Faculty Of Business
Student Name ID
Saddam Hossain 1022114569
Mir Md Belal 1022114557
Sifuddin Ahmed 1022114559
Joyasree Ghosh 1022114684
Kohinur Akther 1022114580
Nishat yesmin sonia 1022114586
Faculty Of Business studies
Faculty Of Business studies
Application Of Electronic Banking
Application Of Electronic Banking
electronic banking is a segment of electronic
business, which in turn encompasses all types of
business performed through electronic networks.
EBS developed for three reasons:
1)To protect and increase market share
2)To reduce operating cost.
3)To generate new revenue.
Delivery channel Switching system
Basic components of electronic banking
ATM Cash Management
Debit card Wire transfer
Credit card Corporate Automated
Point of sale(POS) Clearing house(ACH)
Whole Electronic Banking
Electronic Banking services Offered By Bangladesh
It stands for automated teller machine.
It is one of the most improvised way of transaction.
As people do not feel comfortable to carry huge amount of money, they use
As ATM holders need to create a bank account and deposit money into the
Bank provide ATM card with a pin number.
By using this PIN number they can withdraw money from any AT M
machine of that bank.
ATM is connected to host computer, and the host computer is connected to the
Bank computer. Here the connection network is telephone network that may be
leased line or dial up using modem. Host computer mainly connected as a
gateway between ATM and Bank computer. Many ATMs can be connected
through this host computer.
Steps of transaction process in
A/c and PIN is being ETN sends clearance signal
Checked in ATM to the ATM machine.
Request for PIN
Debited the account
From the customer Send all transaction information to ETN
Debit card is a plastic card
it is issued by banks or financial institution to the
Hold magnetic coded number for transaction.
Objectives of debit card services:
Revenue generation: The bank can enhance their income by using that card in the
Inter charge fees
Interest on credit line
By using debit cards the expenses of paper transaction like file, voucher, letter etc. can be
minimized, which were really expensive. Expenses can be reduced to a greater extent by
reducing the number of employee.
Debit card is used as an alternative of cash, cheque and credit card. The client will feel
comfortable at the time of payment.
Those who are involved with heavy banking transactions.
Those who perform transactions mostly by cheques.
Those people whose average income is high.
Young people use debit cards more than the old.
People who keep lower amount on an average in their
People who are interested to get card for travel and
People who have more financial assets.
Credit card is a popular process in retail
electronic banking. Generally if the clients have
creditworthiness or have enough money in the
deposit account. Then provide this plastic card to
the clients. In spite of having debit balance in the
deposit amount, a client can use this card. This
card is used for payment of a product or service
or for withdrawing cash from some specific
By issuing credit card bank can identify their valuable
and responsible customer.
Purchase of products or services and other bill
payments are possible by using this card in a particular
With the help of this card, anyone can withdraw
advance cash from the financial institutions.
Advantages of credit card:
Point of Sale service :
An advanced payment system which enables consumers to use an ATM card to pay
for goods and services, electronically debiting the card holders account and
crediting the account of the merchant. In this system the account of the service
provider and receive are simultaneously debited and credited instantly.
Money can be transferred by two ways;
• Seller is required to make a sales draft like credit card. Then this sales draft would
debit the card owners account and credit the sellers account.
• Respective clients/financial institutions/sellers accounts are to be debited or
credited by transferring taka from online point of sale terminals.
Components used in POS
terminals of POS
bank computer systems
Cheque truncation is a process of service where,
financial institutions do not return the rejected and
unhonoured cheques to clients. Financial institutions
keep these checks with the monthly statements and
provide rejected checks along with monthly
statement to the clients.
Check truncation:Check truncation:
Retail automated clearing house services:
ACH is an integrated process of service by which payments of different
financial institutions are cleared and exchanged in electronic way. ACH
is a computer based integrated system and it is the distribution place of
paperless transactions. Electronic payments are the substitutes of papers
and are recorded in machine-readable from in magnetic tape and one
account is debited and another is credited. ACH exchanges electronic
transactions within a specific geographical area.
Types of payments by ACH
government payment for any person or institutions
direct deposit of payroll
Payment of insurance premium approved earlier.
Now a day, limited use of ACH can be found in the following types of
Payment of telephone bill
Payment of pre-approved mortgage, rent and loan instalments
Cash transfer from one business to another under a part of the cash
Through developed electronic fund transfer system
bank can offer its financial services to the doors of
customers. Customer can open L/C, transfer fund,
check their account sitting in their own desk with the
help of his PC and a telephone at home. In this way
customer can handle his all kinds of deal, payment and
order before sitting in front of his own PC, that’s called
Home Banking. The next version of home banking is
Video Home banking(VHB).The internet is expected to
be a major factor in home banking.
Home BankingHome Banking
Information retrieval: clients can get various information of
regarding the accounts, price information, and product
Transaction: clients can pay their bills, order the cheques, and
purchase the instruments
Provide electronic information: clients can confirm deny loons,
make any complaints, or transfer massages.
Computation: clients can calculate mortgage loan repayment
schedule, prepare budget and make pre-costing.
VHB services are divided into 4
Wholesale electronic banking is such a banking system where banking
activities are performed through inter-bank networks.
1. Cash management:
Raise the speeding up of collection of cheque and bills payable
Careful controlling of the cash disbursement
Monitoring of cash flows
Investing the idle money
Wholesale Electronic Banking:
2. Wire transfer.
Wire transfer is a process in which funds are transferred from render to receiver
quickly and in due time. These types of transfer could be done within or
outside the country. Wire transfer activities of electronic banking system
include the following four stages:
Payment ordering parties:
Payment ordering mechanism.
Payment processing and delivery.
3. Corporate clearing house:
By clearing house, financial institution clear and
exchange their electronic payments. Cash
concentration strategy through ACH is very
popular and widely used service. Corporations are
going for ACH service after considering financial
the facilities (Cost reduction, receipt of funds within
one day etc.)
Customers need an Internet access service for
accessing such kind of banking system. The
customer will have an ID and confidential/secret
password so that he/she can access their own
account and transaction as an International
Banking customer. Here customer can access the
ledger balances, transfer of money, request
something towards bank, and order a goods
against this account
1. Electronic money:
electronic money includes-
Electronic debit and credit system.
True digital money.
2. Electronic commerce:
now e-commerce is an important aspect of internet banking. Auditing, payment of bills,
investments, stock exchange activities and many other activities can be done using these
internet banking systems.
3. Digital currency:
digital currency has a lot of features like traditional currency. It does not require approval of
banks or their party to make payment. Clients by metaphorical cash taken from participating
bank. This electronic coin can be used like traditional coins from local hard drive in which is
stored. Through this way, buyers and sellers can transfer funds without any help of third party
and other financial institutions
Selecting concept of internet
24 hours cash deposit and withdrawal facility.
Quick cash withdrawal without having queue.
Account activities enquiry in any moment.
Statement request through ATM/debit/credit
Transfer own funds to other account number in
Present balance enquiry.
More than 16 hours shopping facilities.
Deposit or mail cash or cheque through
The common features of electronic banking in Bangladesh:-
Changing personal identify number.
Cash deposit which will originally deposit very next day of
deposit that means do not need to go to the branch for every
Mini statement which contain 8-10 previous transaction records.
Can able to pay utility bill.
Withdraw money by using visa, plus, master, maestro and other
Withdraw money from dollar account which gives take by
converting foreign currency.
The main problem of introducing electronic banking in Bangladesh is
in efficiency and lack of adequate knowledge of the bank management
about the e-banking.
Lack of proper strategic plan to gain and retain market share of the
indigenous banks. In addition, much bank management is not inclined
to give services with electronic means.
Lack of international standard channel. Bangladesh inter-district
telecommunication system, countrywide data communication system
moreover, branch offices cannot be linked with their head office
through single networking based on online real time basis.
Problems of introducing electronic banking in
Lack of attractive remuneration to the technocrats. This
motivates them to go abroad for higher remuneration.
Inadequate budget for establishing back and front office.
In fact, it requires systematic and planned budget for
Lack of comprehensive legal structure is one of the
problems in implementing e-banking in Bangladesh.
However, the people of villages are illiterate and they
are not habitude of using electronic banking.
Government should create a congenial environment so that all
government and private sectors could the benefit.
Provide adequate training and technological support to
develop the manpower/ personnel working in the e-banking
section need to be arranged by the management of
government and private authority.
Developing the national as well as the international
communication standard for providing e-banking services
Banks should have their own strategic plans for
automated market development.
Developing of integrated e-banking software
within a short period of time.
A standard carrier design needs to be formed for
the computer experts within the bank.
Clearing house operations are demanded to be
Countries legal structure also needs to be
In this age of information technology and competitive world,
banking sections should be modernized. In order to keep pace
with the changing world we have to replace our traditional
banking systems by electronic banking systems. It has been
found that local private and state owned banks are not doing
well s compared to foreign banks. Foreign banks are using
new technology and they are earning more. The banking
sectors of our country should use electronic banking system so
that they can provide more services to their customers and
earns sustainable amount of money to support the national