Centralization of Monitoring of Suits Filed by the Bank in East West Bank Ltd.

Change Management (Organizational Context) Case Study

Centralization of Monitoring of Suits filed by the Bank in East West Bank Ltd.

Recently the Board of Directors of East West Bank Ltd. (EWBL) approved the appeal of the top Management of the Bank for centralization of credit administration department especially the shifting of all pending suites and cases from Branches to Head Office Legal Affairs Division (LAD). Behind such decision the rationale was proper monitoring of all pending suites/cases and ensuring earliest disposal of the same in favor of the Bank which will ultimately have a positive feedback in terms of recovery. Moreover, the expenses associated with suits are expected to be decreased by a significant margin. In the process, the individual officers engaged from each branch to look after the legal issue will have more quality time to devote them in adding more assets in the Bank’s Portfolio. The central bank’s inspection team and Internal Control and Compliance Division of the bank also suggested strengthening the suit monitoring in their last 04-05 years’ audit/inspection reports.

Considering apparent successful migration of such centralization in the peer Banks, the Senior Executive Vice president and Head of Legal Affairs Division (LAD) proposed the centralization of legal monitoring and convinced the other top management of the EWBL. They solicited the approval of the Board of Directors and obtained the necessary approval. The timeframe was fixed for a period of 12 months starting from the January, 2017 and ending within December, 2017. Considering that there remains a 01 month break in the court, the starting time fixed in the winter. The plan was very simple and seemed that the process will be completed within the stipulated time. Before centralization process 85 Branches out of 134 Branches have initiated legal steps against near about 553 clients. To conduct these suits 85 Officials from 85 Branches are engaged for this job and it was estimated that only 15-16 Officials will be enough if these centralization process is completed.

The initial workflow was planned as follows:

1. Collecting the list of all pending suites from all the Branches
2. Sorting suits by dates on weekly basis depending on the priority/merits of the suit.
3. Assigning officers as banks representatives in the concerned court by way that he/she may appear and carry on the suits smoothly and efficiently.
4. Issuing Letter of Authority against each and every suit and submit the same through concerned lawyers before the court to effect the change of Banks representative.
5. Shuffling/Re-shuffling of manpower in the Division (if required) within next 06 months to ensure proper and efficient monitoring of each and every suit.
6. Submission of a progress report after Nine months and a completion report within twelve months to the Board of Directors regarding the migration process.

Everything started well as per the plan. All the data was collected within the shortest possible time and paper works were completed well before the scheduled plan. Sorting of dates based on the merits of the suits seemed quite difficult considering that the dates of all suits are distributed very arbitrarily. But the major setback was the location of the courts which seemed to be overlooked during the initial planning period. It was estimated that a mere portion of the suit may be filed outside Dhaka, but the surprising fact came out to be that 38.52% of the suit (213 no of suits) were filed outside Dhaka. To worsen the situation, these 213 suits are found to be distributed in 28 different districts which means if 15 employees are engaged for 553 suits each official will have to handle portfolio of about 36-37 suits including at least 02 suits outside Dhaka. Hence he/she has to move outside Dhaka at least once in a month (Considering that the date of each suit will be fixed in two months’ interval outside Dhaka). There arises such case that at the same date an Officer has to attend a court in Dhaka as well as Sirajgonj which seemed to be impractical.  To deal with such ambiguity, it was decided by the Head of Legal Affairs Division and Head of HRD (A good friend of Head of Legal Affairs Division) that 10 additional officers (out of 35 fresh Officials newly recruited for cash department for various branches) to be attached with Legal Affairs Division which seemed to a realistic solution but the amount of cost benefit as predicted earlier seems to be narrowed down.