Electronic Banking System in Bangladesh

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.

 Facilities

• 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.

     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.

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