analysis of overall activities of the collection in centre of standard chartered bank

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Internship ReportOn

Analysis of Overall ActivitiesOf

The Collection Centre of Standard Chartered Bank

Prepared For:

Professor Dr. …………………Dean, School of BusinessAsian University of Bangladesh

Supervisor

Farzana Islam

Assistant Professor Department of Finance

School of BusinessAsian University of Bangladesh

………………………………….

Signature of Supervisor

Prepared By

A.S.M. Ahsanul Haque

MBA 19thMajor in HRM

ID No. 0000000000000

Dhaka, 05 June 2009

www.AssignmentPoint.com



At the very beginning, I would like to express my deepest gratitude to the Almighty Allah for

giving me the ability and strength to finish the internship report successfully within the

scheduled time.

I would like to express my hearties gratitude, deepest sense of aspiration and indebtedness to

my faculty supervisor, Mrs. Farzana Islam, Assistant Professor, Department of HRM, School

of Business, Asian University of Bangladesh, for her constant and valuable guidance, active

encouragement, co-operation, valuable criticism and encouragement and advice throughout

the preparation of this report.

My heartfelt gratitude goes to Mr. Javed Iqbal Chowdhury, Head of Collection, Standard

Chartered Bank. I am indebted to him for his willful and heartiest co-operation, inspiration

and suggestions to complete the internship in the SCB Collection Centre. My endless thanks

go to Mr. Zia Hasan Chowdhury, Senior Manager-SME and Secured Loans, Mr. Mohammad

Monirul Hasan, Manager Collections-Credit Card and Personal Loan, Mr. Iftekhar Salim,

Officer-Credit Card and Personal Loan, Mr. Amit Premtilok Roy Choudhury, Officer-Legal

and Recovery, Mrs. Taslima Subhani, Team Leader-Personal Loan and Mr. A K M Shahnur,

Team Leader-SME and Secured Loans, who enriched my knowledge on the collection and

recovery activities and procedures.

Finally, I would like to record a deep sense of aspirations to all the Managers, Officers, Team

Leaders and Customer Service Assistances at the Collection Centre for supporting me and

providing me pleasurable working experiences. I apologize to those whom I have not

mentioned in the acknowledgement However, I remain grateful to them.




SCB – Standard Chartered Bank

DPD – Day Passed Due

CAO – Customer Assistance Officers

CSA – Customer Service Advisor

IPI – Integrity Priority Index

PTP – Promise to Pay

PDC – Post Dated Cheque

BP – Banking Products

CP – Consumer Products

PL – Personal Loan

FL – Flexi Loan

BIL – Business Installment Loan

AL – Auto Loan

MIS – Management Information System

HR – Human Resource

KPI – Key Performance Indicators

CC – Credit Card

FID – First Installment Due

IS – Information System

SAFE – Security Awareness For Employees

IST – Information Security Team

HIS – Head of Information Security

GIS – Group Information security

DBMS – Data Base management System

DRP – Debt Relief Program

CWX – Collection Work Exchequer

UDC – Undated Cheque

05 June 2009




Professor Dr. …………………

Dean, School of Business

Asian University of Bangladesh

Dhaka

Subject: Submission of internship report on “Analysis of Overall Activities of the Collection

Centre of Standard Chartered Bank”

Dear Madam,

I am pleased to be able to submit this internship report on the topic “Analysis of Overall

Activities of the Collection Centre Of Standard Chartered Bank” for partial fulfillment of the

requirements of the MBA degree.

The 3 months internship program in the Collection Centre of Standard Chartered Bank was a

wonderful opportunity for me to acquaint closer with the organization. This paper attempts to

discover my observations, learning and experiences gained on the collection and recovery

activities as well collection policy and strategies of the Collection Centre. Writing this project

paper plan has been an extremely challenging and interesting experience for me.

I have tried my best to prepare and represent an overall view of the SCB Collection Centre in

consistence with the optimal standard under your valuable direction. I shall be very glad to

furnish any explanations on this report if necessary.

Sincerely yours,

……………………

A.S.M. Ahsanul Haque

MBA 19th

Major in HRM

ID No. 0000000000000




Banking business during the recent time period has witnessed a sharp change in its character and

composition due to number of reformative measures and growing demand for a variety of customer services. An addition to these changes is introducing Collection Centre with employees who onlyconcentrate on the collection and recovery activities and thus separating the collection activities formthe other banking activities.

This report is prepared based on data of the Collection Centre of Standard Chartered Bank (SCB). In preparing the present report, the practical experience of doing internship in the Collection Centre of SCB was taken into account. The time period of the internship program was three months. During that

period, both primary and secondary data on collection and recovery, performance, management policy, collection process, etc. were gathered and analyzed for the purpose of the present study.

Standard Chartered Bank, the leading multinational private bank, is well-established in growthmarkets and aims to be the right partner for its customers. It combines deep local knowledge withglobal capability and employs about 50,000 people in over 500 locations in more than 50 countries inthe Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the Americas.It is one of the world's most international banks with a management team comprising 70 nationalities.SCB started its operation in Bangladesh at Chittagong in 1947 and since that the bank is treated as thetop class multinational bank for Bangladesh. Recently, the bank has created a remarkable example byestablishing its Collection Division which deals with delinquent customers and collect monthlyinstallment amount from them. The Centre is responsible to control delinquency ratio.

The Collection Centre deals with three accounts – delinquent account, over limit account and FID

account. The Centre is led by Head of Collection with 4 managers and 9 teams. The Members dealwith credit cards and banking products. Banking products include personal loan, flexi loan, auto loan,

business installment loan and mortgage. Collection of credit card is arranged by 4 teams of different buckets and that of banking products is arranged by 3 teams. Two team deals with recovery and legalactivities. Each of these teams is led by one Team Leader.

The cost budget for the centre is prepared separately. A clear distinction is made between controllablecosts and allocated costs. Controllable costs are the responsibility of Collections Head.

To provide a fair performance tracking mechanism and a basis for incentive plans or performance- based remuneration schemes, balance score card is prepared by the Team Leaders. A formal call

monitoring process is in action to upgrade Collectors’ skills in performing their main function of making calls to the clients to remind them of their dues and influence them to make payment. Other incentive programs are also arranged by the Centre to motivate its members to raise their performancelevels to a higher standard. Its ESAU model motivates them to perform better and keep hold of thegood resources. Money collection has 90% weight in performance calculation. The Collectors of higher bucket and the Team Leaders are also responsible for visiting the customers to inform them thecondition of accounts and the benefits of payments. Different types of trainings are also arranged for the members.

In the Collection Centre, the Collectors mainly perform two jobs in the collection process, one is tele-call to delinquent customers and another one is letter sent to delinquent customers. Generally, the calls

are frequently made in the collection process. When the accounts seem to be difficult and risky, lettersare sent. Minimum mandated collection strategies include pre-delinquency strategies, over limit




strategy, dunning letter, settlement policy, debt relief policy, recovery strategy, agency strategy andlegal strategy. For secured products, debt relief strategy and repossession strategy are applied.

The trend of the Collection of the bank is positive and during 2002 to 2006 it increased an averagerate of $87.9 million per year. The growth rate and acceleration rate of collection is 11.68% and8.09% respectively. The results indicate that the collection in the years to come will grow with anincreasing rate. During the said period, average amount and standard deviation of collection were$747 million and $149.98 million respectively. This is indicative of the phenomenon that there weremarked variations in the collection amount from one year to another.

The total collection cost of SCB in Bangladesh is influenced by various internal and external factors.The study found that if the cost of collection from unsecured products increases by BDT 1 thousand,total cost of collection decreases by BDT 0.864 thousand, if the cost of collection from secured

products increases by BDT 1 thousand, total cost of collection increases by BDT 6.795 thousand andif the number of Collectors increases by 1 thousand, total cost of collection declines by BDT 1.086thousand considering in all the cases, other variables remain unchanged. The correlation coefficient is0.99 indicating high degree of relationship. The three variables combinedly explain 98% of the

variations in the total cost and the number of Collectors exerts more influence on the cost of collection.

Performance ratios calculated for banking products based on the month January, February and March,2007 fluctuated for the short time frame. Sill an alarming tendency is identified among the Collectorsof higher buckets as they are succeeded in regularizing accounts, but the deviation from the targetedamount is still high, whereas the Collectors of X DPD show better performance irrespective of

banking products.

The recovery of the Collection Centre is positively related to commission cost. The correlationcoefficient between the variables is 0.99 and the factor explains 98% of the variations in the amountof recovery. The multiple regression analysis is significant at 1% level.

During the period under review, the recovery pool form credit cards increased by BDT 13,793,377 per year. Base on the management’s expectation of recovery in 2007 form credit card (15%) and

predicted payment from the non-paying account will stand at BDT 3,370,484.43 assuming the number of non paying account, proportion of payment from non paying account and average payment of 2006will be reflected in 2007. Projected recovery for banking products includes 36% BIL, 13% Auto, 18%PL and 33% Flexi loan.

The benefit-cost and NPV analyses of the regular recovery project, legal team project and agency project are acceptable with ratios 9.4, 6 and 12.73 respectively and positive NPVs. The capacity plandeveloped for the month March, 2007 reveals requirements of 2 additional Collectors for the personal

loan team.

The study found that establishment of Collection Centre of SCB could enhance its operationalefficiency in collection and recovery and maintain customers’ goodwill. The activities of theCollection Centre have positive influence on bank’s overall profitability and reducing the amount of

provision. In comparison to the benefit of collection, the project of separating the Centre is still being proved as a cost effective and profitable intervention.




Table of Contents

Chapter 1: Background Information and Methodology 1-3

1.1 Introduction 011.2 Objectives of the study 011.3 Methodology 021.4 Limitations of the study 03

Chapter 2: Collection Center of Standard Chartered Bank: An overview 4-22

2.1 Significance of Collection Center: Theoretical Aspects 042.2 Collection Center: The Case of Standard Chartered Bank 06

2.2.1 Background of Standard Chartered Bank 062.2.2 Collection Center of Standard Chartered Bank 08

2.3 Management Hierarchy 102.4 Management Policy 12

2.4.1 Cost and Cheque Management 122.4.2 Debit Processing and Bucket Calculation 132.4.3 Collector Performance Management 142.4.4 Agency and Legal Unit Management 19

2.5 Consumer products of the Collection Center 20

Chapter 3: Collection Process and Strategies of the SCB 23-40

3.1 Collection Negotiation Techniques 233.1.1 Solution Selling and Managing Resistance 24

3.2 Collection Strategies 253.2.1 Minimum Mandated Strategies 263.2.2 Collection Strategies for Secured Products 293.2.3 Interest of Classified Loan 30

3.3 Collection Steps for Consumer Products 303.4 Agency File Handover Process 313.5 Recovery Strategy 32

3.6 Management Information System 343.7 Architecture and Infrastructure 353.8 SWOT Analysis 40

Chapter 4: Performance Analysis of Collection and Recovery of SCB 41-69

4.1 Trend Analysis of Collection 414.2 Growth and Acceleration Analysis 424.3 Analysis of the Determinants of Collection Cost 434.4 Cross Sectional Analysis 454.5 Regression Analysis: Recovery and Commission Cost 63




4.6 Recovery Trend Analysis 654.7 NPV and Benefit-Cost Analysis 664.9 Capacity Planning for March’07 69

Findings and Conclusions 70-74

Appendixes 75-97




Background Information and Methodology

1.1 Introduction

In Bangladesh, collection and recovery of loan is a vital issue, probably no less important

than the law and order issue. It could be a tough job- a battle against one of the most powerful

segments of the society- the rich. Public opinion needs to be mobilized and neutral media

should get involved against defaulters. The debate on the relationship between commercial

banks’ scope and their efficiency in handling defaulters and recovery has gained momentum

in recent years.

Standard Chartered Bank (SCB), the leading multinational bank in Bangladesh has created an

example of collecting payments from its clients who fail to make payments and become

defaulters. The bank has separated its collection and recovery activities from the other

banking activities and established an independent Collection Centre at Dhanmondi (Address:

House - 21, Road – 8, Dhanmondi, Dhaka – 1205, Bangladesh). The bank has developed asystem that ensures payments to be made against bad debts unless transactions are carried out

side the banking network. To shade light on such important area of study – Collection and

Recovery Activities of Banks, this paper represents an overall view on the Collection Centre

of the Standard Chartered Bank (SCB). So the importance of the study aiming at assessing

success status of the Standard Chartered Bank (SCB) in establishing the Collection Centre

and measuring its operational effectiveness can hardly be overemphasized.

1.2 Objectives of the Study

The broad objective of the report is to analyze the operational effectiveness of the Collection

Centre of Standard Chartered Bank (SCB). Keeping it in mind, the study includes some

specific objectives that are stated below:

• Examining the management policy applied in the Collection Centre

• Highlighting the collection strategies and procedures

• Focusing on the management structure and MIS


Chapter 1



• Assessing the dynamics of collection and recovery activities in terms of trend

• Identifying the determinates of collection cost and recovery amount

• Performing NPV and benefit-cost analyses of the collection projects

•Developing capacity plan for month March 2007

1.3 Methodology of the Study

The primary and secondary sources of data have been used in preparing this paper. The

concerned organization – ‘Collection Centre of Standard Chartered Bank’ was surveyed

physically as the part of the opportunity of continuing internship in the Collection Centre.

The instruments of data collection were face to face discussion and practical experience of

working there. Interviews with the Head of Collection, Managers, Team Leaders, Supervisors

and Collectors went a long way in assisting to prepare the report. Face to face conversation

and discussion of the Collectors with customers and the conversation over telephones with

responding to their query were analyzed.

Secondary information is also widely used in this paper. The Centre’s published and stored

materials, like- top sheets, operational statistics and relevant available literature were

reviewed for the report. The secondary data were also collected from the officials of the

Centre to cover the architecture and infrastructure of the process. Extensive search from

various sources was conducted. Helpful information about loan default culture and relevant

regulations were collected from books, journals and online publications produced by both

academicians and consulting firms. The collected information was abundantly used to

develop the theoretical framework. Moreover, the desk study covered different local

newspapers to see the present condition of loan default condition in Bangladesh.

Collections data (from 2001-02 to 2005-06) were gathered, classified, edited and complied

for the time series analysis. The data analysis involved selected descriptive and inferential

statistics. Before that, appropriate dummy tables providing framework for tabulation and

analysis were prepared. Analytical tools used in the study included measures of central

tendency and dispersion, growth and trend analysis. Conventional statistical tools like -

graphs, charts and diagrams were used to demonstrate the scenario of collection by SCB.

Ratios of performance used by the Collection Centre were employed to provide a real picture




of collection. Multiple and simple regression models were constructed to identify the factors

determining the collection cost and recovery respectively, generated by the Collection Centre.

Besides, a capacity plan was developed to justify the requirements of the number of

Collectors for personal loan team in the month March 2007.

1.4 Limitations of the Study

In the process of conducting the study, following limitations were confronted-

Time Constraint

The presentation of the report would have been made more in depth and elaborated if moretime could be managed. In fact, time is needed in two senses. First of all, the major portion of

the report was prepared during the internship period- January, February and March (2007)

and it became a bit difficult in managing time to collect adequate information besides an

internee’s respective duties. Second source of time constraint is the busy schedule of the

Officials at the Collection Centre. It was very difficult to get them free and obtain some

practical ideas regarding their expectations and opportunities regarding this topic.

Difficulty in Access to Information

Standard Chartered Bank (SCB) is highly conscious of maintaining confidentiality of

information. Confidential information regarding past collection was not accurately obtained;

rather the information was represented in approximate form as the bank is very conservative

and strict in providing information and disclosing their limitations. As data used for the

purpose of analysis were in approximate forms, certain level of inaccuracy existed in the

analysis. The Bank only publishes its annual report in England. So any copy of the annual

report could not be collected.

Limited Coverage

Self interpretation was applied in analyzing the collection performance in three specific

months. In that analysis, only banking products (BPs) were covered, but credit cards (CC)

were excluded. Because, in the Collection Centre, credit cards are dealt in wide range and it

was difficult in collecting information from the 4(four) Team Leaders of credit cards. If a

comparison in collection could be made with other banks, the analysis would be more value




Chapter 2

added. Limited experience towards practical job fields and limited knowledge might hinder

to produce an absolute authentic and meaningful report.

Collection Centre of Standard Chartered Bank: An Overview

2.1 Significance of Collection Centre: Theoretical Aspects

Non Performing Loans (NPL) reduces the loanable funds by stopping the flow of recycling of

loans and because of setting aside loan loss reserve. When money lent to a group of

borrowers is recovered, only then it can again be disbursed to other borrowers and thus the

process of credit operation can go on as simultaneous process, which ultimately influences

the bank’s profitability. Loan monitoring and collecting is a continuous process in banking so

as to define and maintain its assets quality and to prevent the clients form being default.

In respect of commercial banks, Desai (1980) suggests that the key areas of performance are

deposits, advances to priority sectors, credit to public and preferred sectors, foreign exchange,

cost and expenditure, profitability and customer service. The recovery activities and recovery

performance of a bank is directly related to some of his identified areas, like- advances to

priority sectors, credit to preferred and public sectors. Makarand (1979) in a recent study

proposes for six indictors as the determinants of the profitability of the banks viz. branch

expansion, priority sector credit and collection, deposit mobilization, export credit, net profit

to working funds and wage cost of business development. This is called the Integrity Priority

Index (IPI). Collection from the disbursed funds is a part of this index. According to the latest

World Bank Report, the financial sector remains vulnerable with non performing loans

accounting for a third of the loan portfolio.

As reported in the Daily Star (December, 2006), BDT 4.5 core was drawn from the account

of a company where the available balance was only BDT 10,000 (ten thousand). In fact,

Bangladesh is a unique country where people can manage to acquire goods and services or

even solid cash with a promise to pay. But the promise will never be fulfilled. Such

transactions are considered to be grand accomplished by the privileged few who eventually

become the leaders of the society and captains of the industry. One can borrow huge sumsagainst fictitious projects and just vanish with money. Our society has been badly tarnished




by default culture. However the major source of this default culture is the huge bag of

overdue loans with the banks. If all sorts of undue human interference with banking

operations are minimized through computerization, such over drawing of accounts, which

amounts to Criminal Act, can be made impossible. The defaulting enterprises and the clients

are likely to fail to carry out their day-to-day operations in view of the cash crunch that they

would inevitably face. The defaulters would run up to the banks and handover whatever

assets they have. The bank will then sell those assets and converts bad debts into good loans –

as far as possible. If as a result, 20% out of 30% of the total loan portfolio which are

nonperforming can be recovered- the job is done; in fact well done.

While inaugurating the Silver Jubilee Celebration of Bangladesh Institute of Bank

Management (BIBM) in 1999, Former President Justice Shahbuddin Ahmed stressed the

development of the banking sector for the growth of the national economy. He focused on the

number of problems of banking sector. The main problems that he identified were financial

mess, loan default culture, and negative activities of trade unions, excess manpower,

corruption and lack of ethics (Source: Daily Prothom Alo).

Lutfar Rahman Srakar, Ex- Governor of Bangladesh Bank also recommended that the

outstanding loan amounted to 35% of all issued loans and their delinquency had made it

difficult for banks to operate and the legal loopholes had made it difficult for banks to operate

(Source: Reuters Limited, 1998).

Since as per directives of Bangladesh Bank (BB), branches are required to classify its loans at

the end of each quarter, branches may not exercise separate conditioning procedure rather

strictly follow the loan classification and provisioning procedure set by Bangladesh Bank

vide its BRPD Circular no. 16 dated 06.12.98. BRDP Circular no. 16 of 1998 is the latest

classification and provisioning guidelines framed by Bangladesh Bank successive to BCD

Circular no. 34 of 1998 and 20 of 1994. The procedures cover the entire gamut of loan

classification, suspension of interest due, making provisions against potential loan loss

(Source: Bangladesh Bank web site).

With the view of improving, the efficiency in the banking sector, there is no option to

increase the collection from the funds disbursed to the customers. Previously, the banks

considered the collation and recovery activities as the part of the loan and advance




department, where in most of the cases, the employees who disbursed the funds were

responsible for recovery of the loans. But now, in order to keep pace with modern economy

and considering the high rate of default, the banks are separating their collection and recovery

departments form the loan and advance departments. The foreign banks, like- Standard

Chartered Bank (SCB), HSBC, etc are playing pioneer role in this case. This arrangement is

not only increasing the volume of collection and recovery, but also is generating employment

opportunity and creating valuable example of transferring Non Performing Loans in to

Performing Loans.

2.2 Collection Centre: The Case of Standard Chartered Bank

Fraud management itself has become a huge business and Bangladesh with its wide spread

default culture has become a prolific breeding ground for uncounted number of frauds. The

Collection Centre of the Standard Chartered Bank (SCB) is leading the mission of developing

default free culture in Bangladesh. Before representing the Collection Centre of Standard

Chartered Bank, the background of the bank is being represented.

2.2.1 Background of Standard Chartered Bank

Standard Chartered Bank, incorporated in England with limited liability by Royal Charter

1853, Reference Number ZC 18, is the leading Multinational Private Bank offering full range

of consumer and wholesale banking, international trade, foreign exchange, lease finance and

capital market services. The principal office of the Bank is situated in England at 1,

Aldermanbury Square London EC2V 7SB. Its three core markets are in Hong Kong,

Singapore and Malaysia and offer significant opportunities. It has strengthened its position by

moving branches to areas which offer greater opportunity for revenue enhancement. The

bank has increased market share and revenues in its existing businesses and has identified

new products and customer segments to drive future growth. Standard Chartered is listed on

both the London Stock Exchange and the Stock Exchange of Hong Kong and is in the top

hundred companies, by market capitalization. The bank is well-established in growth markets

and aims to be the right partner for its customers. It combines deep local knowledge with

global capability. The bank’s e-commerce activity has progressed significantly. The bank is

trusted across its network for its standard of governance and its commitment to making adifference in the communities in which it operates. Standard Chartered employs about 50,000




people in over 500 locations in more than 50 countries in the Asia Pacific Region, South

Asia, the Middle East, Africa, the United Kingdom and the Americas. It is one of the world's

most international Banks, with a management team comprising 70 nationalities. The

acquisition of Grindlays has allowed the bank to make a major leap in the Middle East and

South Asia, making it the leading international bank in the region. Since announcing

acquisition, the bank mobilised a sizeable team across both Banks to plan for the integration.

The bank has bought a highly regarded business with a strong management team where there

are excellent opportunities for synergies. The bank continues to add blue chip names from the

United States and Europe to the clients.

Standard Chartered Bank opened its doors as the Chartered Bank in Bangladesh in 1948,

opening its first branch in the port city of Chittagong. The branch was opened mainly to

facilitate the post-war-re-establishment and expansion of South and Southeast Asia. The bank

opened its first branch in Dhaka in 1966 and shifted its headquarters from Chittagong to

Dhaka after the birth of the Republic of Bangladesh in 1971.This is the only bank that did not

close its doors during the Liberation War in Bangladesh in 197. It acquired Grindlays

business from ANZ in 2000. Bangladesh is the first beneficiary of Standard Chartered’s

‘Seeing is believing’. The bank first issued credit card in 1997 and since then it has been the

market leader of the business. It has around 90,000 (ninety thousand) customer bases and

now capturing almost 80% market share in the country. Besides, the bank is top rated sub

custodian since 1995. With 18 (eighteen) branches and 24 (twenty four) ATMs, the Standard

Chartered is the oldest and largest foreign bank with its presence in six cities and the bank

completed its hundred years in Bangladesh. Standard Chartered Bangladesh was awarded as

the ‘Best Bank of 2005’ in the foreign bank category by Bankers’ Forum. This was

announced in the ‘Banker’s Forum Award 2005’ ceremony held on June, 17, 2006. Chief

Guest of the ceremony, Dr. Wahiduddin Mahmud handed over the award to Osman Morad,

Chief Executive Officer (CEO), Standard Chartered Bank.

The other features of Standard Chartered Bank in Bangladesh are mentioned here:

Mission - To be the right partner of the customers of the bank.

Vision - To be the best international bank in Africa, Asia and the Middle-east by 2010.

Objectives - To remain number one credit card issuer in Bangladesh and expand the business

by acquiring more merchants and increasing the client base of cards.




Strategic Intent – The World’s best international bank, leading the way in Asia, Africa,

Middle East

Brand Promise – The Right partner leading by example

Values – Responsive, Trustworthy, Creative, International, Courageous

Commitment to Stakeholders –

• Customers – Passionate about the customers’ success, delighting them with the quality of

the bank’s service

• Its people – Helping people to grow, enabling individuals to make a difference and teams

to win

• Communities – Trusted and caring, dedicated to making a difference

• Regulators – Exemplary Governance and ethics wherever the bank is

Its agenda for 2007 are - accelerating organic goal, delivering on acquisitions, improving

continuously, building leadership and reinforcing its brand. Being a country mostly

dependent on small business, business opportunities are abound in Bangladesh to let small

and medium sized enterprises to grow. To take advantages of these business opportunities,

working with the right business partners is the key. SCB is leading the way by being the first

in launching Business Financial Services on March 2004. A business can avail of deposit

products for timely utilization and easy access to their funds. Credit facilities with flexible

repayment options, trade services for domestic and international and many other products and

services tailored to their specific requirements. The offerings of the SCB are:

• Deposit products - Business account, cash management services

• Credit facilities - Business installment loan, secured overdraft, revolving loan

• Trade services - Letter of credit, guarantee

Thus the Standard Chartered Bank serves as the one stop solution for growing business in

Bangladesh.

2.2.2 Collection Centre of Standard Chartered Bank

The Collection Centre of Standard Chartered Bank represents a new concept of collecting

payments form the default companies and customers effectively. This Centre plays an

important role in ensuring the profitability and quality of the portfolio of the bank by

collecting the delinquent receivables (explained later on) efficiently and effectively. The




basic goal of the Collection Centre is to obtain payments promptly. On the other hand, the

Centre emphasizes on minimizing the collection expenses and write-off costs, other wise the

benefit of collecting payments will decline to cover the excess costs; whereas in the process

of collection, it never neglects to maintain the customer’s goodwill by a high standard of

service. For this reason it is important that the Collectors should endeavor to resolve the

account that is worked for the first time. This can be achieved by identifying early signals of

delinquency and thus minimizing losses.

Key success factors of efficient and effective collection management comprises of

appropriate investment in collection systems and tools and effective use of them, right

collection strategies, strong analytical support and finally the well-managed collection

operations that motivate the people with right skill sets. The Collection Centre’s

responsibility will commence from the time an account becomes delinquent or over limit or

both. This responsibility persists until the account is regularized by making payment for the

delinquent account or by closing the account with full payment amount collected. The

success of the collection is highly dependent on their efficiency. In the Collection Centre, the

following three types of accounts dealt by the Collectors:

1) Delinquent Accounts

An account is classified as delinquent if the minimum contractual payment amount due is not

posted or settled, after the second statement date. The definition of delinquency is:

Table 2.1; Source: Managerial Documents of the Collection Centre

2) Over Limit Accounts


Accounts Period Explanations

Interim, Bucket0 0 The customer fails to pay on due date, but does not cross month.

X DPD, Bucket1 1-29 The sum past due is equivalent to one month’s minimum payment.

30 DPD, Bucket2 30-59 The sum past due is equivalent to two month’s minimum payment

60 DPD, Bucket3 60-89 The sum past due is equivalent to three month’s minimum payment

90 DPD , Bucket4 90-119 The sum past due is equivalent to four month’s minimum payment

120DPD, Bucket5 120-

149

The sum past due is equivalent to five month’s minimum payment

150DPD, Bucket6 150 -

179

The sum past due is equivalent to six months minimum payments



Head of

Collection

Manager CollectionCredit card,

Personalloan

Officer CollectionCredit card,

Personalloan

Officer CollectionCredit card,

Personalloan

TeamLeader

Personalloan

TeamLeader

Flexiloan

Team

Leader CreditCard

Team

Leader CreditCard

TeamLeader CreditCard

TeamLeader CreditCard

Manager CollectionSME andSecured

Officer CollectionSME andSecured

TeamLeader

SME and Auto

Manager CollectionStrategy &Analytics

AssistantManager Legal andRecovery

Officer CollectionLegal andRecovery

Team

Leader Recovery

TeamLeader

Recovery

Credit Limit means the maximum debit balance permitted by the bank for an account. An

account is considered over limit when the outstanding balance exceeds the credit limit by

100% or more. Over limit charge will be imposed in that case.

3) Non-Starter Delinquent/First Installment Default (FID)

A Non-starter is a customer who does not pay on the first billing or fails to pay the first

installment of the loan. This type of accounts may arise if the customer does not receive the

statement caused by incorrect data input by the bank or mail-dispatching error by the courier

or does not know his/her obligation. Besides, he/she might be unfamiliar with the terms and

conditions or in financial difficulty, but aware about obligation.

2.3 Management Hierarchy of the Collection Centre

Management hierarchy of an organization represents the set of interpersonal relationships

which operates in the context of position procedures, process, technology and social

environment comprises. The hierarchy of the Collection Centre is here:

Fig 2.1: Management Hierarchy of the Collection Centre

The Head of Collecting is the leader of Collection Centre and holds the

topmost position in the hierarchy. The Officers of the Collection Centre




are working under the direct supervision of the Managers. The Customer

Assistance Officers (CAO), serving as the Team Leaders report to these

Officers and assist the Customer Service Advisors (CSA) or Collectors of

their teams. As the part of discussion on the management hierarchy of the Centre, the roles played by the Head of Collection and other Officials

of the Centre have been discussed.

Responsibilities: Head of Collection

The main responsibility of the Head of Collection is to ensure and arrange effective

management of collection operations, set right collection strategies to optimize collection

results, review the state-of-the-art systems and technologies available in the industry, make

right investment recommendation, manage a highly motivated, well-trained, highly

productive and objective-driven group and consult with the Managers so that appropriate

changes can be made to policies and procedures.

Responsibilities: Collection Manager, Unsecured/Secured Product

Collections Managers deal with both the secured and unsecured products. Whatever is the

security status of loans they engage in the recruiting, training and managing performance of

the pre-charge off collection team, collection resources and flow rates to prevent accounts

from flowing down to charge off. The Managers are also engaged in BPR (Business Process

Reengineering) for the Centre.

Responsibilities: Manager, Recovery and Legal

The main responsibility of the Recovery and Legal Manager is to maximize net recovery with

minimum recovery cost, coordinate legal activities, ensure efficient and effective

management of agencies, involve in recruitment, training and performance management of

the recovery team, repossession, liquidation and administration management of security.

Responsibilities: Manager, Strategies and Analytics

The Manager enhances and coordinates with Information System (IS) to resolve all

collection related system errors, maintains system parameters of CWX, evaluates the

effectiveness of all collection strategies, tastes user acceptance for all collection related




system enhancements and coordinates the evaluation process of new collection system and

makes recommendations.

Responsibilities: Customer Service Advisors (CSA) or Collectors

The key responsibilities Customer Service Advisors (CSA) or Collectors are

contracting effectively with the customers of delinquent accounts in order

to regularize those accounts, being good listener, improving flow rates,

ensuring customer satisfaction, retaining and communicating and

reducing delinquency and charge-off, possessing excellent interpersonal

skills and sound negotiation ability.

2.4 Management Policy at Collection Centre

The Collection Centre of Standard Chartered Bank (SCB) is efficiently designed with

management policy and practices which ultimately contributes to the efforts of the Collection

Members. Management is a distinct process consisting of activities of planning, organizing,

actuating and controlling performed to determine and accomplish stated objectives with the

use of human beings and other resources (Terry, Franklin). This segment of the report focuses

on some remarkable management policy of the Collection Centre.

2.4.1 Cost and Cheque Management System

Collection costs are compiled and compared to best practice benchmark. This comparison is

needed to assess whether the budget for cost is adequate or not and whether there is any

deviation between the actual cost and budgeted cost. In case of existence of any deviation, thereason of the deviation is identified and corrective action is taken. In order to ensure that

collection costs are correctly identified, a separate cost centre is used to tag all collections

related expenses. There is an agreed methodology to allocate expenses by product lines

accurately (Management did not disclose the methodology as it is confidential information).

Collection cost is broken by products by X DPD, 30 – 60 DPD and Recovery. A clear

distinction has to be made between controllable costs and allocated costs. Controllable costs

are the responsibility of Collections Head. The cost of collections includes - staff cost that

includes salary and overtime cost, system operating cost and enhancement cost, premises,




infrastructure and related costs, communication cost, postage and stationary, external agency

related cost, legal cost, repossession cost, auction cost, cost of maintenance (utilities /

property management / security), insurance, etc.

When the customers are granted credit, they are to decide a specific date when the

repayments will be made on the monthly basis. The probable dates that may be selected are

1st, 8th, 16th and 25th of the months. They sign on the number of Undated Cheques (UDC)

that contains the monthly installment amount, but no date is mentioned on the cheques. The

cheques are given to the bank while collecting loans and are stored in the asset office. At the

date selectedthrough negotiation (any of 1st, 8th, 16th, and 25th), the cheques are placed for

clearing after writing proper dates. If the cheques are dishonored, those come to the

Collection Centre. The databases of those cheques are sent from the asset office. These

cheques are treated as Post Dated Cheques (PDC).The Collectors then talk to the customers

and if the customers agree to make payment and ask to place cheques (PDC), the Collectors

place those.

2.4.2 Direct Debit Processing and Bucket Calculation Based on

Installments

Bank has the right to debit the customer’s account against the overdue

payment under the clause –‘Banker’s Right of Set off’. While debiting

general account, the debit request is forwarded to the branches for the

posting of funds into the respective account. For secured products, an

instruction is forwarded to the Manager for encashment. Manager at his-

own discretion can advice account services to en-cash lien at any point of

delinquency stage.

An Arrears Ratio is used for determining bucket. The ratio is calculated by dividing the total

arrears outstanding by the Equal Monthly Installment (EMI). EMI or Equated Monthly

Installment is the amount a customer has to pay every month to pay back that loan. The

following matrix is applied for identifying buckets:

Number of missedinstallment

DPD Explanation




> 0 and =< 1 X DPD / Bucket 1 At most 1 EMI is due

> 1 and =< 2 30 DPD / Bucket 2 At most 2 EMIs are due




> 5 150 + DPD / Bucket 6 More than 5 EMIs are due

Table 2.2; Source: Customer Service Advisors

The showed calculation reveals a customer will be termed delinquent when he/she is less than

or equal to one installment due.

2.4.3 Collector Performance Measurement and Management

The Collectors’ performance management demands sincere management attention as the

performance of the Collectors is directly related to that of the Collection Centre. The

Collection Centre of Standard Chartered Bank includes some specific policies in the

performance management process. This segment of the report focuses on the management

policies applied for performance management.

Balance Score Card

‘Balance Score Card’ is a balanced measurement of the Collectors’ performance, which takes

into consideration the efficiency, effectiveness as well as quality measures. The main

objectives of the balance score card are to set a model behavior for Collectors, benchmark

their performance against clearly defined standards so that it is clear to them where the gaps

are and how to close them.

Collector’s Code of Conduct

The Code of Conduct proposed by the management for the Collectors are represented here:• Collectors must not communicate with customers in a threatening or abusive manner,

must treat customers fairly and not mislead them, must respectfully decline any offer or

benefits from the customers or agencies.

• Without explicit authority of SCB, a Collector is strictly forbidden to collect any annual

fee, service charges, other fees or compensation from customers. Collectors are not

authorized to promise credit limit increase, annual fee discount or waiver of financial

charges.




• Collectors must never copy or duplicate customers’ personal data or information for

personal reference or use. All Collectors are bound by the secrecy declaration and

confidentiality clause and never to disclose any confidential data of the customers of

SCB to a third party.• In the event of detection or knowledge of any dishonest practices within the Collectors’

workplace, the Collectors are obliged to inform the agency and SCB at the earliest

instance. Collectors must never talk to media or regulators on any SCB matters, be it

implied or otherwise. Collectors must not permit any one to use their system passwords

premises access cards.

Collectors must strictly follow and observe instructions from SCB and bench of any of the

above will result in immediate termination of the Collector.

Call Monitoring

The primary objective of call monitoring is identifying opportunities for Collectors to

improve their communication skills so that they may get firm payment commitment from

customers. Secondary objectives of the call monitoring include identifying training needs for

the Members, recognizing good performance and improving Supervisor and Collector

relationship throughout the organization.

While monitoring calls, a supervisor evaluates the following characteristics of the calls:

• Content – The content of the call is determined by listening to the telephone conversation

between the Collectors and the customers. Based on the content of the calls, a Supervisor

will distinguish the type of calls and analyze the Collectors’ abilities to address the

situation quickly and appropriately.

• Call duration - Call duration may be impacted by technology’s response time and how

quickly Collectors can access system information. . It is not unusual for a Collector to need

to view at least two to three screens to handle a call. Collectors can spend a lot of time

flipping through screens to get information.

• After-call work time - This is the time Collectors spend updating the customers’ record

with the call results. Experienced Collectors usually update the customers’ records during

the conversation.




Call Monitoring Attributes/Checklist

Supervisors use a check-off list to evaluate the call while listening to the conversation. The

indicators, such as the Collectors’ ability to identify the customers, verify information, and

practice effective listening skills, may be rated on a scale from ‘0’ (poor) to ‘2’ (excellent).

The scores are totaled and the Supervisor may write freeform comments about the call. This

information is then provided to the Collectors with appropriate feedback and coaching tips.

Collectors’ feedbacks are evaluated by identifying opportunities, meeting goals, motivating

clients, working together, developing action plan, correcting behavior, using objective

information, delivering feedback on time and positively. The Supervisors consider a

Collector excellent and give him/her two marks if he/she consistently performs the basics,

turns broken promises in to kept promises and finally learns from past experiences.

Incentive Programs: ESAU

Incentive programs may be implemented based on balance score card result to motivate the

Collectors and to achieve better standards by linking the Collection Centre goal with

Collectors’ personal interest. Bangladesh collection has designed and implemented the ESAU

model in August 2003 towards achieving the highest level of performance standard.

Performance standards are as follows -

E= Excellent Performance standard > = 100%.

S= Satisfactory Performance standard > 85% <100%.

A= Average Performance standard > 70% < 85%.

U= Unsatisfactory Performance standard < 70%.

Newly recruited Collectors are matched into average performance group for first 3 (three)

months. Team Leaders are categorized in the excellent group by the virtue of their position.

However, Manager Collections reviews the performance of the Team Leaders and can change

the team leadership at his discretion. Termination of contract implies on Collectors who

remain in unsatisfactory area for consecutive two quarters. Awards are given in terms of

performance & extra effort towards the collection for better motivation. The incentive plan is

well defined with no ambiguity and made available to the Collectors.




Table 2.3; Source: ESAU Model, Managerial Documents

The chart represents the award structure, which is explained here:

• The Collector of the month - Highest performance (weighted average %) is the basis of

the Collector of the month. Two Collectors from Collections (cards and banking products)and one from recovery are awarded in the category.

• The All Round Performer of the month - Any other substantial achievements along

with the high level of performance (minimum of 85% achievement) are the basis of this

category. Two Collectors are awarded as the all round performer of the month, one from

credit card and another from banking product.

• The Leader of the quarter - High level of team performance (minimum 85% weighted

average) to reduce the bucket flow and minimize the risk are the key factors for consideration of this category. Two team leaders are nominated as the leader of the month

on the basis of the overall performance from both the products. The Team Leader of the

Month award is given on quarterly basis.

• Half-Yearly award - Consistence high level performance is the key factor for this

category. Other significant achievements, team playing and leadership quality, customer

service, interpersonal relationships are also being considered. A Trophy is to be handed

over as recognition and that can be retained forever by a performer if he/she can achieve itfor twice.

Table 2.4; Salary Structure: ESAU Model, Managerial Documents


Award No of Persons Amount in BDT Total Cost in

BDT

The Collector of the month 3 2,000 6,000

The All round Performer of the month 2 2,000 4,000

The Team Leader of the Quarter 2 5,000 10,000

Half yearly award 1 10,000 10,000

Team Leader Allowance 12 2,000 24,000

Award

Performance Monthly Basic Salary Additional Basic Commission (Monthly)

< 65% Each percentage point x 75 Not applicable

> = 65% until 100% 6500 Each percentage point over 65 % x 100



In base salary structure, each CSA receives an amount (Tk.75 X each percentage point) until

achievement of 65% and from 65% till 100% a consolidated amount (Tk.100 X each

percentage point). Thus the salary structure will help to increase the satisfaction and

motivation level of Collectors, which will be resulted in higher retention ratio.

Table 2.5; Commission Structure: EASU Model, Managerial Documents

ESAU model ensures » higher performance higher remuneration » tendency to perform at

consistent level » increase motivation to perform better » drop out underperformer » fair

reward policy » higher prize for higher performance » propensity to perform consistently at

higher level » boost motivation to perform better » keep hold of the good resources.

Key Performance Indicator (KPI)

Collection unit frequently uses a term ‘KPI’ – ‘Key Performance Indicator’.

Supervisors monitor this indicator. KPI is based on hourly basis working of

a Collector. In an hour, how many accounts a Collector opens and works

and how many customers he/she can contact affect KPI. Office timing,

unauthorized leave, customer complain also influence KPI.

Collection Training Certificate Program: Call Monitoring Workshop

Collection Training Certificate Program assists to establish the importance of monitoring,

measuring and motivating the Collectors, define the need of call monitoring with adequate

monitoring procedures, learn coaching and give feedback techniques, define formats and

procedures to review the Collectors’ performance. This program is based on 3Ms:

Monitoring, Motivating and Measuring. This program evaluates collectors’ calls based on the

following guidelines:

• Quality – voice, verification, clarity, language, etc.

• Effective application of techniques and call duration

• Call Management – controlling the conversation, handling difficult customers, etc.


ESAU Commission

CSA Category <=65% 70% 75% 80% 85% 90% 95% 100%

Excellent Nil 2,000 2,500 3,000 4,000 5,500 7,500 10,000

Satisfactory Nil 1,500 2,000 2,500 3,000 4,000 5,500 8,000

Average Nil 1,000 1,500 2,000 2,500 3,000 4,000 6,500

Under-

performer

Nil 500 1,000 1,500 2,000 2,500 3,000 5,000



• Follows policies and procedures

• Compliance with laws and regulations

New Hire Training Program

The SCB Collection Centre arranges special training for the newly hired employees of the

Centre. The training program for new hires combines classroom instructions and hands -on

practice session. The classroom instructions cover » organization introduction and policy »

product knowledge » system knowledge » call model » productivity indicators etc.

The hands-on practice session covers » familiarization of CWX and other basic system

screens » system updating techniques » actual collection calls, etc. There are some ongoingworkshops and development seminars, which address specific skill sets necessary to reach

goals and business objectives as well as refresh basic collection skills. Examples of such

workshops and seminars are » negotiation and telephone Skills » legal system and process »

field collection » skip tracing skills » CWX reports and KPI » credit cycle » unsecured

products » secured products.

Supervisor and Management Training Program

Supervisors and Team Leaders are the major part of the Collection Centre manpower.

Considering this, some ongoing workshops and development seminars are arranged targeting

at Supervisors and Team leaders, which improves their skills in managing the team more

effectively.

The training category also includes SAFE (Security Awareness for Employees) and Money

Laundering Training, for which certificates are awarded.

2.4.4 Agency and Legal Unit Management

Agency management is a details framework that assists the Collection Centre to recover the

payments form which collecting payments seem to be difficult. There is a formal contract and

agreement with every external agency. The following rules are followed in the agency

management process:

• Clear policy is defined when to assign the accounts to agency, how to distribute the

accounts among the agencies and how long the accounts stay with the agencies.




Consumer Product

Banking Products Credit Cards

FlexiLoan

BusinessInstallment

Loan

AutoLoan

Personal Loan Mortgage

• Agency commission structure is periodically reviewed and commission rates rationalized

and/or negotiated depending upon the volume of cases referred.

• Procedure for repossession of security is defined.

A physical visit to all major locations noted in the agency proposal paper should be made.

However, these non employed personnel will not have access to any operational area within

SCB premises and will be given access to Standard Chartered computer system with proper

risk mitigation under ‘IT Security Manual’. There is no restriction on the number of agencies

the Centre may wish to contract, as long as all contracted agencies meet the agency selection

criteria.

There is monthly audit of agency – both periodic as well as surprise visits. The audit covers »

Collector activity and techniques » financial issues (receipt book/procedures/audited financial

statements) » contract compliance (legal and regulation compliance, compliance with code of

conduct, etc.

Legal procedures include handing over the file to law firm, serving legal notice, and initiating

criminal case for Undated and post dated cheques, initiating money suit case to recover total

outstanding and property attachment. Legal tools include MIS for legal portfolio

management, customer segmentation for proper analysis of asset portfolio, Central Bank

report and legal performance monitoring.

2.5 Consumer products of the Collection Centre

In Consumer Banking, despite intense market competition, the Standard Chartered Bank has

continued to grow its mortgages, cards and deposit businesses. This segment of the report

represents an overview of the ‘Consumer Products (CP)’ for which the payments from the

customers are collected by the Members of the Collection Centre. The Standard Chartered

bank’s (SCB) ‘Consumer Products’ (CP) can be categorized as follows-




Fig 2.2: Classification of Banking Products

Personal Loan (PL)

Personal loan (PL) is the most widely used product of Standard Chartered Bank (SCB). The

clients are not required to arrange any cash security for personal loan (PL). The loan is a type

of salaried loan. Under this unsecured loan category, one Grantor will remain involved and

will assure guaranty on behalf of the customer. A very flexible PL-to meet the clients’

assorted needs, like- travel loan, medical loan, marriage loan, education loan for children,

home or office renovation loan. Six Customer Service Advisors (CSA)/Collectors work for

the personal loan (PL) collection team. Out of teams of banking products, it maintains the

largest team.

Flexi Loan (FL)

Flexi loan from Standard Chartered is a loan facility that has been custom designed to meet

the client’s emergency needs. Flexi loan is a partially/fully secured loan. The security for the

loan should be in a readily en-cashable form. It is a very flexible loan to meet the client’s

extra needs for cash, such as: house renovation, furniture or household items for personal/

family use, electrical and electronics including computer and accessories for personal use,

marriage of immediate family members, medical treatment, higher education, travel abroad,

etc. The flexi loan collection team is developed with three Collectors. The Collectors can

exercise the option of en-cashing security of the clients if it becomes necessary.

Business Installment Loan (BIL)Business Installment Loan (BIL) is one type of secured loan. This product of Standard

Chartered Bank (SCB) can be treated as a modified and wide view of flexi loan. After

successfully completion of one year loan, the client can apply for Top-up, which may be 30%

secured. The collection team of BIL is formed with six Collectors.

Mortgage

Standard Chartered mortgage offers flexible loan amount that includes registration cost.

Mortgage does not demand any cash security. It is used to purchase apartment, continue




construction work, renovation work, to bear education/medical expenses/household

appliances purchase. Interest is calculated on a monthly reducing balance, saving hand,

earned money from unnecessary interest expenses. Applicants should have at least 3 years of

service or professional or business track records. Any leased residential property including

purchase of second hand property is the proposed property for mortgage. In the Collection

Centre, the collection team of BIL deals with mortgage.

Auto Loan (AL)

With Standard Chartered auto loan, it is easier than ever to buy the car of client’s dream. SCB

offers the client a flexible and affordable loan with easy repayment options, all wrapped in

very convenient package. The loan amount depends on net monthly income. The loan is

secured by the automobile/vehicle. This automobile must be used for non-commercial

purposes. Used car (maximum 8 years from manufacturing date) can also be purchased. No

personal or corporate guarantee required. The collection team of auto loan with two members

belongs to BIL team. In case of early settlement, 3% of the outstanding loan is charged if the

loan is paid within first 6 months of loan disbursement and 2% of the outstanding is charged

if paid within first months of loan disbursement.

Credit Card (CC)

ANZ Grindlays Bank Limited first introduced the Taka credit card in Bangladesh. Credit

SCB card division offers Master Silver, Visa Silver and Master Gold Credit Card. The

Collection Centre maintains four different teams for collection from card holders. The four

teams deal with four different buckets. The range of the credit cards is larger as the number of

the SCB credit card holders is high and it is very difficult to handle a large number of

delinquent card holders by a single team.




Chapter 3

Collection Process and Strategies of Standard chartered Bank

3.1 Collection Negotiation Techniques of Standard Chartered Bank

The Collectors, while dealing with the collection process are to follow some guidelines

designed by the management of the SCB Collection Centre. The set rules and guidelines are

identified as the ‘Collection Negotiation Techniques’. These negotiation techniques improve

the efficiency and effectiveness of the collection process, ensure excellent customer service

and finally assist to meet productivity goals. According to the techniques, the SCB Collectors

while managing calls must fulfill the following requirements:

• The Collectors are to use firm and friendly tone while making the calls.

• They are to capture the attention of the customers by using interesting words.

• They should not use any terminology or technical jargons that they use frequently

(example- PTP, FID etc) as in that cases, the customers may fail to realize their accounts

condition and the urgency of payment.

• The Collectors should never forget to pursue the clients to make payments and let them

respond.

The Collectors are to control their conversation while managing calls with the client. Their

counseling approach combining two major skills - technical skills and interpersonal skills,

lead to problem solving. They start the calls strongly with the representation of the facts on

the databases containing the details information of the clients. If the customers agree to make

payment, the payments negotiation terms are to be set with the customers. The Collectors are

to confirm –

When to Make Payment

How Much to Make Payment




a) Use arms and hand gestures move while talkingb) Control how soundc) Speak clearlyd) Be attentive to pace and match with the listener e) Match the borrower’s volume

How to Make Payment

The Collectors are more tactical while dealing with priority customers. They strictly try to

avoid the negotiation loss at the time of conversation with the clients. With the view to

avoiding negotiation loss, they are to avoid personal involvement and emotional answers,

inflexible position while talking to them and setting terms, and must utilize other questions to

gain control and move forward the conversation. The Members of the Collection Centre must

be conscious of the distinctions between persuasive and pressure imposed on the customers

of the bank. If the Collectors try to create pressure on the customers, it creates negative

feelings on them which may result in barriers and rejection to make payments. On the other

hand, if the techniques of persuasion are followed, it generates security and confidence in the

mind of the customers and they will ultimately accept the arguments of the Collectors. The

designed rules for the Collectors while making telephone calls are-

Source: Collection Negotiation Techniques, Customers Service Advisors

The Collectors deal with different types of customers in the collation negation process and

their techniques of collection vary with the customers’ variety, like:

• The customers who are willing and able to pay may miss the payment as they may forget

or overlook the payment or did not receive the monthly statement. In that case, the

Collectors only acknowledge the debt.

• The customers who are unwilling and able are dissatisfied customers. The Collectors in

that case take persuasive technique for collecting payments.

• Unexpected or unplanned adverse circumstances or calamity – job loss, reduced hours,

illness, accident, death, divorce, etc or poor money manager, poor paying habits or

procrastination may create the situation where the customers are willing, but unable to

pay. The Collectors at that case may talk to higher authority of the Unit to assist the

customers to make payment.

• Unwilling and unable customers may be imprisoned or deceased and are detected from

the collection list of the Collectors.

3.1.1 Solution Selling and Managing Customers’ Resistance




The Collectors, while dealing customers are to understand the problems of the customers and

try to identify the solutions so that customers can regularize their accounts. This technique is

identified as ‘Solutions Selling’. The benefits of the solution selling are receiving the total

amount, creating urgency and overcoming objections. That’s why a popular recommendation

in the Collection Centre is – “Collection is a Sales Job”. The solution selling process

includes the followings:

• Getting a commitment for an initial amount from the customers

• Acknowledging the initial amount to the customers

• Explaining the consequences of non payment to the customers

• Selling a solutions for higher payment amount

• Getting a commitment form the customers for the reminding amount

• Creating urgency in the payment method

The Collection Centre allows the Collectors to ask different types of questions – closed or

open ending. While asking questions, they try to influence the clients. The questions are

Firm, Fair and Friendly. (A model of desired questions is represented in Appendix 3.1).

The Members of the Collection Centre often face the resistance of the customers. In that case,the first duty of them is to overcome the objections imposed by the clients of the bank. With

the view to overcoming the objections, the Collectors introduce themselves, show interest and

concern, listen carefully, obtain and provide information, build trust and credibility in the

mind of the clients, isolate the objections and reinforce the benefit of payments.

3.2 Collection Strategies Applied at the Collection Centre

When a customer fails to fulfill the agreement terms of payment, the account enters

Collections. Collections Department is responsible for collecting the overdue amount from

the delinquent customers. There are different stages and strategies involved in collection

process. Collection Strategies specify when to take what action on which accounts. Different

types of collection strategies are applied for:

• Collecting past due funds while striving to retain customers with long term profit

potential and rehabilitating them beginning to show serious delinquency behavior

• Controlling the risk from customers with a history of serious delinquency




• Reducing losses from written-off customers

These objectives are accomplished while still achieving service quality standards and

conforming to all legal regulatory and internal policy requirements. There is a standard report

in automated system, called ‘Tele-call’ report, which is the basic report to contact with the

delinquent customers. This report includes both provisioned and non-provisioned delinquent

accounts with all the necessary information for the Collectors and sorted by balance. At the

beginning of the month, all the Collectors get a list of delinquent customers of various

buckets. They are given one-month time to collect the due amount. The delinquent customers

are contacted over phone and will be reminded of their past due. Performance of the

Collectors is evaluated through the report on the basis of the actual overdue collection against

the target collection. Collectors are conscious of the reason(s) of delinquency which enables

them to plan an effective approach to deal with the situation. In the case where earlier

promises were broken, they reinforce the need for immediate payment. They concentrate on

establishing the whereabouts and assemble information if customers cannot be contacted. The

basic sources of information are through enquiry, previous history updated in CWX software

and through contact points at office. If these measures fail to establish any contact with the

customers, field visits for skip tracing are conducted.

It becomes necessary for the Collectors to practice a more aggressive approach for all

customers who have been contacted and who after that have broken promises. If the previous

service-oriented collection effort was not successful, it must be assumed that the customers

did not take the message seriously enough to either submit a payment. To gain the customers’

attention, it may be necessary to send a letter, fax, telex, e-mail or telegram and remind them

of the consequences of the action. Once agreement is established, it is still a formidable task

to convince the customers to actually submit payment. Collectors “sell” the customers their

ideas of paying their past due amount. Legal enforcement through legal notices and eventual

filing of suits are also an option that they can exercise.

3.2.1 Minimum Mandated Collection Strategies

1) Pre Delinquency Collection Strategy

Accounts may be called or treated from collections prior to becoming delinquent for different

reasons. The strategy should illustrate how to identify the pre-delinquent accounts, the




treatments, timing of the treatment, tone/scripts/main message to the customer, process flow

and tracking mechanism (for evaluation of strategy effectiveness). All the collectors of

different teams receive a fresh queue list on the beginning of each month on that they work

through out the month. CWX software will allocate new inflow accounts everyday to the

designated collectors. During various crisis periods, the need to call the customers before

they become delinquent is realized. Usually a customer moves to bucket 1(X DPD), 15 days

after the payment due date. As such an initiative was taken to identify these accounts

(accounts that missed payment but yet to move to Bucket 1) and manually allocate them to

the collector.

2) Over Limit Strategy

There are different levels of an over limit accounts which are as follows:

• Over limit level 1 (>110% and ≤ 120%)

• Over limit level 2 (>120% and ≤ 130%)

• Over limit level 3 (>130%)

Analysis shows over limit accounts have high probability of default. They are tracked

separately and given high priority in collections. Treatments to these accounts are phone

contacts/SMS, etc. The over limit strategy specifies how the over limit accounts are

identified, collection treatments (timing, intensity) at all delinquency stages, analysis to

identify over-limit reasons and tracking mechanism to monitor the effectiveness of the

strategy.

3) Delinquent Accounts and Collection Strategies

Collection Department, makes segment of delinquent accounts in to three groups - Front-End,

Mid-Range and Hard-Core. The collection strategies of these delinquent accounts are:

Front-End (1-29 DPD)

Front-end is the first collection bucket in which delinquent accounts are identified as ‘First

Installment Due (FID)’. These are high-risk accounts and demand close monitoring. At this

stage, the customers are normally contacted over phones and letters. Telephone callings are

conducted in a soft and tactful manner maintaining consistency with the customer service

level. Collectors always do an inquiry through the system to confirm if payments have




already been received before making telephone calls in order to avoid misunderstanding with

the customers. If collection letters or statements are returned from the customers due to

change of addresses, it is the responsibility of the respective Collectors to collect telephone

numbers and ask the customers to provide written instructions of addresses change to the

customer service departments and at the same time, write down the new addresses and

telephone numbers to the note pad so that next time customers can get their next letters in just

time.

Mid-Range (30-59 DPD and 60-89 DPD)

Mid-range is the bucket in which the accounts are considered to be seriously delinquent.

These accounts flow down from Front-end. Collectors exercise more aggressive approach at

this stage. Collection letters are also sent to the customers. Upon successful contact with the

customers, payment dates are secured. Constant telephone calls are made to those customers

who have given numerous broken promises.

Hard-Core (90-149 DPD)

90+ DPD accounts are considered as hard-core delinquency. Collection efforts are more

intensified at this stage. Extra telephone calls and letters are mandatory. The Collectors of

secured products take steps to liquidate the security to collect payment. At 120 DPD, bad

debt is declared. Intensive Team visits are also conducted for collection. When recovery

opportunities are considered good through legal notice, Collectors make recommendations to

the management for legal notices.

4) Automated Dunning Letters

Dunning letters are useful tools to recover money from delinquent customers. Currently a

new system- CWX is used to generate automated letters for delinquent customers

from X DPD to 90 DPD. Automated Letters are sent to the customers by courier

service. Letter specifies the contents, main message, timing, and sequence and

target group of each collection letter. Proper letter head (Collection Department),

full contract information for the customers’ to contract, SCB address, contract

numbers, e-mail address of specific collection area are to be included. It is

important to ensure that the collection letter strategy is consistent with business

objectives.




5) Settlement Policy

Settlement policy is an integral part of collections strategy. The reasons for applying a

hardship strategy could vary based on other variables in the account profile. Settlement policy

is usually applied to the late stage of delinquent accounts or charge off accounts and it

normally comes with a waiver of partial or full interest owed, and sometimes with a discount

on the principle amount. In most of the cases, the customers for whom settlement strategy is

applied, have good intentions, but do not have the ability or do not qualify to avail the credit

facility of SCB. In such cases, a certain waiver in fees, charges and interest may result

towards effective recovery. There are also situations where payments are realized from third

party – kin of customer, employer etc. waiver of fees / interest is also required in these

situations to expedite the settlement deal.

6) Remedial Management/DRP Strategy

A remedial management program or debt relief program is an installment plan to help the

customers to workout the debt situation with reduced monthly debt-servicing burden by pro-

longed repayment periods and reduced interest rates. This strategy specifies qualification

criteria, segmentation and program specification (down payment, interest, etc), process flow,

contents and sequence of customers’ correspondences, tracking mechanism, scripts,

expectations and main befits to sell at different stages of the process.

7) Legal Strategy, Agency Strategy, Recovery Strategy

The legal strategy outlines legal actions to be taken against past due customers including the

use of legal judgments and the initiation of a legal process against other assets (personal

and/or business) to collect past due amounts.

Agency strategies are prepared in line with the ‘Group External Collection Agency

Management Guide’. Agency strategy exists illustrating when and how to hand over files to

agency, how to follow up agency activities and how to withdraw files form agency. Agency

is the external party. So security issue arises wile using the strategy.

The recovery strategy specifies a recovery score that predicts the collection past due amounts

in the future and account assignment strategy that articulates how the portfolio is assigned

between in-house team and agency.




3.2.2 Collection Strategies Specific to Secured Products

For secured products, two risk factors are to be considered while deriving collection strategy

– collateral risk and customer risk . Collateral risk is best reflected by customers’ current

equity level, while customer risk is determined by the customers’ willingness and capability

to pay. The strategies applied for secured products are highlighted here:

1) DRP Strategy

DRP (Debt Relief Program) strategy specifies the selection/qualification criteria to select the

customers for DRP program, options offered to the customers (such as - lower interest rate)

with the purpose to ease the customers’ cash flow pressure, approval authority, process flow,

follow up actions tracking mechanisms, etc.

2) Repossession/Eviction Strategy

Repossession/Eviction strategy specifies the criteria for repossession/eviction, with the

consideration of benefit-cost trade off. It also defines revaluation and value write down policy

and process for the security. Legal reversal criteria and process, legal document call-back

process, collateral sales process and controls, negotiation and follow up with the customers,

cost of carrying and resale, insurance policy claims and disposition of sales proceeds with

tracking mechanism are specified in the strategy.

3.2.3 Interest of Classified Loans

Interests on loans classified as bad debts may not be charged on the respective accounts.

Branches will calculate interests of monthly basis to credit the interests to interest suspense

accounts. Branches maintain those interest suspense accounts and monthly proof sheets are

prepared with the ‘ledger balance of the interest suspense on classified loams’.

3.3 Collection Steps for Consumer Products

Customer Service Advisors (CSA) or Collectors working in the Collection Centre attain

customers’ phone calls, listen their problems or queries and give appropriate solutions.

Oppositely, customers call to the Collection Centre to solve their problems and feel very

confident if the Members of the Centre can provide the prompt and right solutions (A model




of customers queries are represented in Appendix 3.2). The Collectors are to move through

the following sequential steps while calling the customers:

Step 1: Verifying Information

At the beginning, the Collectors verify mailing addresses, daytime

numbers, evening numbers and other telephone number(s) – mobile

phone, pager, relative, etc. of the customers.

Step 2: Obtaining RFD - Reasons for Delinquency

The Collectors try to justify the reasons of delinquency, customers’

financial condition, customers and/or spouses working condition or

capability, etc.

Step 3: Explaining Benefits to Pay/Consequences

This stage focuses on explaining the following benefits to the customers –

Table 3.1; Source: Collection Negotiation Technique, Customer Service Advisor

Step 4: Getting Kept Promises and Maintaining Documents

The promises are taken in the following forms –

How much – Total amount due is informed at the beginning of negotiation

When – A specific payment date is fixed

How – Paying at branch, by mail, money order or account debit instruction

Where – At any branch or ATM


Delinquenc

y

Benefit = Avoiding a consequence

X DPD Avoid late payment charges and restriction from limit

enhancement

30 DPD Avoid late payment charges and block status of card

60 DPD Avoid late payment charges and block status and suspension

of card

90 DPD Avoid Hot list and circulation of the same within the

merchants. Avoid being a highly delinquent customer and a

restricted person for Financial Institution

120 DPD Avoid cancellation of facility and legal action

150 + DPD Avoid dealing by collection agent and legal action



What is the source of funds – Cash on hand, income, borrowing the

money, selling property

The Collectors write the concise summary and abbreviated notes of thewhole communication in the system for future references and follows up.

3.4 Agency File Handover Process

A bulk number of accounts can not be effectively contacted through phone calls due to

unavailability of the customers or addresses/phone numbers changes. These accounts do not

belong to skip cases, but are difficult to contact. Another set of customers requires field visit

for negotiation. In that case, ‘External Collection Agencies (ECA)’ may be appointed. Legal

and Recovery Officer Initiates the list of files for agencies, obtains approval from Legal and

Recovery Manager and prepares an allocation package, which includes total number of files

and volume, and a hard copy of the allocated files to the agencies.

Collectors have the option to apply the agency options if they face difficulty in collecting

payments. Collectors take permission from their supervisors for assigning any new file to

agency. Supervisors then obtain approval from Legal and Recovery Manager or Officer, and

prepare allocation packages for the agency. This new file allocation will only be completed

upon signing the notification letter either by Manager- Legal and Recovery or Officer-Legal

and Recovery. The unit preserves a receive copy of the notification letter and hard copy of

the list of new files signed by the agency authorized person.

Currently there is a separate team to monitor the activities of ECAs in dealing the accounts

referred to them. If no progress is found in a number of files, Legal and Recovery Manager

can withdraw all those files at his discretion after minimum of 3 (three) months from the date

of assignment. Those files can be referred to another ECA. In the process of re-assignment of

files, list of files the withdrawn are excluded and new files may be included.

3.5 Recovery Strategy




Legal andRecovery Team

Recovery Unit Legal Unit

Regular Team Special Team

An account is charged off when it enters 150+ DPD, therefore it fails to pay 6 (six) months

due payments. In that case, the account is treated as bad debt. Recovery unit monitors this

type of accounts with a view to maximize recovery. The structure of recovery team is as

follows:

Fig 3.1: Recovery Team Structure

3.5.1 Recovery Strategy for Credit Card

Since credit card is an unsecured product, Unit anticipates meticulous monitoring and follow

up process to ensure highest recovery effectively and efficiently. The recovery steps for credit

cards include in house telephone calls, visit customer, demand letter, recovery agents and

legal notice issuing if necessary. New charge-off accounts are dealt separately to ensure

highest recovery from those. After one month recovery effort, contactable and paying files

are handed over to regular team and non-paying and skip accounts are handed over to the

special team.

Paying accounts are monitored by the regular team. Since recovery probability of these files

is higher than that of other files, initiatives are taken for settlement by providing attractive

waivers to the customers. Non paying accounts are thoroughly monitored by the special team.This effort includes regularizing or collecting valid addresses to shape the portfolio. Since

payment possibility from these accounts is very low, the initiatives taken are special

campaigns, like - developing new commission structure for Collectors, separating teams for

non-paying and non traced accounts, constructing recovery field visit team and using legal

unit properly.

3.5.2 Recovery Strategy for Banking Products




OrganizationOrganization

ManagementManagementTechnologyTechnology

MIS

Loan products are fully monitored and managed by a combined effort comprising of in house

effort and external agency effort. As there remains a huge potential, recovery unit pays an

extra attention to ensure efficient recovery. The following are the recovery steps applied in

loan product recovery process:

Personal Loan: In house telephone calls » visit customer » demand letter » recovery agents »

combined effort » legal notice » criminal case

Flexi Loan: In house telephone calls » visit customer » recovery agents » combined effort »

legal notice issuing » criminal case

Business Installment Loan: In house telephone calls » visit customer » recovery agents »

combined effort » legal Notice » criminal case

Auto Loan: In house telephone calls » visit customer » recovery agents » litigation

Mortgage: In house telephone calls » visit customer » recovery agents » combined effort »

Foreclosure

PL and IL are separately monitored by the in house team and agency. BIL is closely

monitored by in house team, agency and litigation (if necessary). AUTO is monitored by in

house team and repossession activities are conducted by external agency.

3.6 Management Information System of SCB Collection Centre

Today it is widely recognized that information systems knowledge is essential for Managers

as the most organizations need management information system to survive and prosper. As

the part an analysis on the Collection Centre of Standard Chartered Bank, an overview on the

MIS of this centre has been represented. All information systems can be described as

organizational and management solutions to challenges posed by environment that will help

to create value for the SCB.

Fig 3.2: MIS- The Combined form of Organization, Technology and Management




The objectives of the Collection Centre for using developed MIS are establishing the

importance of monitoring, measuring and motivating the Collectors, defining the need of call

monitoring with adequate monitoring procedures, learning coaching and feedback techniques

and defining formats and procedures to review. In the Collection Centre, the Managers,

Officers and the Team Leaders have access to the internet and intranet. They can access those

for exchanging mails and browsing. The intranet of the bank is private and is protected from

public visitors by firewalls – security system with specialized software to prevent outsiders

from invading private networks.

The Team Leaders collect the information on performance of the Collectors, portfolio and

payment condition and other relevant information and mail those documents to the Managers.

After proper approval of those documents, the Managers mail those to the Head of

Collection. Information security is important for all members of the Collection Centre. All

information and assets must be protected. This includes not only the information on the

computer but also the confidential fax on the desk and conversations with clients. A large

percentage of information security problems arise because the internal staffs either

deliberately or accidentally misuse information. While sending information by e-mails, the

users of internet have to justify whether the information is confidential or its divulgence or

modifications would cause damage to the Group or its reputation. Besides, the senders are

strictly prohibited from sending any illegal, libelous, defamatory e-mails or the e-mails which

might have other adverse consequences under criminal law or civil law. The users of the

internet at the Collection Centre of Standard Chartered Bank are not allowed to load any

software on the bank’s computer through their access to the internet at office. While sending

information by e-mails, the users of internet have to justify whether the information is

confidential or its divulgence or modifications would cause damage to the Group or its

reputation. Besides, the senders are strictly prohibited from sending any illegal, libelous,

defamatory e-mails or the e-mails which might have other adverse consequences under

criminal law or civil law. They should not use e-mails for highly confidential information

where they must be sure that only they and recipients can read or modify the mails, even it is

inside the Group as in the internet, and a large group of people can read mails. Only the

senders, recipients and a small group of trusted Staffs can read an ordinary e-mail sent inside

the team. If it becomes an emergency to use e-mails for exchanging confidential information,

they will have to talk to the Information Security Team (IST) about using encryption to

protect the information.




3.7 Architecture and Infrastructure of the Collection Centre

The architecture of the Collection centre represents its practice of applying a comprehensive

and rigorous method for describing a current and/or future structure and behavior the

collection processes, information systems, personnel and organizational sub-units, so that

they align with the organization's core goals and strategic direction. The primary purpose of

creating enterprise architecture is to ensure that business strategy and IT investments are

aligned. Its infrastructure provides the foundation on which the Collection Centre can build

its specific information system. It consists of computer hardware, software, data and storage

technology and networks providing a portfolio shared information technology resources. As

the part of the analysis on the architecture and infrastructure of the Collection Centre, the

movement from its strategic goal to the infrastructure has been explained here.

Step 1: Setting Strategic Goal for the Collection Centre

The goal of the collection process is to obtain payments promptly while minimizing

collection expense and write-off costs as well as maintaining the customer’s goodwill by a

high standard of service. For this reason, it is important that the Collector should endeavor toresolve the account the first time worked. Collection also protects the assets of the bank.

Step 2: Translating Strategic Goals to Business Requirements

In order to achieve the strategic goals, the architecture of the Collection Centre needs to

translate its strategic goals to business requirements; some of the business requirements are-

• Providing training to the Members of the Centre in relevant softwares and security of the

system

• Maintaining proper communication with the clients and among themselves

• Maintaining efficient and updated databases, etc.

Step 3: Appling Strategy-Architecture-Infrastructure Frameworks

One of the major components of architecture deals with how to obtain, store and use data to

support the business requirements. The Collection Centre has client-server architecture to


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





share data from the sources to final storage and report preparing. The client/server software

architecture is a versatile, message-based and modular infrastructure that is intended to

improve usability, flexibility, interoperability, and scalability as compared to centralized,

mainframe, time sharing computing. It maintains Multiple Database Management System

(MDBMS) and distributed server. Using a Relational Database Management System

(RDBMS), clients’ queries can be answered directly by seeing transaction conditions

displayed in the eBBS software (discussed in software segment).

Step 4: Translating Architecture into Infrastructure

Good Operation Infrastructure is fundamental to smooth running of collection operation. The

key elements of a good collection infrastructure other than system are:

• Brightly lit interiors

• Space allocated to each agent is not congested

• Hands free telephone instruments, mobile phones, bulletin boards

• Notice boards to display productivity/effectiveness

• Refreshment / recreation room, meeting and training rooms

• Work flow management to reduce paper/non-call related work for Collectors

• Back office tasks automated to the extent possible

The Floor Plan in the Collection Centre is set up as that of a call centre with proper partitions

and enough space between Collectors. This arrangement helps the Collectors to focus on

managing the production of calls. Supervisors and Team Leaders’ workstations need to be

closer to each group of Collectors to enable Supervisors answer Collectors’ questions on the

floor, handle calls from difficult customers who make problems in making payments or who

are traceless, make decisions about specific customers situations, respond to customers

complaints, etc. MIS infrastructure is developed with hardware, software, data and network.

A brief description of MIS infrastructure of the Collection Centre is represented hare.

Hardware

Hardwares used by the Collection Centre are all from the DELL Corporation. These

hardwares are allocated to the Staffs from the head office and the Staffs have their own IDs

and passwords for accessing their personal computers (PCs). The Team Leaders are

responsible for informing the higher authority about the requirements of hardwares.


http://www.sei.cmu.edu/str/indexes/glossary/usability.html


http://www.sei.cmu.edu/str/indexes/glossary/flexibility.html


http://www.sei.cmu.edu/str/indexes/glossary/interoperability.html


http://www.sei.cmu.edu/str/indexes/glossary/scalability.html




http://www.sei.cmu.edu/str/indexes/glossary/scalability.html



Software

SCB has the most updated computerized system to run the business and keep record of the

transaction and repayment history, which other card issuers and lenders in the country do not

have. The system is online and can keep all the information regarding customer, transaction,

merchant and other related issues This segment will represent a details of the custom made

softwares (Programs written for specific purposes and specific organizations) of the

Collection Centre.

1) Collection Work (CWX)

Collection Works Exchequer (CWX) software was installed in Bangladesh in July 2005. At

that time, users of the software and supervisors were trained up. CWX is being used for credit

cards (CC) and banking products (BP) from August and October 2005 respectively and since

December 2005, the software is assisting the call monitoring process. The core collection

system CWX is used by all the collection Staffs and Supervisors for day to day collection

activities. Through this software, the Collectors at a glance find customers’ different

important information and collection history. Not only that, if customer has any complain, the

Collectors can easily and promptly transfer those to their supervisors. Bucket wise inventory

report and the report segregated by starter / nonstarter are represented by CWX. It is used to

prepare and finalize Performance Appraisal Reports on monthly basis. These reports are

prepared by the Collectors that include detailed report containing card number, limit, balance,

minimum due, collected amount and minimum due recovered. The reports also cover the

summary reports containing performance parameters. It assists in identifying key

performance indicator (KPI) of the Collectors.

There are two separate versions of CWX are:

• One is the collector version which is used by the Collectors and Team Leaders to view

and work on their queue.

• The other version is on the supervisory module which is used by the Team Leaders and

Managers. Here, the Team Leaders can view their team productivity and efficiency

reports and the Managers can set system parameters and view the portfolio level reports.

2) ebbs Software




eBBS was introduced in Bangladesh in 2003. eBBS is the core banking and transaction

processing system used in Bangladesh. All the personnel of Collection Department have

access to this software with viewing rights to use the ‘enquiry’ module. Live update of

enquiry of transactions and customers information of credit cards and banking products are

available from this program. Besides, if the clients maintain any linked accounts from which

payments can be collected, the Collectors click on the ‘sweep’ to identify the accounts and

observe its available fund condition. They can also come to know of the personal

information, account opening area and payment pattern of the clients. It is to be included that

the Staffs of the Collection Centre can not give inputs to the system; the inputs are given at

the branches when the clients receive and pay to the accounts.

3) Cards400

Cards400 is the credit card system and all the personnel of Collection Department have

access to cards400 system with viewing rights. Like the eBBS, this software also provides

live update of enquiry of transactions and customers information of loan products. The

Collectors at the credit card segment and Supervisors have access to this system.

Other Software

• DLC400 is used in dunning letter generation for credit cards.

• eCRM is the software used in customer complaints management process.

• eCAPS is a cards application processing system.

Differentiation in software may be needed for the sake of competitive advantage and to

comply with the change in management policy. In that case, the Collection Centre makes

some modifications on its currently used software applications. The management asks the

vendors to modify the softwares and vendors make some changes on the softwares according

to the requirements. The Centre also arranges training for both the Members of the

Collection Centre for specialized softwares.

Data

The Collection Centre uses distributed database. Most of their database software includes

tools for data analysis. Databases run securely to ensure data is adequately protected. All

routine activities are defined and documented. The security of collection related data is

strictly maintained.




Network

The network of the Collection Centre is wide. LAN access is created by using the appropriate

accounts templates to ensure that the users posses only the access for which they are

authorized. Certain cost or fees are involved in the creation of new LAN account. In the

network, access is controlled to ensure that only authorized individuals gain access to

information and system within the Group and that individual accountability is assured.

Management of a network does not decrease the level of security defined for that network or

offer new opportunities for compromise. Management communications incorporating

sensitive information is protected against unauthorized interception.

Finally, collection MIS plays a vital role in collection inventory tracking and monitoring as

well as comparing current payment flow with the past payment flow. The trends, over limit

and delinquent account trend of the customer who due their first installment (FID customers)

is also determined by MIS. The other benefits of the collection MIS are - agency performance

tracking, recovery performance tracking, legal activity effectiveness tracking, individual

Collector performance tracking (monthly balance score card), capacity planning model, auto

repossession tracking, cost tracking, etc.

3.10 SWOT Analysis on the Collection Centre





Analysis Strength (S) Weakness (W)

SW • Separated Collection Unit with

efficient manpower

• Effective training and internal

control

• Effective agency and legal team

• Customized softwares that assist in

record keeping, monitoring performance, etc. and online

banking• Incentive program and attractive

salary structure

• Strict and well designed rules for

dealing the customers

• Absence of contract

between HR andCollectors

• Communication gap

between the higher management andCollectors

• Pressure on the

Collectors, specially atthe end of the month toachieve targets

Analysis Opportunities (O) Threats (T)

OT • The recent improved legal and

political condition generates theopportunity for more collection andrecovery.

• The cost of appointing agency isdeclining.

• The bless of technology supporting

collection activities

• Competitive

environment and highstandard services

provided by other

foreign banks• Entrance of new

commercial bank withnew technology

• Switching tendency

among the Members of the Unit



Performance Analysis of Collection and Recovery

Our social-economic as well as business world is dynamics, uncertain and affected by

multiplicity of causes. There is hardly a field of endeavor in which variables are not

interrelated. To analyze widely the status and performance of collection and recovery

activities of the Collection Centre of Standard Chartered Bank, various statistical tools have

been incorporated viz. time series analysis, growth rate, acceleration rate, regression analysis,

net present value analysis (NPV) and benefit-cost analysis on different variables covered in

this sector.

4.1 Trend Analysis of the Collected Amount


Chapter 4



Y = a + bt

Y = 483.3 + 87.9t

G = 11.68%

The collection unit of the Standard Chartered Bank deals with various categories and

segments of loans. As the part of the financial analysis, the trend analysis was performed on

the basis of historical time series of the collected amount of the bank during the period from

2001-02 to 2005-06. The trend equation of collection from customers was:

(The calculation of trend equation was shown in the Appendix 4.2)

Where,

Y was the value of the amount collected

a was the constant. It was the estimated value of Y when t = 0

b was the trend/slope of the line

t selected time periods

Based on the calculation given in Appendix 4.2, the derived trend equation was:

The equation indicates during the period of 2001-02 to 2005-06 the collection from

customers increased at an average rate of $87.9 million per year. On the basis of the above

equation, the collection from the customers for the year 2006-07 will stand at $1,010.7million.

4.2 Growth and Acceleration Analysis

The growth rate of the amount collected from the customers was also determined based on

the last five years that was from 2001-02 to 2005-06 years’ collection (Appendix 4.3). The

growth rates in the different years reveal that the amount collected by the bank fluctuated

from one year to another year. In every consecutive year, the rate of change was moving

toward different directions, which can not be treated as very satisfactory collection

performance. But the average growth rate during the period of 2001-02 to 2005-06 indicated

that the bank showed remarkable improvement in collection in the recent years. The impact

of this performance increased the overall collection growth rate for the last five years. Data

on collection showed that the growth rate was:




0

300

600

900

1200

1 2 3 4 5

Collection

A= 8.09%

(The calculation was shown in the Appendix 4.3)

The acceleration rate of the collection of SCB during the last five years helps to determine

what will be the collection of the bank in the near future if the bank’s collection progress in

the similar fashion. This is very important because this forecasting will allow the bank to

pinpoint the area where it needs to concentrate more for better collection performance. The

acceleration rate of collection during the above mentioned periods was:

(The calculation was shown in the Appendix 4.3)

Fig 4.1: Collection Trend

It may not be out of place to mention here that overall the amount collected from the

customers was increasing at a satisfactory rate and indicating its efficiency in operations. The

acceleration rate of the collection of the bank was also indicative of the positive trend in the

future growth rates. The high value of the acceleration rate demonstrated enhancements in

bank’s capacity to recover the dues from the customers at an increasing rate in the years to

come.

4.3 Regression Analysis: Determinants of Collection Costs

Conventionally it may be said that the collection cost incurred by the Collection Centre of

Standard Chartered Bank in Bangladesh in the collection and relevant processes, depends on

the operational efficiency of the Centre. But as opposed to conventional thinking, it can be

justified that collection and recovery cost of the bank depends on a number of both internal

and external factors.




Y = a + b1X1 + b2X2 + b3X3

Y = 183.707 – 0.864X1 + 6.795 X2 – 1.086 X3

Here, some internal factors were considered for analyzing the determinants of the collection

costs of the SCB Collection Centre. Regression analysis is a statistical tool with the help of

which one can estimate the unknown value of one variable from known value of another

variable. It measures the relationship in absolute term. Multiple regression analysis was done

to analyze the relationship between total collection cost as dependent variable and collection

cost for secured, unsecured products and number of Collectors as independent variables. In

the report, it was assumed that the relationship among the variables was linear as:

(The calculation of regression equation was shown in the Appendix 4.4)

Where,

Y was the value of dependent variable total collection cost

a was the value of constant

X1 was the value of independent variable collection cost for unsecured products

X2 was the value of independent variable collection cost for secured products

X3 was the value of independent variable number of Collectors

b1, b2, b3 were the regression coefficients

Based on the data provided in Appendix 4.4, the values of the coefficient and constants were

calculated. Correlation coefficients were also calculated to estimate the relationship among

the variables. The estimated regression model for the variables was:

Linear equation shows:

• b1 = -0.864 which indicates if the cost of collection from unsecured products increases by

BDT 1 thousand, then total cost of collection decreases by BDT 0.864 thousand provided

the other independent variables remain unchanged.

• b2 = 6.795 which indicates if the cost of collection from secured products increases by

BDT 1 thousand, then total cost of collection increases for BDT 6.795 thousand provided

the other independent variables remain unchanged.




• b3 = -1.086 which indicates if the number of Collectors increases by 1 thousand, then total

cost of collection decreases for BDT 1.086 thousand provided the other independent

variables remain unchanged.

• R = 0.991 indicates that there exist a very high degree of positive relationship among

variables.

• R 2 = 0.981 indicates that 98% of the variations in the total collection costs can be

explained by the combined variations of unsecured product cost, secured product costs

and number of Collectors. Therefore, the independent variables collectively play an

important role on total collection cost.

From the ANOVA table (shown in Appendix 4.4), it can be concluded that the results were

statistically significant at the 5% level, as the significance level indicated in the ANOVA

table was 0.001 or 0.1%, which was less than 0.05 or 5% level.

As indicated by the t-statistics (from the Coefficients table shown in Appendix 4.4) it can be

concluded:

• b1 (unsecured products’ collection cost coefficient) was statistically significant because it

was significant at 0.047 or 4.7% level which was less than 0.05 or 5% level.

• b2 (secured products’ collection cost coefficient) was statistically significant because it

was significant at 0.008 or 0.8% level which was less than 0.05 or 5% level.

• b3 (number of Collectors coefficient) was statistically significant because it was

significant at 0.000 or 0% level which was less than 0.05 or 5% level.

The betas of the independent variables represent the degree of the influence of the

independent variables on the dependent variables. From the coefficient table (shown in

Appendix 4.4), the following facts were pointed out,

βunsecured cost = -0.702

βsecured cost = 0.281

βnumber of Collectors = -1.172

As beta for number of Collectors was highest than the betas of unsecured and secured

products’ cost, number of Collectors exerts more influence on total collection costs.




Multicolinearity exists when correlation coefficient between the independent variables may

be higher than the coefficient between dependent and any other independent variables or

when correlation coefficient between the independent variable is greater than 0.8. According

to the Pearson correlation,

r unsecured cost, secured cost = 0.184

r unsecured cost, number of Collectors = -0.173

r secured cost, number of Collectors = -0.159

Here, it can be firmly concluded that the problem of multicolineraity does not exist because

correlation coefficient between the independent variables are not greater than 0.8 or 80% and

lower than the coefficient with dependent variable.

4.4 Cross Sectional Analysis on Different Banking Products

This project paper is prepared based on the information collected during the internship period

–January, February and March, 2007 at the Collection Centre of Standard Chartered Bank in

Bangladesh. The collection picture of the bank during the period has been analyzed and

justified by using Cross Sectional Analysis (Appendix 4.5), which rpresents comparative

performance in a specific time frame. This analysis includes the banking products: PersonalLoan, Flexi Loan, Business Installment Loan and Auto Loan. Here, the analysis of the

credit card is not represented.

Personal Loan

Month January

The information of collection in the Appendix 4.5 for the month January represents thecollection performance of personal loan in that month. The figure 4.2 represents the deviation

between the targeted and actual amount of collection in different DPDs. The deviation is

relatively high in the 120 bucket. Whereas the 0 bucket and interim show relatively better

performance indicating relatively effective and sincere effort from the Collectors of the X

DPD. The Collectors of 30 DPD and 60 DPD show better performance than the Collectors of

90 and 120 DPDs. This observation will be more clarified if the ratio of achieved amount and

targeted for each bucket is determined.




0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

Inter im X DPD 30 DPD 60 DPD 90 DPD 120

DPD

Actual target Achievement

0

400

800

1200

1600

2000

Interim X DPD 30 DPD 60 DPD 90 DPD 120DPD

Actual Target Achievement

Fig 4.2: Comparison between Target and Achievement

The ratios of the collected amount to targeted amount are as follows:

Interim (Tk) = 6,175,346.17 / 7,707,107.50 = 0.801253411

X DPD (Tk) = 2826134.96 / 3743984.79 = 0.754846806

30 DPD (Tk) = 1567853.53 / 3114935.28 = 0.503334223

60 DPD (Tk) = 930968.14 / 2305543.59 = 0.403795506

90 DPD (Tk) = 127839.6 / 345853.47 = 0.369635152

120 DPD (Tk) = 250203.84 / 1021762.52 = 0.244874748

Here, the higher the ratio, the better the performance.

In addition to this situation, if a comparison is drawn between the number of actual accounts

handled and the number of the accounts from which payments are collected then this situation

will be better understood. The number of accounts is declining as the accounts move to the

higher buckets, whereas the 90 bucket shows higher efficiency in terms of the number of

accounts as only 4 accounts remains to be unpaid in the month January. But its deviation

from the targeted collected amount is BDT 218,013.7. That is on an average per account

uncollected amount for 90 DPD is BDT 54,503.4675; whereas per account collection for thisDPD is BDT 15,979.95.




0.00

2,000,000.00

4,000,000.00

6,000,000.00

Interim X DPD 30 DPD 60 DPD 90 DPD 120 DPD


0

200

400

600

800



Fig 4.3: Accounts Condition for Different Buckets

Month February

This figure 4.4 is developed based on the information of the collected and targeted amount

represented in the appendix 4.5. Here, excellent collection efficiency is derived in the 30

DPD as the Collector dealing with the 30 DPD has not only fulfilled his target but also

collected more than his target. The deviation between target and achievement is much higher

for 60 DPD which is BDT 625, 25.48. Still that, the performance of 60 DPD improves in this

month which is revealed by the performance ratio of the Collector.



Interim (Tk) = 4,818,193.56 / 5,578,062.08 = 0.863775535

X DPD (Tk) = 3,537,868.60 / 4,521,208.25 = 0.782505119

30 DPD (Tk) = 1351049.44 / 1325923.45 = 1.018949804

60 DPD (Tk) = 1,081,156.41 / 2,169,534.50 = 0.498335661

90 DPD (Tk) =226,512.53 / 851,538.01 = 0.266004015

120 DPD (Tk) =55,500.06 / 259,510.06 = 0.213864773




0.00

2,000,000.00

4,000,000.00

6,000,000.00




If the accounts condition is analyzed, it is revealed that the Collector of 120 DPD shows

efficiency in collecting payment from 5 accounts out of targeted 8 accounts. But the ratio of

performance is not satisfactory as the deviation from the target in this DPD is BDT 24,010.

This deviation indicates the accounts from which payment can not be collected are high

enough to generate this high deviation. Again, in the 30 DPD, 35 accounts remain to be

unpaid though the collected amount from this DPD is still high than the target. This indicates

the accounts from which payments are collected made higher than the required payment.

Here, though the Collector of 30 DPD has collected amount higher than the required amount,

he is required to be conscious of his accounts condition as the accounts that have not been

paid will move to higher bucket.

Month March

The month March seems to be favorable for the Collectors dealing with X DPD as their

collected amount is very close to their targeted amount. The collection generated at the 30

DPD falls in the month. The Collector fails to fulfill the target and faces a deviation of BDT

1,639,885.24. The accounts condition of the Interim is not satisfactory though its ratio is not

high enough. The Collectors of interim are succeeded in collecting payments from 458

accounts out of 553 accounts. The deviation from the target in this DPD is 95 accounts.



Interim (Tk) = 4,341,571.32 / 5,606,202.98 = 0.774422784




0

200

400

600

800



0%

20%

40%

60%

80%

100%

January February March

120 DPD 90 DPD 60 DPD 30 DPD X DPD Interim

X DPD (Tk) = 4,615,456.25 / 5,663,546.37 = 0.814941019

30 DPD (Tk) = 2,127,245.56 / 3,767,130.80 = 0.564685877

60 DPD (Tk) =1,090,690.54 / 2,305,156.73 = 0.473152444

90 DPD (Tk) = 273,845.26 / 812,002.76 = 0.337246711

120 DPD (Tk) =113,050.73 / 486,474.00 = 0.232388021


Summary of Performance

• Interim collection increases in February and falls in March.

• Performance of X DPD improves continuously.

• Performance of 30 DPD increases by higher degree in February, but

falls in March.

• 60 DPD shows slight fluctuations in performance.

• Collection in 90 DPD falls in February, but recovers in March.

• Collection in 120 DPD also falls in February, but recovers in March.

Fig 4.8: Comparative Performance




0

100

200

300



0.00

4,000,000.00

8,000,000.00

12,000,000.00


DPD


Flexi Loan

Month January

The appendix 4.5 represents the information of targeted and actual collected amount of

payments from the customers for flexi loan. The graphical representation of the information

(Fig: 4.9) reveals an interesting condition of collection in the 120 DPD. The targeted amount

at this DPD is BDT 65,559.78, but the Collector of 120 DPD fails to collect any amount from

the clients of the SCB. At the same time, the Collector of the 90 DPD shows tremendous

success as his collected amount from the customers is higher than the targeted amount.

Besides, the Collectors of interim and X DPD also show satisfactory performance, but the

Collectors of the 30 DPD and 60 DPD are demanded more attention as their deviations fromthe targeted amount are still high. Besides, the Collector of 90 DPD collects payment from 5

accounts out of targeted 9 accounts and his per account payment is BDT 164,846.454.



Interim (Tk) = 7,319,563.39 / 8,485,570.24 = 0.862589453

X DPD (Tk) = 4,937,697.14 / 5,663,473.22 = 0.871849649

30 DPD (Tk) = 1,347,672.69 /1,972,038.42 = 0.683390687

60 DPD (Tk) = 824,232.27 / 1,346,391.82 = 0.612178608

90 DPD (Tk) = 824,232.27 / 555,443.23 = 1.483918113

120 DPD (Tk) = 0 / 65,559.78 = 0




0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

Interim X DPD 30 DPD 60 DPD 90 DPD 120

DPD



Month February

In the month February, the Collector of the flexi loan in the 120 DPD shows better

performance as he becomes able to collect payment from the 2 accounts out of 3 targeted

accounts. His collected amount of payment is BDT 132,816.04.



Interim (Tk) = 6,466,861.99 / 7,846,321.30 = 0.824190311

X DPD (Tk) = 4,130,482.55 / 4,950,411.49 = 0.834371558

30 DPD (Tk) = 1764025.36 / 2,566,903.97 = 0.68721907

60 DPD (Tk) =292,519.29 / 555,756.92 = 0.526343945

90 DPD (Tk) = 336,910.25 / 626,878.80 = 0.53744081

120 DPD (Tk) = 132,816.04 / 318,336.99 = 0.41721837

The ratios reveal that the Collectors of the interim and X DPD show better performance as

the ratios of the collected amount to the targeted amount of this two DPDs are higher than the

other DPDs, whereas the performance of the Collector of the 30 DPD falls in the month

February. If the performance is analyzed from the perspective of the number of accounts, it is

found that the Collector of the 60 DPD shows success in collecting payments from 11




0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00


DPD


0

100

200

300



accounts out of his targeted 13 accounts. But his collected amount maintains deviation from

the targeted amount by BDT 263,237.63; that is per account of uncollected amount is BDT

131618.815 and per account collected amount is BDT 26,592.66. This situation indicates that

though the Collector has collected payment form the most of the accounts, the accounts

remained to be uncollected are large enough to decrease the ratio and increase the deviation

of the collected amount form the targeted amount.


Month March

In the month March, the Collector of the 120 DPD fails to collect any payment from his

customers. On the other hand, the Collector of the X DPD shows better performance and with

her sincere effort she is able to collect most of her targeted amount. The payment collected at

the 90 DPD is not satisfactory in the month as the Collector generates a deviation of BDT

75,680.49. Here, at 90 DPD, the Collector is succeeded in collecting payments from all the

accounts, still that in terms of his payment condition, the performance is not better and his

performance ratio is 0.47834077 which is much lower than the performance ratio of X DPD

that is 0.926132115.





0%

20%

40%

60%

80%

100%



0

100

200

300



The ratios of the collected amount to targeted amount are as follow:

Interim (Tk) = 5,420,101.10 / 6,836,669.68 = 0.792798446

X DPD (Tk) = 5,021,686.78 / 5,422,214.28 = 0.926132115

30 DPD (Tk) = 1,956,013.71 / 2,662,774.92 = 0.734577187

60 DPD (Tk) = 565,780.72 / 1,090,645.78 = 0.518757538

90 DPD (Tk) = 69,396.00 / 145,076.49 = 0.47834077

120 DPD (Tk) = 0 / 193,665.68 = 0



• Collection at interim is continuously falling.

• Collection at X DPD falls in February, but increases degree in March.

• Collection at 30 DPD improves over the three months but Collection at

60 DPD falls continuously.

• Performance of 90 DPD is excellent in the month January, but then

falls.

• Collector of 120 DPD is only successful in colleting payment in

February.




0.00

5,000,000.00

10,000,000.00

15,000,000.00

20,000,000.00


DPD



Business Installment Loan

Month January

The performance of the Collectors of business installment loan is not satisfactory in the

month January. With the view to clarify this evaluation, the ratios of the collected amount to

the targeted amount are to be analyzed. The Collectors in the interim and X DPD show

relatively better performance and the Collector of the 90 DPD fails to collect the majority

portion of his targeted amount. The deviation from the targeted amount for the Collector of

90 DPD is BDT 4,156,244.50. On the other hand, the Collector of 120 DPD shows efficiency

in collecting payment from the 2 accounts out of his targeted 2 accounts. But his deviation

from the targeted collection is still high (BDT 469,073.35) which reduces his performance

ratio to 0.40474794.



Interim (Tk) = 10,343,261.42 / 15,361,403.28 = 0.673327901

X DPD (Tk) = 4,375,182.16 / 6,764,128.52 = 0.646821264

30 DPD (Tk) = 2,360,321.12 / 5,336,922.90 = 0.442262548

60 DPD (Tk) = 637,199.00 / 4,521,043.98 = 0.140940677

90 DPD (Tk) = 344,561.73 / 4,500,806.23 = 0.076555557

120 DPD (Tk) = 318,951.39 / 788,024.74 = 0.40474794




0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

Inter im X DPD 30 DPD 60 DPD 90 DPD 120 DPD


X DPD - 76%, 30 DPD –26%, 60 DPD -28%90 DPD –16%, 120 DPD –9%

0

50

100

150

200




According to the performance information of BIL maintained by the Collection Centre of

Standard Chartered Bank, in the month January the achievements of the DPDs are:

Month February

The month February is much better for the Collectors of interim and X DPD of BIL. More

clearly in this month, all the Collectors except the Collector dealing with 120 DPD improve

their performance. The comparison between the ratios of the month January and February

clarifies the improvement in performance properly. The Collector of 120 DPD collects

payment from 4 accounts out of 5 accounts though the performance ratio of the Collector

falls in the month. His deviation from the target is BDT 1,445,890.08. This deviation is much

higher than the deviation from target in the month January (deviation in the month January at

the 120 DPD is BDT 469,073.35). Besides, the performance ratios for both the 60 DPD and

90 DPD improve in this month. For the 60 DPD the performance ratio increases by 16% and

for 90 DPD the ratio improves by 25%.




0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

10,000,000.00


DPD


0

50

100

150






Interim (Tk) = 5,178,608.89 / 6,068,608.54 = 0.853343704

X DPD (Tk) = 5,793,677.99 / 7,886,233.29 = 0.73465719

30 DPD (Tk) = 2,234,623.31 / 3,373,749.09 = 0.662356106

60 DPD (Tk) = 1,268,785.53 / 4,137,251.14 = 0.306673559

90 DPD (Tk) = 821,197.10 / 2,517,918.54 = 0.32614125

120 DPD (Tk) = 508,899.68 / 1,954,789.76 = 0.260334738


According to the performance information of BIL maintained by the Collection Centre of

Standard Chartered Bank, in the month February the achievements of the DPDs are:

Month March




0

50

100

150


DPD




Similar to the performance in the month February, the Collectors of the interim and X DPD

show more efficiency in collection. The deviations from the targeted amount of collection in

these DPDs are BDT 1,180,171.52 for interim and BDT 1,342,226.1 for X DPD. But the

month is not favorable for the Collector of 90 DPD. At this DPD, the deviation is much

higher, that is BDT 297,660.32. As the part of this analysis, if the accounts condition is

analyzed, it is revealed that the Collector of 60 DPD shows more efficiency in collecting

payments from all the accounts except 2. Similarly, the Collector of 120 DPD leaves only 3

accounts as uncollected. Since that the performance ratios of these two Collectors are low

because of higher deviation form the targeted collection amount.



Interim (Tk) = 6,495,933.01 / 7,676,104.53 = 0.84625385

X DPD (Tk) = 6,937,466.97 / 8,279,692.47 = 0.83788945

30 DPD (Tk) = 2,210,153.89 / 4,134,500.07 = 0.534563757

60 DPD (Tk) = 808,853.80 / 2,346,424.46 = 0.34471759690 DPD (Tk) = 613,803.73 / 3,590,406.93 = 0.170956591

120 DPD (Tk) = 505,871.54 / 4,085,115.95 = 0.123832847

According to the performance information of business installment loan maintained by the

Collection Centre of Standard Chartered Bank, in the month March the achievements of the

DPDs are-




0.00

2,000,000.00

4,000,000.00

6,000,000.00

Interim X DPD 30 DPD 60 DPD


0%

20%

40%

60%

80%

100%





• Collection at interim and X DPD are relatively stable in the month

February and March

• Collection at 30 and 60 DPDs improve in February.

• Collection at 90 DPD improves remarkably in February, but declines in

March, but collection at 120 DPD declines over the month March.

Auto Loan

Month January

In the analysis of the performance of auto loan, the 120 DPD has not been considered as it

has already been informed that the provision bucket for this loan is 120 DPD. From the

graphical representation, it can be clarified that the Collector of X DPD shows excellent

performance in collection in the month January and almost 80% (approximately) of the target

is achieved in terms of the targeted amount. Besides, the Collector of 30 DPD is also

succeeded in fulfilling his 60% (approximately) targeted collection amount. On the other

hand, the Collectors of interim and 120 DPD fails to collect their desired level of amount

form the customers.




X DPD - 83%, 30 DPD –43%,60 DPD -44%

0

50

100

150

200

250




The Collector of 60 DPD shows efficiency in collecting payment form 12 accounts out of his

targeted 16 accounts. But because of the accounts that remain to be uncollected, the deviation

from the targeted amount becomes BDT 12,005,614.76; that is per account uncollected

amount is BDT 3,001,403.69. And per account collection is BDT 44,136.12333. Here, per

account deviation is BDT 2,957,267.567. Besides the collected amount condition, the account

condition of the interim is also not satisfactory as payment is collected only form 96 accounts

out of 202 accounts.



Interim (Tk) = 2,466,042.14 / 5,392,733.69 = 0.457289805

X DPD (Tk) = 4,540,131.06 / 5,459,906.24 = 0.831540115

30 DPD (Tk) = 1,868,865.95 / 2,934,107.93 = 0.636945196

60 DPD (Tk) = 529,633.48 / 1,735,248.24 = 0.305220583

90 DPD (Tk) = 613,803.73 / 3,590,406.93 = 0.170956591

120 DPD (Tk) = 505,871.54 / 4,085,115.95 = 0.123832847

According to the performance information of auto loan maintained by the Collection Centre

of Standard Chartered Bank, in the month January the achievements of the DPDs are-




0

50

100

150

200

250



0.00

2,000,000.00

4,000,000.00

6,000,000.00



Month February


The Collector of auto loan in the X DPD continues to show better performance in the month

February. At the same time, the Collector of interim improves the performance and achieved

61% of his targeted amount. But the performance ratio of the Collector of 90 DPD falls in the

month. From the perspective of accounts condition, the Collector of 60 DPD proves his

efficiency in collecting payments from 19 accounts out of his targeted 19 accounts. Still his

deviation from the targeted amount is BDT 1,131,923.45; that is the Collector fails to collect

the required amount of payment from the customers and each customer on an average

maintains a deviation of BDT 59574.91842.


Interim (Tk) = 2,542,656.43 / 4,187,611.57 = 0.607185358

X DPD (Tk) = 4,401,943.88 / 5,109,056.65 = 0.861596217

30 DPD (Tk) = 1,191,495.36 / 2,349,581.19 = 0.50710967860 DPD (Tk) = 996,728.32 / 2,128,651.77 = 0.468243953




X DPD - 86%, 30 DPD –51%,60 DPD -47%

0.00

2,000,000.00

4,000,000.00

6,000,000.00



0

50

100

150

200

250





of Standard Chartered Bank, in the month February the achievements of the DPDs are-

Month March


The overall performance of the Collectors in the month march for auto loan is improved. TheCollector of X DPD maintains better performance. Besides, the Collectors of interim, 60

DPD improve their performance and reduce the deviation from the targeted amount to be

collected from the customers. The Collector at the 30 DPD maintains stability in collection.

But he shows efficiency in terms of the number of accounts from is payment is collected. He

leaves only 8 accounts as uncollected condition. The Collector of 120 DPD is highly

successful in collecting payment from the 23 accounts out of his targeted 24 accounts.





X DPD - 87%, 30 DPD –51%, 60 DPD -52%

0%

20%

40%

60%

80%

100%


60 DPD 30 DPD X DPD Interim


Interim (Tk) = 2,991,850.83 / 4,626,595.08= 0.646663643

X DPD (Tk) = 5,015,528.63 / 5,751,966.29= 0.871967668

30 DPD (Tk) = 1,221,517.84 / 2,417,007.31= 0.505384421

60 DPD (Tk) = 1,183,894.70 / 2,292,137.66= 0.516502443


of Standard Chartered Bank, in the month March the achievements of the DPDs are:



• Collection at interim improves over the month February and March.

• Collection at X DPD also improves over the month February and March.

• Collection at 30 DPD declines in February and then remains stable.

• Collection at 60 DPD improves in the month February and March.

4.5 Regression Analysis: Recovery and Cost of Commission

The recovery team of the Collection Centre of Standard Chartered Bank is showing its

efficiency in collecting the required payments from the customers in the last several years.

The team has set up its target recovery for 2007. The target includes increasing recovery from

BDT 21.88 million to 43.00 million for credit cards and from BDT 35.6 million to BDT




Y = a + bX

Y = 511953.039 + 4.383 X

40.00 million for banking products. The team also emphasizes on the cost efficient recovery

in the year 2007. With the view to achieving this target, the SCB recovery team has identified

some challenges, which are:

• Political condition

• Extensive monitoring of portfolio and commission structure for the Members

• Better capacity management and requirements of recovery Members, etc.

As the recovery team plays a vital role in the collection performance of the Standard

Chartered Bank in Bangladesh, the determinants of the recovery are analyzed. Out of these

internal and external vital factors influencing the recovery performance, one factor-

commission cost is considered in the regression analysis performed for identifying its

significance on the amount of recovery. The analysis justified the sensitivity of the recovery

amounts to the factor.

With the view to identifying the relationship between the amount of recovery of the

Collection Centre and cost of commission, simple regression analysis was done considering

recovery as dependent variable and commission cost for recovery as independent variable. In

the report, it was assumed that the relationship between the variables was linear as:

(The calculation of the regression equation was shown in Appendix 4.6)

Where,

Y was the value of dependent variable recovery amount

a was the value of constant

X was the value of independent variable commission cost against recovery

b was the regression coefficients

Based on the data provided in Appendix 4.6, the values of the coefficient and constants were

calculated. The estimated regression model for the variables was:




Linear equation shows that if the cost of commission increases by BDT 1, then recovery

increases by BDT 4.383, which was logical. From the ANOVA table (shown in Appendix

4.6), it can be concluded that the results were statistically significant at the 1% level, as the

significance level indicated in the ANOVA table was 0.00 or 0%, which was less than 0.01 or

1% level.

As indicated by the t-statistics (from the Coefficients table shown in Appendix 4.6) it can be

concluded that b (commission cost coefficient) was statistically significant because it was

significant at 0.00 or 0% level which was less than 0.01 or 1% level.

The average recovery by the Standard Chartered Bank in Bangladesh for the period

January’06 to September’06 was BDT 1,288,045 and the average cost of commission of the

bank for the same time period was BDT 177,051. The standard deviation of the recovery for

the period was BDT 289,914 and that of cost of commission was BDT 65,523.

The Coefficient of Correlation between the recovery and commission cost of SCB was:

(The calculation was shown in Appendix 4.6)

The Coefficient of Correlation indicates that there was positive and high relationship between

the recovery of the bank in Bangladesh and its amount of commission cost (Appendix 4.6).

The strength of the relationship between the variables, measured by the coefficient of

determination (r 2) was 0.981 (Appendix 4.6). The value indicates significantly high

relationship. More clearly, 98.1% (Appendix 4.6) of the variation in recovery can beexplained by the variations in the commission cost incurred by the bank.

4.6 Trend Analysis of the Recovery from Credit Card

As the part of analyzing the performance of the recovery team of SCB, the trend analysis was

performed. The trend equation, already explained at the beginning of this chapter was

developed for the recovery pool of the recovery team for credit card which was:


Y’ = -13920680.56+ 13793377t

r = + 0.991



(The calculation of trend Equation is shown in the Appendix -4.7)

The equation indicates during 2000-01 to 2005-06 the recovery pool for

credit card increased at an average rate of BDT 13,793,377 per year. On

the basis of above equation, the recovery pool of SCB in Bangladesh for

the year 2006-07 was forecasted at BDT 82,632,958.43 and projected

recovery by the Collection Centre was BDT 12,394,943.76 (@15% of the

recovery pool set by the management policy).

The recovery projections of the Collection Centre of SCB are as follows:

• According to the banking record of SCB in Bangladesh, it is found that

projected recovery pool for credit card is BDT 87,340,306.00. It

maintains an excess of BDT 4,707,347.57 from the calculated

projection of BDT 82,632,958.43. The reason of this deviation reveals

form unexplained and secret management policy for recovery.

• The management predicts in the year 2007, the recovery rate for

credit card will be 15% considering presence of incremental logistic

supports and adopted special planning and strategy taken by the

bank’s management in 2007 and so the projected recovery was BDT

13,101,045.90 for recovery pool BDT 87,340,306.00. The recovery

projected by the management maintains an excess of BDT 706,102.14

from the calculated projection of recovery at BDT 12,394,943.76.

• The management was targeting 10% recovery of credit card payments

from the remaining pools.

•

Total non-paying account in 2006 was 1800 and paying account out of the non-paying account in 2006 was 19%. The average payment

collected from the paying account in 2006 was BDT 9,856.28. The

management assumes that the number of non-paying accounts and

the proportion of paying account form the non-paying accounts will be

reflected in the year 2007. So predicted paying accounts from non-

paying pool in 2007 was 342 and payment from these account was

BDT 3,370,484.43 (Appendix 4.7).




PL

18%

Flexi

33%

BIL

36%

Auto

13%

PL Flexi BIL Auto

Recovery Target for Banking Products

The main objectives of the recovery team in respect to the banking

products are increasing the average monthly recovery for PL and BIL and

following up the non-paying accounts separately. Recovery target for

banking products is as follows:

Product PL Flexi BIL AUTO

Yearly 8,700,000.00 15,950,000.00 17,400,000.00 6,525,000.00

Monthly 725,000.00 1,329,166.66 1,450,000.00 543,750.00

Table: 4.1; Source: Recovery Records of the Collection Centre

Fig 4.30: Recovery Target in 2007 for Banking Products

The figure reveals that the targeted recovery was highest for BIL and lowest for auto loan,

because the BIL accounts moving to 150 DPD was very high in terms of amount and the

performance of the Collectors of auto loans prevents the accounts’ movement to recovery.

4.7 NPV and Benefit - Cost Analysis

Project 1: Regular Recovery Investment

In the recovery management policy, the bank incurs costs in form of remuneration to the

Members of recovery team, transportation cost and other administrative activities. In the year

2005-06, the overall cost of recovery was BDT 6,000,000.00 against which the generated

recovery was BDT 60,000,000.00. The net benefit was BDT 54,000,000.00. The benefit-cost

ratio was 0.10 or 10%.




NPV = BDT 69,090,909.09Benefit-cost ratio = 9.4

NPV = BDT 2,727,272.72

Benefit-cost ratio = 6

The management proposes to incur total BDT 9,000,000.00 in the year 2007 for the regular

recovery team. The projected recovery that will be generated form this investment is

85,000,000.00. The time period for the project is 1 year. Discount rate proposed by the

management is 10%. The Appendix 4.8 shows the present value of the projected recovery at

10% discount rate was BDT 77,272,727.27 and that of recovery cost was BDT

8,181,818.182. The NPV and benefit-cost ratio of the project were:

As the NPV was positive and benefit-cost ratio was greater than 1 (one), investment for

recovery is acceptable. Based on the projection, growth rate of cost was 50% and that of

recovery was 41.67%. The growth rate of revenue income was 40.74%. Considering

discounted values of the recovery and cost, the growth rate of recovery was 28.79% and that

of cost was 36.36%.

Project 2: Agency Investment

The special recovery team deals only non-paying accounts. The team may hand over the non-

paying untraced accounts to agency for address collection purpose. In many cases, after

collecting addresses of the non-paying untraced accounts, recovery can be generated.

Management is expecting that 100 accounts per month out of the non-paying accounts will be

added to paying account pool through that initiative of collecting address by the agency.

Therefore, total 1200 accounts will be included in the paying pool in every year. Management

also predicts the cost that will be incurred for the address collection process is BDT 500.00

per account and total BDT 600,000.00. Per account predicted recovery is BDT 3000.00 and

total amount of recovery form the non-paying untraced accounts is BDT 3,600,000.00.

As the management is expected to generate recovery in the year 2007, the predicted amounts

were discounted for 1year in the Appendix 4.8. The discount rate was assumed at 10%.

Considering this, the present value of cost was BDT 545,454.55 and that of recovery was

BDT 3,272,727.27. The NPV and benefit-cost ratio were:




NPV = BDT 10,727.27Benefit-cost ratio = 12.73

As the NPV was positive and benefit-cost ratio was greater than 1 (one), investment for

agency is acceptable.

Project 3: Legal Investment

Accounts are monitored by the in-house team and external recovery agency to recover the full

outstanding as early as possible. This combination of efforts is retained for a certain period of

time after which the Unit goes for legal actions against non-paying accounts if it deemed to

be cost-effective. The effort ends upon recovering the amount through settlement or litigation

and finally writing off the account.

Thus, when the accounts’ condition moves to higher buckets and the collection of payment

becomes difficult, the Collection Unit takes legal action. In this segment, the application of

legal unit becomes necessary. Action plans for higher level performance from litigation

includes focusing on litigation as a tool of recovery, maintaining liaison with police stations

to implement the judgment of the court, arranging adequate resource to manage the legal

cases and finally maintaining liaison with Govt. agencies to implement the money suit

execution. All of these activities require adequate funds. In order to achieve the target of

collection and recovery in 2007, the management has developed a proposal for the legal unit.

Here, the benefit-cost analysis of the proposal was analyzed.

Management predicts cost of legal action will be BDT 1,100.00 and generated recovery will

be BDT 14,000.00. The trade-off is BDT 12,900.00. The benefit-cost ratio is 12.73. For the

purpose of calculating discounted amount, the discount rate was assumed at 10%. From

Appendix 4.8, it was found that the discounted value of legal cost at 10% rate for 1 year was

BDT 1000.00. The discounted value for recovery was BDT 11,727.27. The NPV and benefit –cost ratio were:

As the NPV is positive and benefit-cost ratio is greater than 1 (one), investment for agency is

acceptable.

4.9 Capacity Planning in the Collection Centre




As per management policy, the Collection Centre of Standard Chartered Bank develops

capacity plan. This is the plan that assists to manage collection resources according to

business strategy, ensure optimum utilization of resource and finally enable recruitment in

advance. A capacity plan for collections is in place based on the forecasted collection flow

rates and number and volume of accounts. The plan has been developed by taking

consideration of call intensity per account by a Collector with the availability of the existing

logistic support like telephone lines, PCs and others.

The capacity plan for personal loan for the month March, 2007 was

prepared by using the data of the month January and February (Appendix

-4.9) following the steps sequentially included below:

• The figures for the number of accounts and amount for the accounts in

each bucket were given by the management. The number of required

calls for each account was determined based on the months January

and February.

• Total number of required calls was determined by multiplying the

number of required calls per account and the number of accounts.

• Calls per day of a Collector were determined based on the data of

January and February.

• The number of days for the month March was collected from the

management.

• Total call capacity was determined by multiplying the number of days

and calls per Collector per day.

• Required number of Collectors is determined by dividing the total calls

required by total call capacity. Actual capacity was determined based

on the data of January and February.

• Gap between the required number of Collectors and actual number of

Collectors was determined.

Thus the management estimates Collector requirement based on the

number of working days in the month, factoring in capacity loss due to

planned and unplanned leave, training and staff turn-over. The capacity

plan prepared for the month March revealed that 2 (Two) additional

Collectors are required for the personal loan team.




Findings of the Study

After Liberation War in Bangladesh, the leading multinational bank – Standard Chartered

Bank created an example by assisting to open first LC for Bangladesh. After 36 (thirty six)years, the bank has created another example by separating its Collection Division form

ordinary banking activities. This chapter represents the major findings of the study as the

output of practical experience of working in the Collection Centre and statistical analysis of

the collected information while analyzing the overall activities of the Collection Centre:

• The major manpower of the Collection Centre is the Collectors. In the beginning of the

month they are assigned accounts based on the buckets that they deal. In case of the deathof any account holders, the account is deducted form their lists. They are given one month

time for collecting due amount form the assigned accounts.

• Collectors serve as mainly Tale-Collectors. While conversation with customers, they are

to ensure that the collection module is up to date, prohibiting any accounts to flow

through from one bucket to another without action and are also responsive to Customer

Service Staffs. The collection strategies, applied by them vary depending on the conditionof the accounts, number of unpaid installments, and customer priority ratings. Some

strategies are mandated and some are specific for secured products, like – auto loan, flexi

loan, etc.

• The Centre has its own cost management policy. The management of the Centre is

responsible for reducing delinquency rate at the minimum costs. Management is also

conscious of database management system and security of the system. The cheques being

dishonored from the banks come to the Collection Centre which are again placed by the

Collectors after the negotiation with the customers. The store management of cheques is

also a critical issue for the Collection Centre.

• The Collectors are shifted from one team to another team based on their performance.

Collectors’ performance that depends on KPI, hourly productivity and punctuality. The

Collectors are contractual employees. Their remuneration varies based on their

performance. Besides, the management offers commissions and awards for the Collectors




and Team Leaders based on their performance, which motivate to improve their

performance.

•

Different types of workshops and training are arranged for the Members of the CollectionCentre for improving their efficiency in making calls, handling customer resistance, etc.

They are also trained on the security system – SAFE (Security Awareness for Employees)

and also on money laundering prevention. They are to attend online exams on these.

Attaining 80% marks in the exams ensure certificates for them.

• The Centre recruits external agencies for the collection purposes. The agency may be

involved in any stage of the accounts. When the Collectors fail to collect payment, they

may exercise the opportunity to collect payment through agencies. The legal unit deals

with legal activities when the loans are classified and moves to legal action.

• The Centre uses customized softwares that assist the Members of the Collection Centre in

keeping track of customers’ dealings, their contract numbers, payment condition,

evaluating the Collectors performance and customer dealing quality. It uses Client server

architecture and provides well furnished infrastructure for its Members.

• Though the management of the Centre arranges different types of remuneration for the

Members to retain them, the switching tendency among the Members of the Collection is

still high. The main reasons of their dissatisfaction are Collectors are not employed

directly by the HR of the bank. They are to attend office on Saturday. The pressure of

work at the end of the month and strict leaving rules also dissatisfy them.

• The collection performance of the bank based on its last five years experience proves that

the overall collection grows positively. Besides, the growth rate and acceleration rate of

the collection of SCB in the last five years shows efficiency of the bank in collection. The

management is going to make investment in some projects that will add value to the

Centre.

• Management predicts 15% recovery form credit card collection pool. The highest

proportion of the recovery target in 2007 for banking products (BP) includes BIL and the




lowest portion complies with auto loan. Collectors at the higher buckets in some cases are

succeeded in regularizing accounts, but the performance is not good in terms of collected

amount.

• The major determinants of the collection cost are number of Collectors and costs incurred

for secured and unsecured products. The number of Collector and cost of unsecured

products reduce the total collection costs. Amount of recovery is positively related to

commission cost and maintains high degree of positive relationship.

• The management in every month develops capacity plan to analyze the requirements of

new members for the Centre. It assists the management to continue its collection flow

properly; whereas if the gap of the required Members are identified, it will hamper the

work flow of the Centre, again excess employees will result in excess cost for it. A

capacity plan developed for personal loan in month March, 2007 reveals the need for

requirement of 2 new Members.

The major findings highlighted above disclose the efficiency of the management in selecting

projects, setting goals and strategies, managing manpower, arranging training and

remuneration which ultimately contribute to the bank’s achievement of goals and maintaining

the flow of funds. But an alarming issue for the management is switching tendency among

the Collection Members. Image, salary structure can attract the collectors to it, but can’t

retain them. In order to keep pace with the competitive banking world, the Collection Centre

needs to emphasize on the issue – ‘Retention of its experienced and efficient Members’,

which will add speed to its success of collection and recovery and facilitate in meeting future

challenges and finally will create an opportunity for the bank to progress well in collection of

disbursed loans.




Conclusion

Banking sector is considered as the barometer of economic condition of any country. It has

significant contribution towards the economic development of the country. The banking

sector of Bangladesh provides an interesting study regarding the effect of various company

specific and macroeconomic variables on the loan disbursement, default and recovery of

loans. The issue of loan default, recovery and banking sector performance in Bangladesh

continues to be a perennial source of discussion among academicians, policy makers and

practitioners.

The foreign banks including Standard Chartered Bank, operating in Bangladesh show better

efficiency in overcoming the serious problem-loan default that arises from the loan

disbursements which is the main banking activity. An Integrated Inter-Bank Electronic

Transaction System (IIBETS) maintained by the foreign banks assists in this case. Because,

the Integrated Inter-Bank Electronic Transaction System is designed whereby all revenue

generated by defaulting companies and default customers would end up in a particular loan

accounts while withdrawal of funds from any other operating accounts of the companies or customers will be automatically prevented, unless and until the designated amount have been

deposited in the respective loan accounts.

The SCB’s credit approval moves through clear and sequential phases. Still, some accounts

become delinquents in every month as the borrowers fail to pay regularly. In order to

accelerate the bank’s performance, the bank has successfully developed a separated

Collection Unit with a small manpower where people’s main duty is to collect the payments

form the customers. The technology of the SCB Collection Centre assists the bank in a long

way to undermine the default culture among its clients.

The previous discussion reveals that the Collection Center of the Standard Chartered Bank is

highly dependent on its MIS. Collection MIS is the key to collection productivity monitoring,

collection strategy setting and daily collection management and serves as collection

productivity indicators by product, by functional area and by Collectors. It assists in

monitoring calls per hour, contact rates and promise taken to contact ratio. Based on that,




kept promise ratio and success rate are determined. Collection MIS plays a vital role in

collection inventory tracking and monitoring as well as comparing current payment flow with

the past payment flow. The trends, over limit and delinquent account trend of the customer

who due their first installment (FID customers) is also determined by MIS.

Technology is faceless and no amount of lobbying can influence the outcome of the software

program designed to assist collection activities. Through calls, sms and visit, the

communication with the customers is maintained. This change in the banking sector is

showing the bright future of reducing the non performing loans (NPL) and setting examples

for the other banks which have not still separated Collection Division and thus leading the

battle – ‘Developing loan default free culture in Bangladesh’.

Conclusion

Banking sector is considered as the barometer of economic condition of any country. It has

significant contribution towards the economic development of the country. The banking

sector of Bangladesh provides an interesting study regarding the effect of various company

specific and macroeconomic variables on the loan disbursement, default and recovery of

loans. The issue of loan default, recovery and banking sector performance in Bangladesh




continues to be a perennial source of discussion among academicians, policy makers and

practitioners.

The foreign banks including Standard Chartered Bank, operating in Bangladesh show better

efficiency in overcoming the serious problem-loan default that arises from the loan

disbursements which is the main banking activity. An Integrated Inter-Bank Electronic

Transaction System (IIBETS) maintained by the foreign banks assists in this case. Because,

the Integrated Inter-Bank Electronic Transaction System is designed whereby all revenue

generated by defaulting companies and default customers would end up in a particular loan

accounts while withdrawal of funds from any other operating accounts of the companies or

customers will be automatically prevented, unless and until the designated amount have been

deposited in the respective loan accounts.

The SCB’s credit approval moves through clear and sequential phases. Still, some accounts

become delinquents in every month as the borrowers fail to pay regularly. In order to

accelerate the bank’s performance, the bank has successfully developed a separated

Collection Unit with a small manpower where people’s main duty is to collect the payments

form the customers. The technology of the SCB Collection Centre assists the bank in a long

way to undermine the default culture among its clients.

The previous discussion reveals that the Collection Center of the Standard Chartered Bank is

highly dependent on its MIS. Collection MIS is the key to collection productivity monitoring,

collection strategy setting and daily collection management and serves as collection

productivity indicators by product, by functional area and by Collectors. It assists in

monitoring calls per hour, contact rates and promise taken to contact ratio. Based on that,

kept promise ratio and success rate are determined. Collection MIS plays a vital role in

collection inventory tracking and monitoring as well as comparing current payment flow with

the past payment flow. The trends, over limit and delinquent account trend of the customer

who due their first installment (FID customers) is also determined by MIS.

Technology is faceless and no amount of lobbying can influence the outcome of the software

program designed to assist collection activities. Through calls, sms and visit, the

communication with the customers is maintained. This change in the banking sector is

showing the bright future of reducing the non performing loans (NPL) and setting examples




for the other banks which have not still separated Collection Division and thus leading the

battle – ‘Developing loan default free culture in Bangladesh’.

• Amandeep, (1993), “Profit and Profitability in Commercial Banks”. New Delhi: Deep &

Deep Publication

• Siddique, S. R and Islam, A.F.M.M, “Banking Sector in Bangladesh: Its Contribution and

Performance”, Journal of Business Research, Vol. 3, 2001. Dhaka, Bangladesh




• Bhattacharjee, Durgadas and Islam, Seraul, “Profit and Profitability of NCBs in

Bangladesh: An analysis of the dynamics and causal relation”, Vol. XIV No. 1&2

• Ross, Westerfield and Jordan, (2005-2006), “Fundamentals of Corporate Finance”, Tata

McGraw – Hill

• Thompson, Arthur A. Jr, Strickland, “Strategic Management: Concepts and Cases”, 13 th

edition, New Delhi: Tata McGraw-Hill Publishing Company Limited, 2003

• Gupta and Gupta, “Business Statistics”, 12th edition, New Delhi: Sultan Chand and Sons,

2003-04

• Sarker, L.R, “Credit Risk Management in Banking”, New Delhi : United Publication

• Terry, G.R and Franklin, S.G, “Principles of Management, 8 th edition, 1994

• Berger, Allen N., “The Relationship Between Capital and Earnings in Banking, Journal of

Money, Credit and Banking”, 1995

• Desai, 1980; V.R.M Desai: “Monitoring and Review of Performance Budgeting System”;

Prajanan, Vol. XXVII No. 9; India

• Kothari, C.R, “Research Methodology, Methods and Techniques”, 2nd edition, Wishwa

Prakashan, New Delhi, India

• Laudon and Laudon, “Management Information System”, 8 th edition, Prince Hall,India

• Bangladesh Bank, Economic Trends, Dhaka, December, 2006

• Daily Prothom Alo, Daily Star, The Economists, Bangladesh Observer

• www.standardchartered.com

3.1 Model Questions (Source: Customer Service Advisors)

The different types of questions made by the Collectors to the customers are:

• How does this solution sound to you?

• Do you understand what the derogatory information on your credit bureau will do to your

refinancing opportunities?


http://www.standardchartered.com/

http://www.standardchartered.com/



• Are there any reasons you know now about why you might not be able to keep this

arrangement?

• I know these are hard times, did you suffer a loss of income and that’s why you are

unable to bring the account current today?• We agree that the payment plan meets your requirements and that your first payment is

due in next day. This will resolve this situation in the short term. What about next

month’s payment?

• Please correct me if I am wrong, but are you saying you are willing to let this account go

to a collection agency and have that information reported to the credit bureau? Do you

understand that the negative rating will stay on your credit report for seven years?

3.2 Customers Queries (Source: Customer Service Advisors)

In the collection process, the following queries of the customers are to be faced by the

Collectors:

• The customers may call to the Collection Centre of Standard Chartered Bank to update

his/her new address and contact numbers in the database if he/she changes address or

contract numbers.

• When cardholders don’t make payment, their credit cards are blocked. Cardholders, at

that situation call or make physical visit to the Collection Unit to unblock the cards after

making payment.

• Sometimes cardholders call to know whether their card is activated or not. It is very

common that the customers call to know the current balance about his credit card account

or loan account.

• They also call for card cancellation which is very rare and the cardholders only call to

cancel the credit card due to some problems or dissatisfaction. Sometimes, customers call

to know how to close their loans.

• The customers who use credit cards punching machine to provide the credit card

payments or loan payments, sometimes face problems regarding their payment and ATM

(Automated Teller Machine). For this reason they make queries. Besides, sometimes they

face some problems, like - magnetic stripe problem, wrong name embossed in the card

and other problems, and that is why they sometimes take the online service.

• The cardholders can withdraw cash from the ATM machine by using the PIN number. But

sometimes they withdraw cash from the branch and at that time the branch people call to




the Collection Department for the authorization code for the valid cash transaction, like

-shops.

• From the beginning SCB bank has been using its personal courier service for the better

and quick delivery of its necessary documents. Due to some reasons, sometimes the

customers do not get the documents regarding the credit card. Then they call to the

Collection Centre to know how to get the document

3.3 Steps Followed for Consumer Products (Source: Customer Service Advisors)

Personal Loan (PL), Flexi Loan (FL) and Business Installment Loan (BIL)

No Days Past

Due

Collection Steps Delinquency/

Provision

X DPD (0 – 29)Telephone calls and Dunning letters

Delinquent

30DPD (30 – 59) Telephone calls and Remainder letters Delinquent

60DPD (60 – 89) Telephone calls, Remainder letters, visit customers,use of agency, letters to Guarantor (if any) to informthe obligation of payment

Delinquent

90DPD (90 – 119)

Telephone calls, final remainder, visit customer, useof agency, interest suspended, legal notice

Delinquent /Interest to be

suspended

120DPD (120 –

149)

Telephone calls, visit customers, report to Credit

Information Bureau (CIB) and other financialinstitution, legal action, undated cheques (UDC)

placing for flexi and BIL

Delinquent / Non

performing for Flexi and BIL

150DPD (150 +) 100% provision, handling accounts to agency,undated cheque (UDC) placing and legal action for PL, forced sale of item financed for flexi and BIL

100% charge off, Non Performing

Loans

Here forced sale is the sale by the way of convincing customers, not by attachment obtained by the court.

Auto Loan (AL)

No Days Past

Due

Collection Steps Delinquency/Provision

X DPD (0 – 29) Telephone calls and Dunning letters Delinquent

30DPD (30 – 59)

Telephone calls, Dunning letters, physical visit Delinquent

60DPD (60 – 89)

Telephone calls, Facility call up letters, legalnotice

Delinquent

90DPD (90 – 119)

Repossession activities and commence Delinquent, 50% provision




120DPD (120 – 149)

Repossession activities continue Delinquent, 50% provision

150DPD (150 -179)

Repossession activities continue Delinquent, 50% provision

180 Litigation 100% provision

Mortgage Loan

No Days Past

Due


X DPD (0 – 29) Telephone calls and Dunning letters Delinquent

30DPD (30 – 59)

Telephone calls, Dunning letters Delinquent

60DPD (60 – 89)

Telephone calls, Facility call up letters, physicalvisit

Delinquent

90DPD (90 – 119)

Foreclosure activities commence Delinquent

120DPD (120 – 149)

Foreclosure activities continue Delinquent,50% provision

150DPD (150 -179)

Repossession activities continue/ litigation Delinquent, 100% provision

Credit CardNo Days Past

Due


X DPD (0 – 29)

Telephone calls, Dunning letters, block cards Delinquent/Temporary block

30DPD (30 – 59)

Telephone calls, Remainder letters, block cards Delinquent/Temporary block

60DPD (60 – 89)

Telephone calls, Remainder letters, visit customers, block cards

Delinquent/Temporary block

90DPD (90 – 119)

Telephone calls, Remainder letters , visit customer,use of agency/recovery, interest suspended, legal

notice, Hot list and circular within merchants

Delinquent/Interestsuspended/Permanent

block 120DPD (120

– 149)Telephone calls, visit customers, final remainder,seeking assistance from employer, legal action

Delinquent/Permanent block

150DPD (150+)

100% provision, handling accounts to agency, 100% charge off

Appendix 4.1: Operational Definition of Some Variables and Tools

Variables And

Tools

Operational Definition

Trend The Trend is the long-run direction of the time series.




CorrelationCoefficient

The coefficient of correlation measures the strength of the linear

associated between two variables.

Growth Rate Growth rate indicates the changes in the level of the variables over

the period of time in relevant termAcceleration Rate Acceleration rate is the average growth rate of the growth rates. It

indicates the future trend of the growth rate.

Benefit-Cost Ratio The present value of an investment’s future cash flows divided by

its initial cost is known as Benefit-Cost Ratio.

Net Present Value Net present value (NPV) is the difference between an investment’s

market value and its cost.

Appendix 4.2: Calculation of Trend Equation of Collection from Customers

YEAR COLLECTION (Y)(MILLION)

2001-02 612

2002-03 587

2003-04 798

2004-05 786

2005-06 952

Source: Intranet of Standard Chartered Bank

Regression Output: TrendRegression Statistics

Multiple R 0.926691518

R Square 0.858757169

Adjusted RSquare 0.811676225

Standard Error 65.0843043

Observations 5

ANOVA

df SS MS FSignificance

F

Regression 1 77264.1 77264.1 18.240 0.0235

Residual 3 12707.9 4235.966

Total 4 89972

CoefficientStandard

Error t StatP-

valueLower 95%

Upper 95%

Lower 95%

Upper 95.0%

Intercept 483.3 68.26 7.08 0.005 266.06 700.53 266.06 700.53X Variable1 87.9 20.58 4.27 0.023 22.40 153.39 22.40 153.39




Appendix 4.3: Calculation of Growth Rate of Collection from Customers

YEAR COLLECTION (Y)(MILLION)

GROWTH RATE(G)

2001-02 6122002-03 587 -0.04085

2003-04 798 0.359455

2004-05 786 -0.01504

2005-06 952 0.211196

Source: Intranet of Standard Chartered Bank

The equation of per year Growth rate is – Growth rate (G) = (Yn - Yn-1)/Yn-1

The results from the table-G1 = -4.085%G2 = 35.9455%G3 = -1.504%G4 = 21.1196%

The equation of average Growth rate is -

( ) 1001Y

Yn'GrateGrowth 1n

1

×

−

= −

Here, ( ) ( ) 1001612

952'GrateGrowth 15

1

5 ×

−= −

= 11.678965%

The equation for Acceleration Rate is –




Acceleration rate (A) = 1001

Y

Y

Y

Y

2n

1

2

1n

n

×

−

− −

= 1001

612

68625

1

587

4

952

2

5

×

−

−

= 8.087608453 %

Appendix 4.4: Calculation of the Determinants of Collection Cost

MonthAmount inthousand

Totalcost

Total costof

unsecuredproducts

Totalcost of securedproducts

Number of Collectors

July ‘06 73.6 64.1 3.3 69

August ‘06 73.6 67.4 3.4 70

September ‘06 73.6 69.0 3.6 70

October ‘06 73.6 69.0 3.7 70November ‘06 75.0 62.4 3.3 70

December ‘06 83.0 51.0 2.7 70

January ‘07 58.0 55.1 2.9 90

February ‘07 58.0 55.1 2.9 90

Source: Management Documents of the Collection Centre

Descriptive Statistics

Mean Std. Deviation N

Cost in amount 71.050 8.66 8

Unsecured in amount 61.637 7.039 8secured in amount 3.225 .357 8

collectors in number 74.875 9.341 8

Correlations

cost inamount

unsecured inamount

secured inamount

collectorsin number

PearsonCorrelation

cost in amount1.000 .246 .245 -.926

unsecured in amount .246 1.000 .184 -.173

secured in amount .245 .184 1.000 -.159

collectors in number -.926 -.173 -.159 1.000Sig. (1- cost in amount . .278 .279 .000




tailed)

unsecured in amount .278 . .000 .069

secured in amount .279 .000 . .075

collectors in number .000 .069 .075 .

N cost in amount 8 8 8 8

unsecured in amount 8 8 8 8secured in amount 8 8 8 8

collectors in number 8 8 8 8

Variables Entered/Removed

ModelVariablesEntered

VariablesRemoved Method

1 collectors innumber,secured inamount,unsecuredinamount(a)

. Enter

a. All requested variables entered.b. Dependent Variable: cost in amount

Model Summary

Model R R Square Adjusted R

SquareStd. Error of the Estimate

1 .991(a) .981 .967 1.563

a. Predictors: (Constant), collectors in number, secured in amount, unsecured in amount

ANOVA

ModelSum of Squares df Mean Square F Sig.

1 Regression 515.237 3 171.746 70.223 .001(a)

Residual 9.783 4 2.446

Total 525.020 7

a. Predictors: (Constant), collectors in number, secured in amount, unsecured in amountb. Dependent Variable: cost in amount

Coefficients

Model

UnstandardizedCoefficients

StandardizedCoefficients

t Sig.B Std. Error Beta

1 (Constant)183.707 10.796 17.016 .000unsecured in

amount-.864 .481 -.702 -1.796 .047




secured inamount

6.795 9.353 .281 .727 .008

collectors innumber

-1.086 .077 -1.172 -14.057 .000

a. Dependent Variable: cost in amount

Appendix 4.5: Collection of Different Banking Products in the Month January,

February and March, 07

Personal Loan

Month January

CATEGORY ACTUALTARGET

(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET

(NUMBER OF ACCOUNTS)

ACHIEVEMENT(NUMBER OF ACCOUNTS)

INTERIM 7,707,107.50 6,175,346.17 844 724

X DPD 3,743,984.79 2,826,134.96 440 376

30 DPD 3,114,935.28 1,567,853.53 183 139

60 DPD 2,305,543.59 930,968.14 87 71

90 DPD 345,853.47 127,839.60 12 8120 DPD 1,021,762.52 250,203.84 28 17

Month February


(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET



INTERIM 5,578,062.08 4,818,193.56 623 528

X DPD 4,521,208.25 3,537,868.60 492 415

30 DPD 1325923.45 1351049.44 167 13260 DPD 2,169,534.50 1,081,156.41 87 77

90 DPD 851,538.01 226,512.53 26 18

120 DPD 259,510.06 55,500.06 8 5

Month March


(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET



INTERIM 5,606,202.98 4,341,571.32 553 458

X DPD 5,663,546.37 4,615,456.25 598 539

30 DPD 3,767,130.80 2,127,245.56 217 177




60 DPD 2,305,156.73 1,090,690.54 99 82

90 DPD 812,002.76 273,845.26 23 17

120 DPD 486,474.00 113,050.73 14 9

Source: Top Sheet (Performance Sheet) of the Collectors of Standard Chartered Bank

Flexi Loan

Month January

CATEGORY ACTUAL

TARGET(AMOUNT)

ACHIEVEMENT

(AMOUNT)

ACTUAL

TARGET(NUMBER OF ACCOUNTS)

ACHIEVEMENT


INTERIM 8,485,570.24 7,319,563.39 252 207

X DPD 5,663,473.22 4,937,697.14 199 170

30 DPD 1,972,038.42 1,347,672.69 51 42

60 DPD 1,346,391.82 824,232.27 22 15

90 DPD 555,443.23 824,232.27 9 5

120 DPD 65,559.78 0 1 0

Month FebruaryCATEGORY ACTUAL

TARGET(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET



INTERIM 7,846,321.30 6,466,861.99 204 170

X DPD 4,950,411.49 4,130,482.55 198 182

30 DPD 2,566,903.97 1764025.36 43 33

60 DPD 555,756.92 292,519.29 13 11

90 DPD 626,878.80 336,910.25 11 6

120 DPD 318,336.99 132,816.04 3 2

Month March


(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET



INTERIM 6,836,669.68 5,420,101.10 195 163

X DPD 5,422,214.28 5,021,686.78 212 194

30 DPD 2,662,774.92 1,956,013.71 50 45

60 DPD 1,090,645.78 565,780.72 17 14

90 DPD 145,076.49 69,396.00 3 3

120 DPD 193,665.68 0.00 2 0





Businesses Installment Loan

Month January

CATEGORY ACTUAL

TARGET(AMOUNT)

ACHIEVEMENT

(AMOUNT)

ACTUAL

TARGET(NUMBER OF ACCOUNTS)

ACHIEVEMENT


INTERIM 15,361,403.28 10,343,261.42 179 120

X DPD 6,764,128.52 4,375,182.16 85 60

30 DPD 5,336,922.90 2,360,321.12 40 27

60 DPD 4,521,043.98 637,199.00 20 10

90 DPD 4,500,806.23 344,561.73 13 5

120 DPD 788,024.74 318,951.39 2 2

Month FebruaryCATEGORY ACTUAL

TARGET(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET



INTERIM 6,068,608.54 5,178,608.89 68 57

X DPD 7,886,233.29 5,793,677.99 105 81

30 DPD 3,373,749.09 2,234,623.31 30 24

60 DPD 4,137,251.14 1,268,785.53 20 15

90 DPD 2,517,918.54 821,197.10 7 5

120 DPD 1,954,789.76 508,899.68 5 4

Month March


(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET



INTERIM 7,676,104.53 6,495,933.01 82 70

X DPD 8,279,692.47 6,937,466.97 125 114

30 DPD 4,134,500.07 2,210,153.89 37 27

60 DPD 2,346,424.46 808,853.80 15 13

90 DPD 3,590,406.93 613,803.73 12 6

120 DPD 4,085,115.95 505,871.54 9 6





Auto Loan

Month January


(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET


ACHIEVEMENT(NUMBER OF

ACCOUNTS)

INTERIM 5,392,733.69 2,466,042.14 202 96

X DPD 5,459,906.24 4,540,131.06 196 171

30 DPD 2,934,107.93 1,868,865.95 49 42

60 DPD 1,735,248.24 529,633.48 16 12

Month February


(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET


ACHIEVEMENT(NUMBER OF

ACCOUNTS)

INTERIM 4,187,611.57 2,542,656.43 152 96

X DPD 5,109,056.65 4,401,943.88 193 173

30 DPD 2,349,581.19 1,191,495.36 50 37

60 DPD 2,128,651.77 996,728.32 19 19

Month March


(AMOUNT)

ACHIEVEMENT(AMOUNT)

ACTUALTARGET

(NUMBER OF

ACCOUNTS)


INTERIM 4,626,595.08 2,991,850.83 169 117

X DPD 5,751,966.29 5,015,528.63 226 210

30 DPD 2,417,007.31 1,221,517.84 50 42

60 DPD 2,292,137.66 1,183,894.70 24 23





Appendix 4.6: Calculation of the Regression between Recovery and Cost Commission

Month Total Recovery Totalcommission

September ‘06 769,117.23 67,398.79

August ‘06 1,256,498.00 170,626.77July '06 1,529,992.05 244,798.73

June '06 1,807,810.70 289,249.71

May ‘06 1,410,174.73 195,298.56

April '06 1,211,422.00 163,650.57

March '06 1,311,755.55 187,028.66

February '06 1,227,675.27 164,126.38

January '06 1,067,965.64 111,287.79

Source: Recovery Records of Standard Chartered Bank

Descriptive Statistics

Mean Std. Deviation N

recovery in amount 1288045.6855556

289914.72363 9

commission in amount 177051.77 65523.971289 9

Correlations

recovery in

amountcommission in

amount

Pearson Correlation recovery in amount 1.000 .991

commission in amount .991 1.000

Sig. (1-tailed) recovery in amount . .000

commission in amount .000 .

N recovery in amount 9 9

commission in amount 9 9

Variables Entered/Removed

ModelVariablesEntered

VariablesRemoved Method




1commission

in amount. Enter

a. All requested variables entered.b. Dependent Variable: recovery in amount

Model Summary

Model R R Square Adjusted R

SquareStd. Error of the Estimate

1 .991(a) .981 .979 42165.20414

a. Predictors: (Constant), commission in amount

ANOVA

Model Sum of Squares df Mean Square F Sig.

1 Regression

659959044754.10 165995904475

4.104371.201 .000(a)

Residual 12445331086.489 7 1777904440.927

Total 672404375840.59 8

a Predictors: (Constant), commission in amountb Dependent Variable: recovery in amount

Coefficients

ModelUnstandardized

CoefficientsStandardizedCoefficients t Sig.

B Std. Error Beta

1 (Constant)511953.039 42663.467 12.000 .000

commissionin amount

4.383 .228 .991 19.267 .000

a. Dependent Variable: recovery in amount




Appendix 4.7: Calculation of Trend Equation Recovery in Credit Card

YEAR RECOVERY

POOL(Y)

T RECOVERY

RATE

PROBABLE

RECOVERY(BDT)

2000-01 2,876,192.98 1 17.47% 513,847.23

2001-02 10,969,216.46 2 4.01% 439,402.25

2002-03 20,279,518.66 3 7.38% 1,496,723.80

2003-04 58,477,224.91 4 10% 5,847,722.50

2004-05 37,907,149.99 5 10% 3,790,714.90

2005-06 75,627,530.60 6 10% 7,562,753.00

Total 206,136,833.60 21

2006-07 87,340,306.00 15% 13,101,045.90

Recovery bySpecialTeam

6,380,848.43

Total 39,133,058.00

Source: Recovery Records of Standard Chartered Bank

Summary Output: Trend

Regression Statistics

Multiple R 0.908510028

R Square 0.82539047

Adjusted R Square 0.781738088

Standard Error 13269784.84

Observations 6

ANOVA

df SS MS FSignificance

F

Regression 1 3.33E+15 3.33E+15 18.90826 0.012172718

Residual 4 7.04E+14 1.76E+14

Total 5 4.03E+15

Coefficients StandardError tStat P-value Lower 95% Upper 95% Lower 95.0% Upper 95%

Intercept-

13920680.56 12353497 -1.12 0.3228

-4821948

7.922037812

7

-4.8E+0

7203781

27

XVariable1 13793377 3172085 4.34 0.0121

4986256.305

22600498

4986256

22600498




Recovery Amount

Non-paying account in 2006 = 1800

Proportion of paying account form the non-paying account in 2006 = 19%

Paying account form the non-paying account = 1800 x 0.19 = 342 accounts

In 2007, predicted non-paying account = 1800

Predicted paying account out of these non-paying accounts = 0.19 x 1800 = 342

Now, total paying account in 2006 = 720,

Total payment in 2006 = 7096523

Average payment = 7096523 / 720 = 9856.28.

Management assumes the average payment out of non paying account in 2006 will be

reflected in 2007. So predicted average payment in 2007 is 9856.28.

So projected recovery from the non-paying accounts = Predicted average payment x

Predicted paying account out of non paying accounts = 9855.22 x 342 = 3370484. 43

Total recovery from non paying and special team = 3,010,000.00 (assumed by management)

+ 3,370,848.43 (payment form non –paying account) = 6380848.43




Appendix 4.8: Calculation of NPV and Benefit-Cost Ratio

Project 1: Regular Recovery InvestmentANALYSIS 2006 2007

(PROJECTED)

INCREASE PRESENT

VALUE

Cost 6,000,000.00 9,000,000.00 3,000,000.00 /

50%

8,181,818.18

Recovery 60,000,000.00 85,000,000.00 30,000,000.00/41.

67%

77,272,727.27

Revenue

income

54,000,000.00 76,000,000.00 22,000,000.00 NPV =

69,090,909.09

Cost/taka

recovery

0.10 0.10 Benefit-cost

ratio = 9.4

Source: Recovery Records of the Collection Centre

Project 2: Agency InvestmentANALYSIS PER

ACCOUNT

TOTAL

(PROJECTED)

PER AMOUNT X

1200

PRESENT VALUE

Cost 500.00 6,00,000.00 5,454,54.54

Recovery 3,000.00 3,600,000.00 3,272,727.27

Revenue

income

2500.00 3,000,000.00 NPV = 2727272.73

Cost/takarecovery

6 6 Benefit-cost ratio = 6


Project 3: Legal InvestmentANALYSIS TOTAL

(PROJECTED)

PRESENT VALUE

Cost 1,100.00 1000.00

Recovery 14,000.00 12,727.27

Revenue

income

12,900.00 NPV = 11727.27

Cost/taka

recovery

12.73 Benefit-cost ratio =

12.73


4.9 Capacity Planning for Month March

7-Jan 7-Feb 7-Mar

Accounts in amount $X DPD 358,470 347,006 384,866




30 DPD 75,169 97,065 98,716

60 DPD 37,422 28,058 41,810

90 DPD 10,695 12,604 20,516

120 DPD 9,053 7,708 13,669

Account in number X DPD 1,204 1,399 1,564

30 DPD 364 521 450

60 DPD 151 143 179

90 DPD 42 60 77

120 DPD 47 27 70

No. of calls required per account in month

X DPD 3 3 3

30 DPD 4 4 4

60 DPD 5 5 5

90 DPD 6 6 6

120 DPD 7 7 7

Total Calls required (number of calls required per account x number of accounts)

X DPD 3612 4197 4691.545

30 DPD 1456 2084 1799.842

60 DPD 755 715 894.7113

90 DPD 252 360 459.6481

120 DPD 329 189 490.6507

Calls per Collector/day

X DPD 60 60 60

30 DPD 38 38 38

60 DPD 27 27 27

90 DPD 15 15 15

120 DPD 15 15 15

No. of Days 21 18 21

Total Call Capacity(calls per Collector per day x no of days)

X DPD 1260 1080 1260

30 DPD 798 684 798

60 DPD 567 486 567