Electronic Banking System
Nowadays e-commerce, e-business and financial services industry have
increasingly become a necessary component of business strategy and a strong
catalyst for economic development. As a third world developing country,
Bangladesh is far behind to reach the expected level in global banking system.
So it is our urgent need to upgrade its banking system.
E-banking is now a global phenomenon. It is an
invaluable and powerful tool driving development, supporting growth, promoting
innovation and enhancing competitiveness. Technological innovations have been
identified to contribute to the distribution channels of banks and these
electronic delivery channels are collectively referred to as electronic
banking. The evolution of banking technology has been driven by changes in
distribution channels as evidenced by automated teller machine (ATM),
Phone-banking, Tele-banking, PC-banking and most recently internet banking. The
developed country as a part and parcel of their economy is now using electronic
banking or online banking.
Bangladesh is
still lagging behind to avail the opportunity of e-banking .However, banking
sector as a whole has been introducing on line banking system which plays
complementary role to spread of e-banking. Internet has opened a new horizon of
e-banking, creating immense opportunities for marketing products as well as
managing organizations banking internationally. Gradually wireless internet
system has been creating a new paradigm and electronic fund transfer can have a
suitable formation.
E-banking can
improve the quality of the services, save customers valuable time, movement
from one place to another and receiving the goods accurately. E-banking brings
a new channel of distribution process. But this leads to change in the
regulatory issues, cross border trade through emerging new marketing
distribution channel. This reduces transaction time, boundary less trade, and
accuracy.
Governments as
well as different international organizations have also identified that
underdeveloped banking technology creates hindrance on economic progress of the
country. On line banking system is a way of conducting, managing, and executing
banking transactions utilizing information and communication technology (ICT)
and electronic communication networks such as the Internet, intranet and
extranet. Environment of electronic banking requires authentication procedures
for electronic payment system, network environment, computer hardware and
software, electronic hardware, legal bindings, etc.
1.1 Objective of
the Study:
The main
objectives of this study are as follows:
To give shed
light on the concept of e-banking.
To examine the
present status of existing e-banking in Bangladesh.
To know the
adoption of e-banking in Bangladesh.
To examine
infrastructural situation of the country to on line banking system in
Bangladesh.
To observe
present status of on line banking in Bangladesh;
To evaluate
whether on line banking system can work as a complementary to e-banking
process.
To provide some
recommendations so that e-banking can bring fruitful results in the country.
1.2
Research Methodology of the Study:
The research methodology is the complete techniques that
we will follow to conduct the research. This
report is an exploratory and analytical one in nature. For preparing the
report the following methodology is adopted.
Facts and relevant features were collected and here our
best attempts were prevalent to get the better realistic issues as more as
possible.
Pointing out relevant information for working purpose and going for
further collection.
Identifying problems and discussing about recommendations which can be
suggested from a positive perspective as per the requirement of term paper.
Presenting comparison – where needed- with a view to having scrupulous
look to trend of multifarious issues turning over time.
Explaining overall analysis to get a clear view of current and past
situations of both issues.
Using all possible data and procedure that were required for better
accomplishment of term paper.
(a)
Data Source:
In our research, we used
only secondary data. This report is an
analytical and descriptive one in nature. To
conduct the research we have collected the information of the bank of
Bangladesh.
(b)
Research
instrument of the study:
According to the nature
and type of the research, analytical method is used to conduct the working
process. But some open-ended questions are included in the questionnaire.
1.3 Scope of the
study:
Our decision and analyses
are done based on the practices applied in the banks Bangladesh. The study was
wide spread and has greater scope to focus on the e-banking practice in
Bangladesh.
1.4 Limitations
of the Study:
If
there are some advantages of any work at the same time there will be some
difficulties of that work also. But with these limitations people become
successful, they achieve their desire goals. There are so many examples of
that. So, no excuse should be given to hide the weaknesses of any given job.
But if there is hard work and full efforts behind it then people appreciate the
whole work no body search the flaws. There are some limitations of this paper.
But these limitations represent only the facts that really hampered the quality
of report.
In this report we
have faced the following types of limitations:
It was difficult for someone to collect all relevant data.
For such type of research,
more time is needed to go through the topic.
Lack of
experience also acted as constraints in the way of exploration on the topic.
The websites
could not give proper information regarding the topic.
There may be
other variables that also influence the overall task that we cannot mention.
Concept of E-banking:
“E-Banking is an umbrella
term for the process by which a customer may perform banking transactions
electronically without visiting a brick-and-mortar institution “The concept of
electronic banking has been defined in many ways (e.g. Daniel, 1999). According
to Karjaluoto (2002) electronic banking is a construct that consists of several
distribution channels. Daniel (1999) defines electronic banking as the delivery
of banks' information and services by banks to customers via different delivery
platforms that can be used with different terminal devices such as a personal
computer and a mobile phone with browser or desktop software, telephone or
digital television.
Imagine a Scenario
A non-resident Bangladeshi
(NRB) in Paris has an easy way to access money in this fashion capital of
the world.
His Citibank account in
Bangladesh can be accessed through an ATM in Paris, which in turn transmits
information to Citibank’s central hub in the US.
The Bangladeshi takas are
converted to US dollars, which are in turn converted into French Francs at
the current exchange rate, the Bangladeshi account is debited and the
Francs made available to the NRB.
Welcome to the
era of technology banking!
|
What is E-banking?
Online banking or Internet banking
In simple terms it does not involve any
physical exchange of money, but it’s all done electronically, from one account
to another, using the Internet.
From a personal computer, customerscan access their
bank account information, and perform many banking functions, like transferring
money, making a loan payment
Once they register themselves on a bank
website, they can view
Their accounts,
credit card & home loan balances
Accrued interest,
fees and taxes
Transaction
details of each account
Pay bills
Transfer funds to
third party accounts which you nominate
Open a deposit
right from the terminal you are sitting at.
However, till now Internet services in
Bangladesh only allows for a minimum level of interactivity such as
Answering e-mail
queries
Feedback forms
Articles asking
for readers’ opinion at the end
An accountholder, armed with a password, can
use the Net to order a cheque book, stop payment of a cheque and spot the
balance and individual operations in the account and transfer funds.
E- Banking Services and
Products
E banking products and services can
includes wholesale products for corporate customers as well as retail and
fiduciary products for individual customers. Ultimately the products and
services obtained through internet banking may mirror products and services
offered through other bank delivery channels. A brief description of retail and
wholesale products and services are given below:
Automated
Teller Machine (ATM)
Automated teller machine (ATM) is a
computerized telecommunication device that provides a financial institute s
customer with a method of financial transaction in a public space without need
for a human clerk bank teller.
Figure 1: Automated teller Machine
Debit
Card
Debit card is a plastic card which provides
an alternative payment method to cash while making purchases. the amount of
transaction is typically displayed on a card reader, after which customer
swipes the card then enter their pin number (a attendant must swipe gift cards
at gas stations).there is usually a short delay while the EFTPOS (electronic
fund transfer at point of sale) terminal contract the computer network (over a
phone line or mobile connection) to verify or authorized the transaction)
Figure 2: Debit Card
Credit
Card
Accredit card is a system of payment
named after the small plastic card issued to user of the system. Credit card is
different from debit card in that it does not remove money from the user
account‘s after every transaction. In the case of credit card, the issuer lent
money to consumer. It is also different from charge card (though this name is
sometime used by the public to describe credit card) which require the balance to
be paid in full each month. In contrast credit card allow the customer to
revolve their balance at the cost of having interest charged
Figure 3: Credit Card
Point
Of Sale
Pos
is a abbreviation of point of sale ( or point of sale or point of service) this
can mean a retail shop, a check out counter of in a shop, or a variable
location where a transaction occur in this type of environment. Additionally
point of sale refers to the electronic cash register system being used in an
establishment. Point of sale system are used in a restaurant, hotel, stadium,
casino as well as environment in short, if something can be sold, it can be
sold where point of sale system are in used.
Figure 4: Point of Sale
ChequeTruncation
Check truncation is such a service in
which a financial institution does not return the rejected checks with the
monthly statement. The bank store the rejected check for a certain
period(usually 90 days) during this time period customer can adjust his account
if any imbalances found between his own record or and the bank statement provided by the bank. After the expiration of
this stipulated period, rejected check are spoiled and bank maintain a micro
film of copy for a period.
Figure 5: Cheque Truncation
Home
Banking
At
first, bank introduced telephone bill payment system so that customer could be
able to do their banking activity from their home. The next version of home
banking is a video home banking. The internet is expected is to be a major
factor in home banking.
Figure 6: Home Banking
The
Retail Automated Clearing House Service
The
automated clearing house is a electronic network for financial transaction.ACH
possesses large volume of credit and debit transactions which are originated in
batches.ACH credit transfer include direct deposit payroll payments and payment
to contractors and vendors.ACH debit transfer include consumer payment on
insurance premium, mortgage loan and other kinds of bills. Businesses are also
increasingly using ACH to collect from customer online, rather than customer
debit and credit card.
Figure 7: The Retail Automated Clearing
House Service
Wire
Transfer
Wire
transfer is the process which ensures fast and appropriate timing of fund
transfer from sender to the recipient. These kinds of transfer of money could
be either within the country or abroad. Fund are transferred under the
following network
Figure 8: Wire Transfer
Corporate
Automated Clearing House
Corporate
automated clearing house is a network for financial transactions which are
originated in batches. Other retail and fiduciary product and service includes
balance inquiry, fund transfer, downloading transaction information, bill
presentment and payment, loan application , investment activity and other value
added services.
Figure 9: Corporate Automated Clearing
House
Security Measure in E-Banking
Security
of a system is the extent of protection against some unwanted occurrence such
as invasion of privacy, theft and the corruption of information or physical
damages. As this system is developed through the internet there is a big chance
hacking through our system. Current browsers counter security threat with a
network communication protocol called secure socket layer (SSL). SSL is a set
of rule that tells computer the steps to take to improve the security level of
communication. These rules are designed for the following
Figure 10: Security measure in E-Banking
Encryption
Guards
against eavesdropping. Encryption is the screaming of information for transmit
ion back and forth between two points. When we send out letter to our friend,
we communicate in a language that both of us understand. Since our language is
understood by thousand of other people also, if some one gets hold of our
letter, he will not get any problem in understanding its contents.
Decryption
Encryption refers to the encoding of
information that a user sends over the internet. If an unauthorized party tries
to read that, it would be impossible for them to read it. Decryption is reverse
technique of encryption. After receiving encrypted data it is converted to
original data.
Secure Socket Layer
Secure Socket layer (SSL) provides sound
privacy protection by encrypting the channel of communication between server
and the customer. Using a mathematical formula, SSL puts the information into a
complex code. Even if information is intercepted, that would be extremely
difficult to read. So SSL’s only role is to encrypt or decrypt message. This
protocol fully encrypts all the information in both the HTTP request and HTTP
response, including URL the client is requesting any submitted from contents
(e.g. credit card number, debit card number), any HTTP access authorization
information (user names, password) and all the data returned from the server to
the customer.
Authentication
Guards against impersonation.However ,
these effects protect our data only during transmission. That is, network
security protocols do not protect our data before we send it. Just as we trust
merchants not to share our credit card information. We must trust the
recipients of our on- line data not to mishandle it.
Growth in E-Banking
Numerous factors including competitive
cost, customer service and demographic considerations are motivating banks to
evaluate their technology and access their electronic commerce and internet
banking strategies. Many researches expect rapid growth in the customer using
online banking products and services. Evaluating a bank’s strategic objectives,
how well the bank is meeting its internet banking product plan and whether the
business is expected to be profitable studies show that competitive pressure is
the chief driving force behind increasing use of internet banking technology,
ranking ahead of cost reduction and revenue enhancement, in second and third
place respectively. Banks see internet banking as a way to keep existing
customers and attract new ones to the banks. National banks can deliver banking
services on the internet at transaction cost far lower than traditional
brick-and-mortar branches. The actual cost to execute a transaction will vary depending
on delivery channel used. National banks have significant reasons to develop
the technologies what will help them to deliver banking products and services
by the most cost effective channels.
Adoption of E-Banking in Bangladesh
As an Internet
based technology, e-banking is new and a quite unfamiliar for some people in
Bangladesh due to the digital divide and the different level of internet
experience and environments. E-banking services have been available in
Bangladesh since 2001. As of 2007, 29 out of 48 banks have offered online
financial services
Reduction
and revenue enhancement is in second and third place respectively. Bank sees
internet banking as a way to keep existing customers and attract new ones to
the bank. National bank can deliver the banking service on the internet at
transaction cost at lower than traditional brick- and -mortar branches. The
actual cost to execute a transaction cost will very depending on the delivery
channel used. National bank has significant reason to develop the technologies
that will help them to deliver banking product and service at the most cost
effective channel.
Adoption of E-Banking by
Respondents
Male respondents
were more interested about online banking than female respondents. For that
reason most of our respondents are male displayed in Table 1. But the number of
females was increasing which was a good sign. At the same it observed that
young people adopt the use of Internet more rapidly. Regarding monthly income,
Table 2 and
Figure 1 showed that the percentages of respondents were found to be higher in
case of whose monthly incomes were also more than that of other respondents.
Regarding service
in the Bank, Table 3 and Figure 2 revealed that 44% respondents of the total
sample size were faced problem in queue and 32% respondents faced hassle to get
the telephone lines free in the Bank. It observed that most of the respondents
of the total sample size were not willing to pay monthly fees for their service
revealed in both Table 4 and Figure 3.
In addition, it
found that 119 interviewee which 79.33% of the total sample size, responded
that they needed moderation in operation of the computer. 112 of the
interviewee who is 74.66% of the total sample size responded that they were
moderated in browsing Internet. 96 of the responded of the total sample size
told that they were quite known to the services that were provided in some
foreign countries. Literacy results showed that e-banking would not be a tough
operation to the people because of their computer knowledge. 89% told that they
used to call the bank frequently to their balance. 95% told that they used to
know whether the clearing check is cleared or not. 95% of the customers assert
that they were willing to pay the utility bill payment through Internet, which
would be very convenient for them. The above finding showed that on people’s
perception about Internet and e-banking are satisfactory.
Table 1. Number And Percentage Of Respondents By
Gender.
|
||
Gender
|
Number
|
Percentage (%)
|
Male
|
87
|
58
|
Female
|
63
|
42
|
Total
|
150
|
100
|
Figure 11
Table 2. Number And
Percentage Of Respondents Who’s Income Per Month Tk-000.
|
||
Income/Month
|
No. of respondents
|
Percentage (%)
|
Below
15 Tk.
|
20
|
13
|
15
- 20 Tk.
|
47
|
31
|
15
- 20 Tk.
|
29
|
19
|
Above
30 Tk.
|
54
|
37
|
Total
|
150
|
100
|
Figure 12
Table 3. Number And Percentage
Of Respondents Problem Faced In The Bank.
|
||
Problem faced
|
No. of
respondents
|
Percentage
(%)
|
Queue problem
|
67
|
44.66
|
Hassle to get the telephone lines
free
|
48
|
32
|
Information is not readily available
|
20
|
13.34
|
Lack of confident
|
15
|
10
|
Total
|
150
|
100
|
Figure 13
Table 4: Number and percentage of
respondents by monthly fees.
|
||
Monthly fee
|
No. of respondents
|
Percentage (%)
|
Less than 100
|
69
|
46
|
Tk. 100 – Tk.
200
|
40
|
26.7
|
Tk. 200 – Tk.
300
|
36
|
24
|
Tk. 300 – Tk.
400
|
5
|
3.33
|
Total
|
150
|
100.03
|
Figure 14
Prospects of E-Banking in Bangladesh
The Bangladesh
railway owned a high-speed optical fiber network (1,800 km) parallel to the
railway path that covered most of the important parts of Bangladesh. This
optical fiber network can be used as the backbone network of e-banking in
Bangladesh. For example, mobile phone operators such as Grameen Phone and Ranks
ITT of Bangladesh used this optical fiber network through which they reached
even in rural areas with their services (Islam 2005). It is encouraging that
some of the FCBs and PCBs are already used this optical fiber network for
conducting online transactions, ATM and POS services. In addition, Bangladesh
Bank was implementing the different projects for modernizing national payment
and settlement system started from 2009 followed by the development of
inter-bank online network. It made mandatory for all head offices of the
scheduled banks to be connected with Bangladesh Bank. These efforts would allow
the scheduled banks to be connected to each other for conducting inter-bank
online transactions in near future and this would smooth the introduction of e
banking in Bangladesh.
Internet services
came to Bangladesh with connectivity in 1996. Digital telephone exchanges
established in 389 upazilas and 17 growth centers. Work was underway to cover
the rest of the upazilas under digital exchange system. Meanwhile, Bangladesh
joined the information super-highway by connecting itself with international
submarine cable system in 2006. A total of 159 Internet Service Providers
(ISPs) now connected with this system of which 64 are actively providing
services. Internet connection was slow with bandwidth range 32 - 56 kbps for
dial up and 64 - 8 mbps for broadband. Under this scenario, as a part of
government decision of building digital Bangladesh, the existing capabilities
of ICT sector was likely to increase rapidly in bringing all upazilas under
internet services and this will contribute in widening the scope of e-banking
throughout the country.
The overall
computer density in the banking sector was 1.64. For foreign commercial banks
(FCBs) the computer density was 45.34, where as for NCBs the ratio was only
0.41. The specialized bank scenario was almost same as the NCBs, 0.43. On the
other hand, private commercial banks had comparatively higher ratio, 4.94. As a
whole 81.81 percent bank did not have any local area network (LAN), 30 percent
had WAN (Wide Area Network) but for some banks many branches were outside of
WAN connectivity. At present, all foreign banks of our country were using
online banking system; they were invested a lot for their automation banking
services. For this reason, they were increasing market share every year. They
were the pioneer of implementing electronic banking systems in Bangladesh, but
now most of the private banks of our country used electronic banking systems.
In our country different banks were offering electronic banking services in
different ways, some were offering ATM (Automatic Teller Machine) services,
some were tele-banking and some were electronic fund transfer, debit card,
credit card etc.
Recently, the
government’s emphasis on building a digital Bangladesh, setting up ICT park,
raising allocation for developing ICT infrastructure, waiving taxes on computer
peripherals and other measures including the automation program of banking
sector led by the Bangladesh Bank and competition among the scheduled banks in
improving customer services accelerated the prospects of e-banking in
Bangladesh.
Present status of E-Banking in Bangladesh
E-Banking satisfied customer demand in
banking activities electronically throughout the world. At present, several
private commercial banks (PCBs) and foreign commercial banks (FCBs) in
Bangladesh offered limited services of tele banking, internet banking, and
online banking facilities working within the branches of individual bank in a
closed network environment. The FCBs played the pioneering role with adoption
of modern technology in retail banking during the early 1990s whereas the state
owned commercial banks (SCBs) and PCBs came forward with such services in a
limited scale during the late 1990s.
PC Banking Or PC Home Banking
PC banking referred to use of personal
computer in banking activities while under PC home banking customers used their
personal computers at home or locations outside bank branches to access
accounts for transactions by subscribing to and dialing into the banks'
Internet proprietary software system using password. Basically, PC banking or
PC home banking categorized into two types such as online banking and Internet
banking.
Figure 15: PC Banking
Online Banking:
International standard online banking
facilities were expanding in Bangladesh. At present, 29scheduled banks offered
any branch banking facilities through their respective bank online network that
provided facilities like transaction through any branch under the respective
bank online network; payment against paid order or pay order encashment, demand
draft encashment, opening or redemption of FDR from any branch of the same
bank; remote fund transfer, cash withdrawal, cash deposit, account statement,
clearing and balance enquiry within branches of the same bank; and L/C opening,
loan repayment facility to and from any branch of respective bank under its own
online network.
Figure 16: Online Banking
Internet Banking:
Internet banking in true sense was
still absent in Bangladesh. German banks offered the internetbanking since the
mid-nineties, although the only product they were offering at the time was
information. Only 7 out of 48 banks were providing some banking services via
internet that included account balance enquiry, fund transfer among accounts of
the same customer, opening or modified term deposit account, cheque book or pay
order request, exchange rate or interest rate enquiry, bills payment, account
summary, account details, account activity, standing instructions, loan
repayment, loan information, statement request, cheque status enquiry, stop
payment cheque, refill prepaid card, password change, L/C application, bank
guarantee application, lost card (debit/credit) reporting, pay credit card
dues, view credit card statement, or check balance.
Figure 17: Internet Banking
Mobile Banking
Mobile
banking was a term used for performing balance checks, account transactions,
payments etc. via a mobile device such as a mobile phone. The standard package
of activated that mobile banking covers are: mini-statements and checking of
account history; alerts on account activity or passing of set thresholds;
monitoring of term deposits; access to loan statements; access to card
statements; mutual funds/equity statements; insurance policy management;
pension plan management; status on cheque, stop payment on cheque; ordering
check books; balance checking in the account; recent transactions; due date of
payment; PIN provision, change of PIN and reminder over the internet; blocking
of (lost/stolen) cards; domestic and international fund transfers; micro-payment
handling; mobile recharging; commercial payment processing; bill payment
processing; peer to peer payments; withdrawal at banking agent; and deposit at
banking agent. Despite huge prospects, only a few banks adopted mobile banking
in Bangladesh during the last year.
Figure 18: Mobile Banking
Tele-Banking
Tele-banking
service was provided by phone. To access an account it was required to dial a
particular telephone number and there were several options of services. Tele
banking services widened not enough in daily banking activities in Bangladesh.
Only four banks so far provided a few options of tele banking services such as
detail account information, balance inquiry, information about products or
services, ATM card activation, cheque book related service, bills payment,
credit card service and so on. Funds transfer between current, savings and
credit card account, stock exchange transactions etc. were still inaccessible
through tele-banking in Bangladesh
Figure 19: Tele-Banking
Status of Bangladesh in Adopting Banking Technology
It is imperative for Bangladeshi commercial banks to embrace the latest
technological changes in offering banking services. More and more banks are now
using different software to do their banking operations, which has established
the arguments in favor of using technology. Many Bangladeshi commercial banks
initially started with some locally produced banking software and at present
many of them are now upgrading the previously obtained software. However, some
of them started with the advanced foreign software. These software enable the
banks to perform their banking operations more smoothly than that of past with
more customer orientation and flexibility. It is evident from table 1 that the
banking sector of Bangladesh has recognized the necessity of introducing new
technology in this arena.
The widely used banking software in Bangladeshi commercial banks at
present are PC bank (12 banks), BEXI bank (7 banks), Flora Bank (7 banks),
Infinity Banking solution (4 Banks), Micro Banker (2 Banks), and Flexcube (2
banks). Moreover, some commercial banks are using Kurnel, KPATI, A2Z, IBBS,
Finacle Core, EAGLE, Stellar< Millennium banking system(MBS), and EBBS etc.
about 16 commercial banks are using ATMs including foreign commercial banks.
The banks are planning to install more ATMs in different location, which are commercially
important. Some banks are using shared ATM facilities to minimize the
installation cost of ATMs.
Table5: Status of software & ATM in Banks
Name of
banks
|
Banking Software
|
ATM
|
|
Present
|
Previous
|
||
Sonali
Bank
|
Bexibank
4000+,PC bank, Kurnel banking system, Flora bank
|
Bexibank
3000+
|
YES
|
Janata
bank
|
BEXI
Bank, Flora Bank
|
Bexibank
|
NO
|
Agrani
bank
|
BEXI
Bank 3000+
|
N/A
|
YES
|
Rupali
bank Ltd.
|
Infinity
Banking solution (IBS)
|
IBS
|
NO
|
Pubali
Bank
|
PIBS
|
A2Z
|
NO
|
Uttara
bank Ltd.
|
UIBS
|
A2Z
|
NO
|
Bangladesh
krishi bank
|
IBS
and Flora Bank
|
N/A
|
NO
|
Arab
Bangladesh bank
|
KPATI
|
Bexibank
|
YES
|
National
bank Ltd.
|
BEXIBank
4000+, BEXIBank 3000+, A2Z and Flora Bank
|
Bexibank
|
YES
|
The city
bank Ltd.
|
Finacle
Core
|
PC
bank
|
YES
|
Islami
bank Bangladesh Ltd.
|
IBBS
|
Bexibank
|
YES
|
IFIC bank
Ltd.
|
BEXIBank
4000+
|
Bexibank
3000+
|
YES
|
United
commercial bank Ltd.
|
PC
Bank
|
Bexibank
3000+
|
YES
|
The
oriental bank Ltd.
|
PC
Bank2000
|
N/A
|
YES
|
BASIC
bank Ltd.
|
EAGLE
|
N/A
|
YES
|
Eastern
bank Ltd.
|
Flexcube
|
|
YES
|
National
credit and commerce bank Ltd.
|
Micro
Banker (I Flex)
|
Bank
star 2000
|
NO
|
Prime
bank Ltd.
|
PC
Bank
|
N/A
|
YES
|
Southeast
bank Ltd.
|
PC
Bank
|
|
YES
|
Dhaka
bank Ltd.
|
Flexcube
|
PC
Bank
|
YES
|
Al-arafahislami
bank Ltd.
|
BEXI
Bank
|
N/A
|
YES
|
Social
investment bank Ltd.
|
PC
Bank
|
Bexibank
|
YES
|
Dutch-Bangla
bank Ltd.
|
PC
Bank
|
PC
bank
|
YES
|
Mercantile
bank Ltd.
|
PC
Bank
|
N/A
|
YES
|
Standard
bank Ltd.
|
BEXI
Bank 4000+
|
N/A
|
YES
|
One bank
Ltd.
|
Micro
Banker (I Flex)
|
PCbank
|
YES
|
EXIM Bank
Ltd.
|
PC
Bank
|
N/A
|
YES
|
Bangladesh
commerce bank Ltd.
|
Flora
Bank
|
N/A
|
NO
|
Mutual
trust bank Ltd.
|
Flora
Bank
|
BEXI
Bank
|
YES
|
First
security bank Ltd.
|
PC
Bank/M, PC Bank 2000
|
PC
Bank
|
YES
|
The
premier bank Ltd.
|
PC
Bank 2000
|
PC
Bank
|
YES
|
Bank asia
Ltd.
|
Steller
|
Bexibank
4000+
|
YES
|
The trust
bank Ltd.
|
Karnel
Banking System
|
|
YES
|
Shahjalal
bank Ltd.
|
PC
Bank 2000
|
N/A
|
NO
|
Jamuna
bank Ltd.
|
Flora
Bank
|
N/A
|
YES
|
BRAC bank
Ltd.
|
Millennium
Banking System (MBS)
|
N/A
|
YES
|
American
express bank Ltd.
|
-
|
-
|
YES
|
Standard chartered
bank
|
EBBS
|
BBS
|
YES
|
Habib
bank Ltd.
|
MOBS
|
N/A
|
NO
|
Bangladeshi commercial banks are
implementing the online banking gradually, though it can not be said it is real
time online banking. In this case the private commercial banks are playing the
pioneering role. Through the existing system of online banking the branches are
linked together with one another which facilitate smooth coordination among the
branches and also with the head office. In Bangladesh, except very few banks,
online banking is limited to the extent – any branch banking, which enables a
customer to operate his/her account in any of the branch if he/she has an
account in respective bank. It enhances the mobility of account transaction.
Few Bangladeshi banks are now introducing real time online banking and internet
banking. It is basically in true sense the online banking, which is practiced
in much developed banking system. The Bangladeshi commercial banks, which are
introducing real time online banking, have made a breakthrough in traditional
online banking. They interpret this paradigm shift in terms of benefits such as
centralized system, EOD at data center, centralized MIS, improved control
reports, anywhere 24 hours × 7 days banking, internet banking, tele-banking,
and ATM/POS, one stop shop for all banking needs, sophisticated customer
information, online inter-branch transfer, any branch pay order system, digital
signature/photo image while transacting, display customer
balance-transaction-statement online, automatic Sweep in and out, bill payment
(utility service bill, tuition fees, mobile phone bills), etc. Therefore, from
the introduction of real time online banking the customers of those banks will
be able to enjoy the high quality customer oriented banking service. Besides
the PCBs, Foreign Commercial Banks (FCBs) operating in Bangladesh are offering
world class banking services using the improved banking technologies since their
operation stated in this country.
Current Status of E-banking
in Bangladesh
Foreign banks through successful use
of a global network have increased the timelines and accuracy of information,
benefiting its customers, employees and also management.
Abroad spectrum of E-banking services,
a subset of electronic finance, is available in Bangladesh with different
degree of penetration.
Sonali
Bank:
Sonali bank is the largest govt. owned
bank in Bangladesh. Its 796 branches are on live operation. Out of 1191
branches at home, 1176 branches have already been entered in the automation
network. Sonali Bank Limited is a member of Q-Cash ATM network. At present the
bank has 22 ATM booths. Establishment of 33 more ATM is on. At present
109 branches of Sonali Banks are included in the Online Any Branch
Banking (ABB) network. The bank is seriously working on connecting all branches
in the Real-time Online Banking network gradually. Branches having ABB facility
are also rendering SMS banking services.
Janata
Bank:
Janata Bank is providing several
online banking services to its customers. Currently their online banking provides the following facilities:
ü Current/Savings/STD account status
ü FDR account status
ü Advance account status
ü Loan account status
ü Allow user to change their PIN code/password
They are opting to provide some more
online banking services.Future
facilities:
Ø L/C Opening Request
Ø A/C Opening Request
Ø Internet A/C Opening Request
Ø Cheque Book Issue Request
Ø Standing Instructions
AgraniBank
Agrani Bank
Limited has launched Debit card under a shared system. The shared ATM system is
maintained by Cash Link Bangladesh Limited (CBL). The following banks are in
the said shared ATM system.
- Agrani Bank Limited
- AB Bank Ltd.
- Bank Asia Ltd.
- Islami Bank Bangladesh Ltd.
- Social Investment Bank Ltd.
Rupali
Bank
Rupali bank Ltd. is a Govt. owned commercial bank. Its ATM facility is Now available in 8 different locations. It has taken several initiatives to become computerized. And its computerizing process is not completed till now.
Pubali
Bank
Pubali bank is the largest private
commercial bank in Bangladesh. It has 205 online branch and other branches are
in process of providing this service. Its provide this service in both home and
abroad
Arab
Bangladesh Bank Ltd:
Arab Bangladesh bank Ltd was the first private bank of Bangladesh with
a long standing experience in domestic and international banking. Its 153
branches in all the major commercial centers of the country and 152
correspondents worldwide provided proficient banking services to its customers.
The
City Bank Ltd.
City bank limited provides online banking services in the name of
City-I-Bank. It also known as city single click banking. Facilities under this
service are:
ü View Account Summary
ü View Account Details
ü Print Statement
ü Cheque Book Inquiry
ü View Standing Instruction
Islami
Bank Bangladesh Ltd.
Automated Teller Machine (ATM), interalia, has
unveiled the horizon of Electronic Banking of 21st Century. Through ATM,
customers can avail non-stop online teller service without going to the
specific branch of the member bank. They can withdraw or deposit cash or cheque
as well as pay utility bills like BTTB, Grameen, AKTEL, City Cell Phone, DESA,
WASA, TITAS etc. with the help of this modern computer controlled machine. The
service is now offered by ETN and eleven member banks including Islami Bank
Bangladesh Limited.
- ATM Card holders can withdraw cash from
ATM at any time.
- Customers can make transactions from any
of the machines with logo ‘E-cash’ installed at different places in the
city.
- In course of time utility bills like
WASA, TITAS and DESA etc can be paid through ATM.
- Now BTTB, Grameen, AKTEL, City Cell
Phone bill can be paid through ATM.
- Now IBBL E-cash cardholders can be paid
their monthly installment of Mudaraba Hajj Savings, MSS (Pension),
MudarabaMuhor Savings and HDS schemes of IBBL through ATM.
- The machines are located in convenient
places where customers usually deal with money matters. So they can easily
avoid the risk of cash carrying by using ATM Card.
- Customers may know their present
balance at any time from the machine.
In course of time POS (Point of
Sale) can be used.
IFIC Bank Ltd
IFIC
bank provide online banking service by using internet , ATM, and mobile
banking. FIC Card is powered by VISA, world's largest electronic payments
network. IFIC Bank has been issuing VISA branded Credit Card, Debit Card &
Prepaid Card. Customer can choose any of the above card according to his/her
need.
They
provide both push and pull services.
Pull
services:
ü Current
Outstanding Balance
ü Mini Statement
Request ( Last 5 Transactions)
ü Minimum Payment
Due
ü Payment Due Date
Push
Services
ü Payment Due Alert
ü Transaction
Notification
ICB
Islamic Bank Ltd.
ICB Islamic Bank
Ltd has taken the initiative to expand its arena in electronic payment system.
The customers of ICB Islamic Bank are now connected to more than 950 ATMs
countrywide.
With ICB easy cash ATM Card, customers are
connected to the following networks :
- ICBIB ATMs
- BRAC Bank ATMs
(OMNIBUS)
- Dutch-Bangla
Bank ATMs
- Q-Cash
Consortium Members Banks ATM
Cardholders
can have a frequent access for Cash Withdrawal, Fast Cash and Balance Inquiry
using ICBIB easy Cash ATM Card. Besides this, Customer can receive Mini
Statement and PIN Change from the ATM.
Eastern
Bank Limited:
Eastern bank limited Internet banking application addressed the needs
of small, individual and corporate account holders of the bank. This
application provided a comprehensive range of banking services that enabled the
customer to meet most of their banking requirements over the net. The
transactions that were supported by the internet banking provided by Eastern
Bank Limited were account operations and inquiries, fund transfers and
payments, utility bill payments, deposits, loans, session summary etc.
NCC
Bank
NCC
Bank has launched its Visa Credit Card Service on August 22, 2005 and we are
offering three types of cards which are Visa Classic, Visa Gold (Local) and
Visa Dual Currency Card (Globally and locally). Since then were able to reach
5000 cards, both corporate and general.NCC bank Visa Credit Card is accepted at
over 5,000 merchant outlets around the country. Our wide range of merchants
include Hotels, Restaurants, Airline and Travel Agents, Shopping Malls,
Hospitals, Jewellery Shops, Mobile Phone and Internet Service Providers, Petrol
Pumps and many more! Now NCC Bank Visa Credit Cards can also be used at all 142 ATM’s Booth
and 600 POS (Point of Sale) of Dutch-Bangla Bank.
and 600 POS (Point of Sale) of Dutch-Bangla Bank.
Prime
bank
Customers can enjoy real-time internet
banking with prime bank. They just have to click to do bank transactions
wherever they are, anytime they want. It is safe and convenient to access their
account 24/7.
What they Offer in Internet Banking:
ü Balance enquiry
ü View account
statement
ü View loans
schedule
ü View deposit
schedule
South East Bank Ltd.
The bank has 10 ATM booths. Services available in
SEBL Internet Banking areAccount Services
- Account Balance Inquiry, Account Statement View and DownloadAccount
Information View, Cheque Request - Cheque Leaf Stop for payment Request, Cheque
Book Issue Request.
Al-ArafaIslami
Bank Ltd.
The bank has
11 ATM booths. It has Debit Cardcan be used on any electronic self-printing
POS machine where VISA is accepted, locally and internationally.
Dutch Bangla Bank Ltd.
Dutch-Bangla
Bank is the first bank in Bangladesh to be fully automated and introduce
Electronic Banking. DBBL also has the largest ATM network in Bangladesh. It has
total 1715 ATM booths. DBBL is the only local bank to have a off-site Data
Recovery Site (DRS). DRS ensure that customer records are safe, backed-up, and
up to date in the event of a major catastrophe at the Electronic-Banking
Division headquarters. Since 2004, DBBL has introduced Mobile and SMS Banking.
With a mobile phone, customers can perform many banking operations with their
phone. DBBL is a primary license holder for both VISA and MasterCard. It is
authorized to issue and accept payments from both organizations. DBBL also
works closely with both organizations to bring you the latest in card
technology. DBBL also offer Visa and MasterCard Debit Cards.
Mercantile Bank Ltd.
Online
Banking have so far been activated with 41 Branches of the Bank from January 01,
2006. Online service is now available
for all customers – Both Cash deposit and withdrawals,
ChequeDeposits and Transfer in CD, SB, STD, Loan accounts (Cheque Bearing
within limit) and monthly saving scheme.
Standard Bank Ltd.
Standard
Bank Limited has joined to OMNIBUS, a shared network for ATM & POS. this bank
have real time online banking for their valued clients at all branches. SBL Cards are acceptable in the Dutch Bangla
Bank Limited Network. Standard Bank Limited provides foreign
transactions facility through SWIFT- a modern technology for highly secured,
cost effective, highly reliable, with close to 100% availability. Being member
of SWIFT, Standard Bank Limited communicates with other member banks through
11(eleven) digit unique BIC (Bank Identification Code) SDBLBDDHXXX. The SWIFT
Codes of our AD Branches are as follows:
EXIM Bank:
EXIM
Bank brings SMS Banking services to provide instant access to customer account
information at any time. Any mobile phone user having account of EXIM Bank can
get the service through the mobile phone upon registration. What offer in SMS
Banking:
Balance Enquiry
Mini Statement
Help Service
Account Information
Bangladesh Commerce Bank Ltd.
BCBL has launched BCB Credit Card. It
is a low-cost credit card product with wide acceptability within the country,
compared to other cards available in the market. It is the first ‘Proprietary
Credit Card’ branded as BCB for Bangladeshi customers. It is a low-cost credit
card product with wide acceptability within the country, compared to other
products available in the The BCB Card can be used in the POS terminals for
buying goods and services and in ATMs of the Member banks of Q-Cash for cash
advance. The BCB Card can be used in the POS terminals at all Merchant Points
of The City Bank Ltd. & Dutch-Bangla Bank Ltd. (DBBL) for buying goods and
services and in ATMs of DBBL, Brace Bank and all the Member banks of Q-Cash for
cash advance.
Dhaka
Bank Ltd.
Dhaka Bank offers the facilities of ATM/Debit Card
to account holders. DBL Customers can enjoy the facilities of over 1400 ATM and
POS throughout the country.
Mutual
Trust Bank Ltd.
The bank has
total 23 ATM booths in Dhaka, Narayanganj,
Gazipur, Chittagong, Cox's Bazar, Bogra
and Comilla. Through the Tele Banking System, customers can access their bank
accounts over the telephone on a 24X7 basis. With MTB Internet Banking,
customer can check balance, view statements for the time being, transfer money
between accounts and pay various utility bills. MTB SMS Banking allows customer
to access information as well as receive transaction alerts on their account by
using mobile phone. MTB Credit Card pay a minimum amount, which is 5% of
total bill amount or any higher amount
and MTB
Visa Debit card can be used as an ATM card at any VISA ATM across the world, as
well as for making purchases.
First Security Islami Bank Ltd.
FSIB have set up Wide Area Network
through Radio, Fiber-Optics & other available communication media systems
to provide any branch banking to their customers through Online Banking. It has
officially launched SMS Banking service from December 17, 2007. The bank has implemented successfully Automated Teller
Machine (ATM) /DBDIT Card transaction from June 25, 2008. Through this,
customer can avail the facilities like withdrawal money, balance inquiryand
purchase goods from Point of sale (POS) using Dutch Bangla Bank Ltd. ATM Booth
and POS.
The
Premier Bank Ltd.
Premier Bank SMS banking service
allows customer to check balance, stop a cheque
payment,cheque book request or even get
their statements. The bank has setup their own “Call Center” at Head Office
.The available services in this call center are Enquiry, Complaint and Customer Service. The bank has also Premier Bank Visa
Credit Card and Premier Bank Visa Debit Card."Premier TC" is prepaid
foreign currency card denominated in US dollar available over the counter of
the branches that makes foreign trip totally hassle-free and convenient.
Bank
Asia:
Bank Asia centralized Database with online ATM, SMS and Internet query
service. The significant delivery channel of Bank Asia was the shared ATM
Network. Bank Asia had 21 ATMs as a member of ETN along with eleven other
banks. Bank Asia was maintaining its competitiveness by leveraging on its
Online Banking Software and modern IT infrastructure. It was the pioneer
amongst the local banks in introducing innovative products like SMS banking,
and under the ATM Network the Stellar Online Banking software enables direct
linking of a client’s account.
The Trust Bank Ltd.
The bank has total 44 ATM booths in Dhaka, Savar, Chittagong, Sylhet,Rajendrapur,
Bogra, Comilla, Khulna, Jessore and Barisal. By using TB Internet Banking, one
can access his/her account from any where in the world and see his/her account
balance as well as take print out of transactions with specific date range and
can preserve it as a document. TB Phone Banking performs balance query and mini
statement of a customer via phone. This service will soon include utility bill
and fund transfer facilities. The automated SMS Banking service performs
balance query and mini statement through SMS.It has alsoTrust Debit Card and Trust VISA-Electron Debit Card. The bank
has Credit Card named as VISA GOLD LOCAL, VISA CLASSIC LOCAL, and VISA CLASSIC
INTERNATIONAL VISA GOLD INTERNATIONAL.
BRAC Bank:
BRAC bank used the most advanced commercially
available Secure Socket Layer (SSL) encryption technology to ensure that the
information exchange between the customer’s Computer and BRACBank.com over the
internet was secure and cannot be accessed by any third party. With 151 outlets, over 250 ATMs and over
500,000 plastics in the market, BRAC Bank offers you a wide range of financial
solutions to meet your everyday need.
CitiDirect
To gain more control over ones cash
position, one needs easy access to accounts and information in real time. One
will need the convenience of local banking and the global solutions of an
industry leader. The solution is CitiDirect online banking. The motto of
citidirect is “Money isn’t everything but it can be everywhere”. The available
facilities are:
Online direct
debit transaction process
Information
reporting
Real-time
information reporting for more effective
cash management
Delivered with
the highest level of security
Easy to use
application
World link
through citidirect comprehensive payment transaction solution
Flexible,
streamlined functionality
Reliability,
speed and information
Payments through
citidirect
A comprehensive
payments solution globally and locally
Simplified,
secure transaction management
Timely, accurate
information
E-mail and
wireless banking alerts by citidirect
Standard
Chartered Grind Lays Bank Ltd
Standard chartered offered the client
a comprehensive range of Cash Management services. It provided the secure,
reliable and effective link between the client and client’s accounts anywhere
across the Standard Chartered network.
HSBC:
Business banking account enabled a
person to receive credit of all the cash or cheque deposits along with inward
remittance and made all local payments and provided access to the wide range of
services for the business requirements. A person may deposit up to BDT50, 000
cash per transaction and any BDT amount in cheque 24 h a day, 7 days a week
through the ATM Machines, conveniently located Sales and Service Centers.
EasyPay Machines were also available for deposit of BDT 50,000 cash per
transaction and any BDT amount in cheque to the business banking account. With
easypay machines, both HSBC and Non-HSBC customers made deposits and pay their
utility bills, credit card payments and etc.
Advantages of E-Banking in Bangladesh
There
were a substantial number of educated unemployed youth forces, with ability to
read and write English exist in the country. They trained within a required
skill in a short time. Reduce extra time; Increase productivity and efficiency;
Eliminate duplication and wastage; Cut down maintenance, and shortage cost;
Curtail security cost.
Long-term benefits
Create new opportunities of jobs for
jobless; participate in the country’s economic health; proper planning and
monitoring; Proper use resources.
Job creation
According to Bangladesh Bureau of
Statistics, the number of unemployed people in Bangladesh in 1990 - 2001 was
1.0 million. Among them 0.2 million are male and 0.8 million female, at the
rate of unemployment was 1.1 which was extended 1.9. The issue of computers
eliminating jobs of people was quite emotional and painfully real. But it has
two sides that automation will eliminate certain types of job like record
keeper and also created jobs like administrator, system analyst, programmer,
operator etc. and helped to reduce unemployment problem.
Contribution to GDP
Banks with a national economy, work
towards building national capital, increasing national savings and mobilizing
investments in trade and industry.
Benefits from the banks’ point
of view
From the banks’ view point, the first
benefits for the banks offering e-banking services was better branding and
better responsiveness to the market. The other benefits were possible to
measure in monetary terms. The main goal of every company was to maximize
profits for its owners and banks were not any exception. Automated e-banking
services offered a perfect opportunity for maximizing profits.
Benefits from the customers’
point of view
The main benefit from the bank
customers’ point of view was significant saving of time by the automation of
banking services processing and introduction of an easy maintenance tools for
managing customer’s money. The main benefits of e-banking were as follows:
Increased comfort and timesaving-transactions made 24h a day, without requiring
the physical interaction with thebank. Quick and continuous access to
information.Corporations had easier access to information as, theychecked on
multiple accounts at the click of a button.Better cash management. E-banking
facilities speed upcash cycle and increases efficiency of businessprocesses as
large variety of cash managementinstruments is available on Internet sites of
banks.Private customers looked for slightly different kind ofbenefits from
e-banking.
Reduced
costs:
This was in terms of the cost of
availingand using the various banking products and services.Convenience: All
the banking transactions performedfrom the comfort of the home or office or
from the place acustomer wants to.
Speed:
The response of the medium was very
fast;therefore customers actually waited till the last minutebefore concluding
a fund transfer.
Fund’s
management:
Customers downloaded theirhistory of
different accounts and do a “what-if” analysis
on their own PC before affecting any
transaction on theweb.
Economical benefits
E-banking served so many benefits not
only to the bankitself, but also to the society as a whole. E-banking madefinance
economically possible: (i) Lower operational costsof banks (ii) Automated
process (iii) Accelerated creditdecisions (iv) Lowered minimum loan size to be
Profitable.Potentially lower margins: (i) Lower cost of entry (ii)Expanded
financing reach (iii) Increased transparency.Expand reached through
self-service: (i) Lowertransaction cost (ii) Make some corporate
serviceseconomically feasible for society (iii) Make anytimeaccess to accounts
and loan information possible.
Empirical Analysis
SWOT Analysis
To find out the viability of a
particular product we must perform a SWOT Analysis of the product. This will
analyze the Strengths, Weaknesses, Opportunities and Threats of the particular
product. For analyzing the performance of Internet Banking in Bangladesh we the
following SWOT Analysis is considered.
Figure 20: SWOT Analysis
Strengths
Internet banking
is new in our market. Only a few banks are now offering internet services in
solving banking problems. Most of the banks are offering only accounting
information online. Actual fund transfer and fund disbursement is not possible
in all the banks that are offering internet services. So this product will
enjoy the benefit of a first mover.
It is cheap both
for the banks and the customers. The
bank will be able to lower down the overhead costs and make more profit out of
it. Internet banking will require less manual workers. Again the customers will
be able to save time as well as money for their transaction needs.
Internet banking
is convenient as the service is available all the time at just a click away.
Weaknesses
Security
breakdown: The system will have a problem with the identification of the
individual who is initiating the transaction. In Bangladesh, the identification
of an individual is not yet supported digitally. So there will be a problem in
moving to the Internet era for banking purposes just now. First we will have to
develop a digital database of the users of the internet banking services.
The transaction
can be cancelled only via internet. The internet infrastructure of our country
is not that much supportive to provide all time access to the web. So there
will be a problem in executing the service with its full functionality.
Opportunities
Non – branch
banking is becoming popular in our country. Many banks are now offering non –
branch banking facilities. A person can withdraw or deposit money in any branch
of the bank he has account with. So moving to internet banking will allow the
banks to offer non – branch banking facilities.
The internet
services are becoming very common to us. So a service offered through the
internet will be widely accepted in the near future.
Threats
People have
concern about security and privacy. They like to feel their money with their
hand. They actually don’t believe in virtual money transfer.
In the field of
IT new technology is coming everyday. The one which is very popular today might
get obsolete tomorrow. So to have a competitive edge over the competitors the
banks must always update their services.
The movement
towards online banking might marginalized the customers who do not have
internet access or who are not technologically sound.
Despite the presence of online
Internet service in Bangladesh, its scope is largely underutilized. The reasons
include high service charges, lack of awareness, poor telecommunication
systems, government policy, low buying power of potential clients and lack of
institutional support.
Costs benefit analysis (CBA)
The main benefit of internet banking is the amount of time (thus money)
it saves. Although internet banking is restricted to managing accounts &
making on-line transactions, it cuts out much of the need to personally visit
the bank. Using internet banking will also increase efficiency of paying money
( bills, debts, wages, etc) as it can reduce the need of writing and sending
cheques ( which can take up to 5 days to clear ). Wages and salary payments can
be created via internet banking to pay such money, which is also an efficient
way of paying staff wages. On line banks are able to offer their customers
highest interest rates than high street banks due to their reduced overheads.
If the popularity of internet banking takes off as predicted the banks may also
be capable of offering their internet banking customer’s higher interest rates
(due to reduced overheads or as and incentive). Through internet banking will
require a higher initial investment; the operating expenses will be much lower.
Again customers will be satisfied through fast, accurate, easy-to-use,
comprehensive delivery of services. So internet banking will be much more
beneficial to banks as well as customers.
Findings
A broad spectrum of electronic banking services, a subset of e-finance,
is available in Bangladesh with various degree of penetration. Credit card and
POS services are provided by 30 percent of banks [PCBs & FCBs]. Several
thousands of POS terminals have been set in major cities in Bangladesh. ATM is
expanding rapidly in major cities. A group of domestic and foreign banks
operate shared ATMtm network, which drastically increase access to this type of
electronic banking service. The network will gradually be extended to other
parts of the country. Credit card is also becoming very popular service in
major cities of Bangladesh; during 1999-2005 the growth of credit card market
is more than 100 percent. The credit card service is available from VISA,
MasterCard and VANIK. Some foreign banks provide electronic fund transfer
services. Microchips embedded Smart Card is also becoming popular in our
country, particularly for utility bill payment.
Product
|
2000
|
2001
|
2002
|
2003
|
2004
|
2005
|
Tele Banking
|
20
|
24
|
25
|
28
|
30
|
32
|
Online corporate
banking
|
8
|
12
|
14
|
15
|
18
|
25
|
Electronic fund
transfer
|
15
|
18
|
20
|
22
|
25
|
30
|
ATM
|
15.4
|
28
|
28
|
30
|
35
|
40
|
Credit card
|
23
|
-
|
20
|
25
|
28
|
24
|
Debit card
|
3.8
|
18
|
22
|
28
|
33
|
40
|
Merchant account
Service
|
3.8
|
12
|
15
|
18
|
18
|
20
|
Internet banking
|
7.7
|
12
|
15
|
22
|
35
|
45
|
Last couple of years shows dramatic
improvement in the awareness situation in the banking community regarding the
comprehensive application of ICT. The experts forecast that ICT penetration in
banking sector will improve dramatically by 2005. Majority of banks is planning
to introduce ICT for integration of banking services, which will play a vital
role in bringing efficiency in the financial sector. Among the banks surveyed
75 percent of banks have strategic plan to implement ICT and internet banking.
Bangladesh bank is now moving to the era of
technological advancement. Bangladesh Bank is planning to have automated
clearing house (ACH) which will automate the processing of checks by MICR
coding. This shows the intention of Bangladesh Bank to the betterment of
services. This will eventually to internet banking to a requirement of all
banks in the near future. With all the strategies we have set for us we can
enter into a new world of internet banking.
Constraints of Internet
Growth
Lack of adequate
and knowledgeable technical skill
Lack of adequate
govt. support
Lack of software
copyright protection act
High preliminary
cost
Lack of adequate
physical facilities
Less investment
and looking for short term return in the last mile solution
Lack of long term
planning
Poor
telecommunication infrastructure
Low level of
computer literacy
Widespread
poverty
Limited point of
presence of ISPs
Lack of software
and content in Bengali
Government Initiatives
The
Government of Bangladesh has taken some important initiatives to develop our IT
sector. Still we are waiting to see a fruitful change in our Information
Technology. However, some remarkable steps of government are highlighted for
information.
IT has been
declared as a thrust sector.
Quick implementation
of the recommendations of JRC reports (a high powered committee for software
export).
Waiving all taxes
and duties from import of computer hardware and software.
Hundred percent
remittances of profit and capital gains for foreign investors without any
approval.
BTTB’s
implementation of Digital Data Network (DDN) service.
Decision to link
Bangladesh to global highway through submarine cable link by next two years.
National
Information and Communication Technology (ICT) Policy has been approved in
2002.
An independent
regulatory body, Bangladesh Telecommunication Regulatory Commission (BTRC) has
been established, functioning since 2002.
Recently started
the establishment of ICT Park to boost up the country’s ICT activities.
The govt. is
liberalizing telecom sector in phases, with increased participation of private
sector.
Copyright Act 2000 named Intellectual
Property Rights (IPR) Law related to ICT is in the process of finalization and
is in the process of enactment by the Parliament.
Recommendations
To
implement e-business successfully in Bangladesh following recommendations are
given below:
Digital
Bangladesh may be activated by 2021 to develop the economy of Bangladesh.
Successful team building with a coherent manner for developing human ware,
hardware, software and web ware are required to increase e-business process in
a systematic way. Moreover, greater emphasis should be given on security system
and to prevent fraud so that any sort of financial transactions including on
line banking payment or any other electronic fund transfer can be properly
handled.
Career path of
hardware and software engineers should be properly designed. Otherwise
professionals will be de-motivated and they won’t work with job satisfaction.
In Bangladesh, on
line banking systems are yet at a take off stage. The Clearing House operation
in Bangladesh should be fully automated system. Banks and business
organizations especially corporate houses should have adequate research,
skilled manpower and technology driven strategies in this regard.
Initiatives to
develop integrated e – banking software through in house built may be taken.
Preference should be given by the bank authority to use local software over
foreign software. Common gateway is required so that inter bank transactions
can be feasible. Bank can charge normal profit to enlarge the market size on
the on line banking products. Banks should have their own strategic plans to
implement on line banking system. Creating awareness and consciousness among the
clients of the banks are also required.
The country needs
to develop e-business with the help of ICT facilities. ICT application and
development of software are very much dependent on the quality of the
workforce, and supportive infrastructure and environment. Upzilla level may be
considered as the base unit which may be connected with district and then
connectivity with the capital of the country can be done. However, more stress
should be given on wire free connectivity for which priority should be given on
WIMAX technology.
Public and
private participation (PPP) for e-business should be encouraged for economic
development. Spread of on line banking is a very good initiative. But it is not
only sufficient. Business sector as a whole should be focused on using
E-business. It should be accompanied with e-governance system and should be
moved towards other areas of the “e”to“e” system like e-tender, e-trafficking,
e-ticket, e-learning etc. More stress should be given to the wireless
transactions and working environment due to rapid technological advancement.
E-business should
be used both for agricultural sector and industrial sector. Equal importance
should be given so that domestic trade and international trade can be
effective. Distortion from the market should be driven out and information
should be passes systematically.
E-business can
help to improve total quality management. This can also ensure quality
assurance of the business sector. As such business policy formulation and
strategies are required and this should be properly implemented. Adequate
training and technological support to be developed so that trained manpower and
technology driven organizations can be created with the help of partnership
between Govt. and non –Govt. organizations.
Quality
maintenance of local software should be arranged. Initiatives should be taken
to set up hardware industry so that computer and computer accessories can be
prepared in the country and easily purchasable for the lower and lower middle
class people. Quality education and training in the field of ICT to develop
human resources are essential. Moreover,
entrepreneurship should be developed for developing hardware and computer
peripherals.
More high-speed
fiber optical data communication infrastructures should be well established for
speedy data communication for domestic and global high speed communication
system. This will help to attain better e-business including on line banking
system. Competitive situation should be arranged so that e-business management
can be improved through efficiency and effectiveness of customer services.
BTRC as a
regulatory body should work with long term vision, mission and fulfillment of
goal oriented strategies. They should work as a facilitator rather not creating
hindrance. VOIP should be legalized after examining and finalizing proper rules
and regulations in the country.
Conclusions
E-banking, the latest generation of
electronic banking transactions, opened up new window of opportunity to the
existing banks and financial institutions. Most of the banks have their own
websites but not all of them offered internet facilities. The main reason of
this was that the banks did not have the IT infrastructure and proper security
features. The Ministry of Science, Information and Communication Technology
went out the policy for the development in the IT sector. Another important
issue in extending the internet banking services throughout the country was
gaining popularity. In Bangladesh most of the people were illiterate and
obviously they were technology ignorant. But among the literate portion many of
them had computer phobia. So these people could not trust on the internet
banking services. To gain the confidence on internet banking the overall
computer literacy must be developed. With that goal government had taken
initiative even in the root level to develop it literacy in the country. This
would be a perfect ground for the development of internet banking. However,
with banking customers growing increasingly comfortable with the digital
lifestyle, but Bangladeshi customers were not aware about e-banking in
Bangladesh. They were not fully understand the power of technology and seek to
leverage it to enjoy better control over their banking operations. To conclude
that e-banking also provided other benefits. For instance, creating new
markets, and reducing operational costs, administrative costs and workforce are
increasingly important aspects for the banks’ competitiveness, and e-banking
improved these aspects as well. So, Bangladeshi banks should take these
advantages of e-banking in Bangladesh economy as early as possible.
References
Ali MM, Ahmed R, Rahman A, Azam
MM (2007). Electronic banking in Bangladesh: potential and constraints.
Adoption of personal computer in
Bangladesh: The effects of perceived innovation characteristics. Proceeding of
the 2nd International Conference of the Asian Academy of Applied
Business (AAAB).
Cooper N (1999). Security
basics: aWhite paper. http://www .pwc.com.
www.occ.treas.gov/special7-6.pdf,
19(2): 29-48.
http://www.ranksitt.net/nwisp.php.
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Problems of introducing electronic banking in Bangladesh
ReplyDeleteAlthough Bangladesh Bank and some other local private banks have launched Back Office System, other foreign banks use both the back and front office (For example. ATM, Debit cards. Credit cards) e-banking. Research shows that e-banking services are very negligible in our country. For some unavoidable reasons, this service can not be expanded. Some major problems are now discussed below.
The main problem of introducing electronic banking in Bangladesh is inefficiency and lack of adequate knowledge of the bank management about e-banking. Nowadays, where globalization uses computers and high-tech instruments for success, Bangladesh has fallen behind due to a lack of consciousness, unwillingness, and lack of knowledge. It may reveal as a curse because of losing market participation.
Lack of proper Strategic plan to gain and retain a market share of the indigenous banks. In addition, many bank managers is not inclined to give services with electronic means.
Lack of international standard communication channel Bangladesh tacks of inter-district telecommunication system, a countrywide data communication system. Moreover, branch offices can not be linked with their head office through single networking based on a Real-Time online basis.
Lack of attractive remuneration to the technocrats. Tips motivate them to go abroad for higher remuneration.
Inadequate budget for establishing back and front office. In fact, it requires a systematic and planned budget for expanding e-banking.
For large-scale services, coordinated efforts are required—lack of integrated plan among the banks and the Central Bank authority.
Inefficient Clearing House Facilities. Now it is half automated, and it requires full automation to encourage commercial banks to go for back and front-office e-banking.
Locally developed software, through automated our traditional banking system, can not contribute much to expanding e-banking services. To meet the demand of current and prospective clients, banking software packages are to be produced such that the coordinated effort can supply all information from the front desk.
The lack of a comprehensive legal structure is one of the problems in implementing e-banking in Bangladesh. Thus Bangladeshi nationals and foreigners can not get worldwide online e-banking services and transfer funds without any legal barrier.