naogaon Branch, Naogaon

41. Goalabazar Branch, Sylhet

42. Comilla Branch, Comilla

43. Khepupara Branch, Patuakhali

Appendix B: Branches going to open in rest of the 2009

1. Borishal Branch, Borishal

2. Chawkbazar Branch, Chittagong

3. Kaliganj Branch, Jhinaidaha

4. Najirhat Branch, Chittagong

5. Ramganj Branch, Laxmipur

6. Sokhipur Branch, Tangail


Appendix C: SJIBL VISA Card Usage Limit

Table 39: Debit Card Usage Limit

Description Transaction Limit

Cash withdrawal limit (total) 4 times per day

Cash withdrawal limit (amount) Tk. 30,000 per day (up to Tk. 50,000 per day on request)

Balance checking 4 times per day

PIN change 2 times per day

Invalid PIN retry count 3 times per day

Card usage limit in ATMs (total) 10 times per day

Appendix D: SJIBL SWIFT Codes

Table 40: SWIFT Codes

Sl. No. BIC Code Branch Name City Heading

01 SJBLBDD1JUB Jubilee Road Chittagong

02 SJBLBDD1KWR Kawran Bazar Branch Dhaka

03 SJBLBDD1NGJ Narayanganj Branch Dhaka

04 SJBLBDD1OBU Offshore Banking Unit Dhaka

05 SJBLBDDHAGB Agrabad Branch Chittagong

06 SJBLBDDHBNG Bangshal Branch Dhaka

07 SJBLBDDHDHN Dhanmondi Branch Dhaka

08 SJBLBDDHDMB Dhaka Main Branch Dhaka

09 SJBLBDDHFEX Foreign Exchange Branch Dhaka

10 SJBLBDDHGUL Gulshan Branch Dhaka

11 SJBLBDDHKTG Khatunganj Branch Chittagong

12 SJBLBDDHMFB Mitford Branch Dhaka

13 SJBLBDDHSYL Sylhet Branch Sylhet

14 SJBLBDDHUTR Uttara Branch Dhaka

15 SJBLBDDHXXX Head Office Dhaka


Appendix E: Models used in Measurement of Customer Satisfaction

a. The KANO Model: The customer satisfaction model developed by N. Kano is a

quality management and marketing technique that can be used for measuring client

happiness. Kano's model of customer satisfaction distinguishes six categories of

quality attributes (Basic Factors, Excitement Factors, Performance Factors,

Indifferent attributes, Questionable attributes & Reverse attributes) are considered of

which the first three actually influence customer satisfaction. KENO used

questionnaire to measure this quality attributes.

b. The Service Profit-Chain Model: The service profit chain model of business

performance (Heskett, Sasser, & Schlesinger, 1997) has identified customer

satisfaction as a critical intervening variable in this relationship. Stated simply, the

service profit chain asserts that satisfied and motivated employees produce satisfied

customers and satisfied customers tend to purchase more, increasing the revenue and

profits of the organization.

Heskett et al. (1997), for example, define the service profit chain as 'involving

direct and strong relationships between profit; growth; customer loyalty;

customer satisfaction; the value of goods and services delivered to customers;

and employee capability, satisfaction, loyalty and productivity.'

c. The Service Expectation Model: According to this model customer satisfaction

with a service/product (p/s) can be measured through a survey of the actual

perception of the users or otherwise comparing their actual perception with their

expectations. More appropriately in the first case "quality" is considered, in the second

"customer satisfaction" (Cronin et al.1992, 1994).

d. Variability in the Service Process Model (Wharton): Four factors represent

major explanations for the existence of process variation in services: heterogeneous

customers with different service expectations; lack of rigorous policies and processes;

high employee turnover; and nature of customization.

e. The Common Measurements Tool (CMT): CMT is the result of an extensive

study by researchers at the Canadian Centre for Management Development and

others, which examined a number of approaches to standardizing measurement of

customer satisfaction with public services. The model they have developed provides a

useful example of how elements of different approaches can be combined to improve

our understanding of satisfaction and highlight priorities for improvement. It

incorporates five main questioning approaches, measuring:

i. Expectations of a number of service factors;

ii. Perceptions of the service experience on these factors;

iii. Level of importance attached to each of a number of service elements;


iv. Level of satisfaction with these elements;

v. Respondents' own priorities for improvement.

f. The Customer Satisfaction Index (CSI): The Customer Satisfaction Index

represents the overall satisfaction level of that customer as one number, usually as a

percentage. Plotting this Satisfaction Index of the customer against a time scale shows

exactly how well the supplier is accomplishing the task of customer satisfaction over a

period of time.

Since the survey feedback comes from many respondents in one organization, the bias

due to individual perception needs to be accounted for. This can be achieved by

calculating the Satisfaction Index using an importance weighting based on an average

of 1.

Calculate the average of all the weightings given by the customer. Divide the

individual weightings by this average to arrive at the weighting on the basis of average

of 1. Customer's higher priorities are weighted more than 1 and lower priorities less

than 1. The averages of the Customers Importance Scores are calculated and each

individual score is expressed as a factor of that average. Thus Customer Satisfaction

can be expressed as a single number that tells the supplier where he stands today and

an Improvement plan can be chalked out to further improve his performance so as to

get a loyal customer.

Appendix F: Survey Form (Questionnaire)

See at next page.


Survey Form

Please show the extent to which you believe SJIBL has the feature described in the

statement. Write number that best shows your perceptions.

[Strongly Disagree] [Strongly Agree]

1 2 3 4 5

1. When SJIBL promises to do

something by a certain time, it

does so. [ ]

2. When you have a problem,

SJIBL shows a sincere interest in

solving it. [ ]

3. SJIBL performs the service right

at the first time. [ ]

4. SJIBL provides its service at the

time it promises to do so. [ ]

5. SJIBL insists on error free

records. [ ]

6. The behavior of employees

in SJIBL instills confidence

in you. [ ]

7. You feel safe in your

transactions with SJIBL. [ ]

8. Employees of SJIBL are

consistently courteous with

you. [ ]

9. Employees of SJIBL have the

knowledge to answer your

questions. [ ]

10. SJIBL has modern looking

equipment. [ ]

11. SJIBL‘s physical facilities are

visually appealing. [ ]

12. SJIBL‘s employees are neat

appearing. [ ]

13. Materials associated with the

service (such as pamphlets or

statements) are visually

appealing at SJIBL. [ ]

14. SJIBL gives you individual

attention. [ ]

15. SJIBL has operating hours

convenient to all its

customers. [ ]

16. SJIBL has employees who give

you personal attention. [ ]

17. SJIBL has your best interest at

heart. [ ]

18. The employees of SJIBL

understand your specific

needs. [ ]

19. Employees in SJIBL tell you

exactly when services will be

performed. [ ]

20. Employees in SJIBL give you

prompt service. [ ]

21. Employees in SJIBL are always

willing to help you. [ ]

22. Employees in SJIBL are never

too busy to respond to your

request. [ ]

Age Group: [18-25] [26-33] [34-50] [51 & above] Gender: [Male] [Female]

Profession: [Business] [Service] [Student] [Housewife] Date:

62738514 Shahjalal Islami Bank Internee Report

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