Case study: Scholar Stationary

Scholar Stationary was established 11 years ago by two Indian brothers, one of whom had previously worked for 21 years in the UAE in a local partnership. From humble beginnings the company now employs 88 staff and will have a turnover of around $15 million this year with 80% of its imports coming from China.

As Scholar Stationary grew so did its banking requirements and five years' ago the company decided to bank with HSBC to provide it with international expertise for expansion. But the most dramatic test of this relationship came in September last year when the warehouse burnt to the ground.

A friend in need

'HSBC were immediately on the phone when they heard, and offered us absolutely any assistance that we might need,' says Managing Director of Finance & Business Development, Mohammed Shamsuddin. 'I was in tears and this reassurance at this critical time was extremely welcome.'

Fortunately Scholar Stationary was fully insured and the business recovered by the end of the year. The earlier development of its banking relationship was not nearly as dramatic. But Mr. Shamsuddin explains how the bank has improved on what was not a very auspicious start.

'We found HSBC rather unapproachable in the early days and I remember calling the head of Business Banking Hamid Chinoy and telling him that we were not happy. He booked a meeting for 10am the next morning straight away and came himself to set things straight and sort out our credit limit. We have not looked back since.

'Whenever I have a need for facilities I do my cash flow budgeting and then contact the bank in advance. We also now use invoice discounting which is a very useful innovation, and allows us to borrow against invoices from major groups.

'Another banking service we value is the provision of corporate credit cards for our staff which is branded with the Scholar Stationary name on the card. We have 10 to 12 cards at any one time, each with different credit limits.'

Mr. Shamsuddin also turned to the bank for a term loan to support the import of Double A4 paper from a new source in Bangkok last year, rather than using the traditional letter-of-credit facility. From an initial four containers a month this has now mushroomed to 60 containers a month, which are all sent directly from Bangkok to ports in the Gulf.

The Internet revolution

'The other big change in recent years is Internet banking and Hexagon,' he adds. 'This has greatly simplified transfers, payments and salary payments. And it is wonderful to be able to monitor payments on a daily basis rather than to wait for monthly statements.

'The next innovation for us has to be to get our clients in the GCC States to pay into their local HSBC branches directly rather than by sending us cheques to get cleared. We are working on this. It will make life easier for us and them.'