GROUP - F
Lecturer, Faculty of Business Studies
Premier University, Chittagong
Avijit Biswas- 0818112945
Section : „G‟
E-banking is a form of Banking where funds are
transferred through on exchange of electronic signals
between financial institution, rather than exchange
of cash, checks or other instruments.
The following chart exhibits the definition of E-Banking.
Other Online finance
Service & Products
Electronic Fund transfer
For many consumers, E-Banking means 24 hours access to cash
through an ATM or direct deposits of Paychecks in to checking
& saving account.
Electronic Banking can be defined as- “an Umbrella term for the
process by which a customer may per for banking transaction
electronically without visiting a brick and mortar institution.”
E-Banking is the waves of the future. It provides enormous
benefits to consumers in terms of cash and cost of transactions,
either through internet, telephone or other electronic delivery
Through E-Banking smaller banks could compete by offering
portals to the services offered by larger banks. Bank could use
E-Banking in order to gain competitive advantage.
Present status of E-banking in Bangladesh
E-Banking satisfied customer demand in Banking
activities electronically throughout the would. At
present, several private commercial banks (PCBs)
and Foreign commercial Banks (FCBs) in Bangladesh
offering services of Tele-banking, internet Banking
and online banking facilities within the branches of
individual Bank in a closed network environment. It
is expected that banking can earn profit and offer
better services to its customers by introducing online
Banking facility more and more.
E-banking and Bangladesh
Foreign banks through successful use of a global network have
increased timeliness and accuracy of information, benefiting its
customers, employees and also management.
A broad spectrum of E-banking services, a subset of electronic finance,
is available in Bangladesh with different degree of penetration.
Eastern Bank Limited
Eastern Bank Limited Internet banking application addresses the needs of small,
individual and corporate account holders of the bank. This application provides a
comprehensive range of banking services that enable the customer to meet most
of their banking requirements over the net. . The transactions that are supported
by the internet banking provided by Eastern Bank Limited are Account operations
and Inquiries, Fund Transfers and Payments, Utility Bill Payments Deposits,
Loans, Session Summary etc.
Bank Asia symbolizes modern banking with innovative services in Bangladesh. It has
centralized Database with online ATM, SMS and Internet query service. Bank Asia has
21 ATMs as a member of ETN along with eleven other banks. It is 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,
without the requirement for a separate account.
BRAC Bank deployed a layer of security system for its Internet Banking. BRAC Bank
uses 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 is secure and cannot be accessed by
any third party.
Business Banking Account enables a person to receive credit of all the cash or
cheque deposits along with inward remittance and make all local payments and
provide access to the wide range of services for the business requirements. With
Easy Pay Machines both HSBC and Non-HSBC customers can make deposits and
pay their utility bills, credit card payments and etc.
Standard Chartered offers the client a comprehensive range of Cash Standard
Chartered offers the client a comprehensive range of Cash through a wide range
of operating systems, sweeping transaction accessories with the provision of
reporting features or other special functions.
Status of Bangladesh in Adopting
It is imperative for the Bangladeshi commercial banks to embrace the
latest technological changes in offering banking services. More and
more banks now using different software to do their banking
operations (Table 1), 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.
Name of the banks
Arab Bangladesh Bank
Bexibank 4000+, PC
System, Flora Bank.
National Bank Ltd.
BEXI Bank 4000+,
BEXI Bank 3000+,
A2Z, and Flora Bank
The City Bank Ltd.
Islami Bank Bangladesh Ltd
Bangladesh Krishi Bank
IBS and Flora Bank
IFIC Bank Ltd.
BEXI Bank 4000+
BEXI Bank 3000+
United Commercial Bank Ltd.
BEXI Bank 3000+
Dutch-Bangla Bank Ltd.
Standard Chartered Bank
One Bank Ltd.
Bank Asia Ltd.
BRAC Bank Ltd.
The Trust Bank Ltd
The Premier Bank Ltd.
PC Bank 2000
BASIC Bank Ltd
According to a report published in the Daily Star (4th April 2010) Bangladesh ranked 118th in
the global Network readiness index in 2009-2010 up from the 130 years ago, showing as
upward trend in the information and communication sector. In South Asia, India ranked 43rd
Sri-lanka 72nd, Pakistan 87th and Nepal 124th in the “Global information technology report
2009-2010” released by “The world Economic Forum (WEF) on (3rd April, 2010). As
Bangladesh has to go a long way to develop its Network for arranging Digital Bangladesh by
the year 2012 and public and private cooperation and statistic alliance is required to develop
E-business system in the country.
The Finance minister recently argued a trial launching to operation of the country’s first ever
wireless broad bank technology “WIMAX”. He hoped that the “WIMAX” technology will be
available at every divisional headquarters within a year (http://www.bangladeshinfo.com)
Various products and forms of E-Banking:
Automated teller machine (ATM): An ATM is simply a data terminal with two input
and four output devices. Line any others data terminal, the ATM has to connect to,
and communicate through, a host processor. The host processor is analogous to an
interest service provider (ISP) in that it is the gateway through which all the
various networks becomes available to the cardholder. ATM has two input devices
card reader and keypad. For output devices Speaker, Display screen; Receipt
printer, cash dispenser.
SMS Banking: SMS Banking allows to do some Banking enquires on mobile
phones. It is development to provide transactions related to client’s card account
via SMS. The above transaction contains the followings.
A type transaction
Individual access code for working with SMS-Banking
A sum to be paid (if payment transaction)
Identifier of payment (debt)
Identifier of data.
Tele banking :
Tele-Banking is a form of remote banking which is essentially the delivery of branch
financial services via telecommunication devices where the bank customer can perform
retail transaction by dialing a touch-tone telephone which is connected by utilizing
Automated voice response technology, Tele Banking requires the Account number, PIN a
push button telephone etc. It provides following services.
•Checking account balance
•Interest rate related to information.
Online banking also called internet Banking. It is a term used for performing transactions,
payment etc over the internet through a banks secure website.
1. Star up may take time
2. High transaction speed
2. New Bank site changes
3. Efficient and much More effective
3. Matter regarding trust.
Any Branch Banking:
It is the service where an account is accessible from any branch of a particular bank. Now-It
is widely known as on-live banking in BD.
Virtual banks are banks without bricks. They exist entirely on the internet, where they offer the
some range of services and adhere to some rulers and regulation of central banks.
Banks have grown up relations with many international financial agencies to masters the flow
of remittance into the country from the expatriates working in foreign countries some exists in
Bangladesh like western money union transfer, Money gram, X press Money.
Call centre affairs a wide range of banking services through its call centre agents. Customers
are now getting improved services at a reduced cost. Available services areAccount related Services: Balance inquiry duplicate statement, cheque book request, ATM,
loan outstanding etc.
Deposit accounts, personal loan, savings and current accounts, debit card, rates and tariff
inquiry, exchange rates, lending rates, deposits rates etc.
A debit card is a plastic card which provides an alternative payment method to
cash while making purchase. The amount of transaction is typically displayed on
card reader, after which the customer swipes the card then enters their PIN
Credit Card :
A credit card is a system of payment name after the small plastic card issued to users of
the system. A credit card is different from Debit card in that if does not remove money from
the user’s account after every transaction.
Future Challenges Posed by bank:
E-Banking is definably beneficial to all the customer but it is not apart from its
demerits. There are various challenges Bank may face in future due to following
reasons.The main challenge bank may face due to increased number of hacker. Any time
they can Hack any customer’s account. So this Hacking problem has become the
major challenge to the banker.
Another challenge is the technical (Software) problem. Due to software problem
network does not work efficiently. To solve this problem is another challenge for the
Due to electricity problem transaction are not performing smoothly.
To continue the transaction IPS is required. So, transaction cost is increasing.
Problems of the E-Banking
Bangladesh companies are facing problems to state full swing E –banking. According to a
report published in The Daily Star (4th April, 2010) Bangladesh ranked 118th in the global
network readiness index in 2009-2010 up from 130th a year ago, showing an upward trend in
the information and communication sector. Policy maker of the country are not aware about
the benefits of E-banking. As such they don’t put significance on proper and systematic
development of the process of E-Banking.
At present the banks of Bangladesh are using limited electronic Banking services. It is
expected the Bank can attain profit and offer better services to its customers by introducing
online banking facilities.
Credit card Facility full can not be extended in the country.
Inefficiency and inadequate knowledge of the bank mgt about the online banking.
Lack of proper strategic plan to gain and retain market share of the indigenous banks.
Lack of international standard communication channel.
High cost of establishing online banking system.
Inadequate back and front office mgt.
Lack of integrated plan among the bank and central bank authority.
Inefficiency clearing house facilities.
Recommendation to prosper E-Banking
To implement E-banking successfully in Bangladesh following recommendation are
Career path of hardware and software engineers should be property designed.
The clearing house operating Operation should be fully automated system.
Initiatives to develop E-banking software through in house built may be taken.
Banks should have their own strategic plans to implement the online banking system.
The country needs to develop E-business with the help of ICT facilities.
Public and private participation (PPP) for E-business should be encouraged for
E-business can help to improve total quality mgt this can also ensure quality
assurance of the business sector.
To find out the viability of a particular product we must perform a SWOT analysis of the
product. This will analysis the strengths, weakness, opportunities, and threats of the particular
product. For analysis the performance of internet banking in Bangladesh we the following
SWOT analysis is considered.
•Internet Banking is new in our market. Only a few banks are now offering internet service 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 service. So this product will enjoy the benefit of a first mover.
•It is cheap both for the banks and the customer. 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 abele to save time as well as money for their transaction
•Internet banking is convenient as the service is available all the time at just.
•Securities 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 purpose 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.
•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.
•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
Findings of the study
Present status of various forms of E-banking in Bangladesh: Total 40
Banks (both pubic and private commercial banks) who use E-banking
are given through diagram.
Various forms of E-banking services
Number of Banks Having
online modes of service
Electronic Fund transfer
22/40 = .55
Internet Banking & Wap
21/40 = .525
Any Branch Banking
Point of Sale service
Customers’ Response who have been using on line banking system (%
of Respondents who expressed “Yes” comment)
On line Banking services is relatively good than
On line banking provides good Customer service
Just in time services in Banking can be provided
Bank Personnel behave properly
Dealing officer is well conversant about their
respective Desk work
Technologically improved but quality of banking
services worsen off
Better E-business environment
The present status of-e-banking is not satisfactory in case of virtual
banking, call center and SMS banking. Major reason is the security
concern. A few problems have been experienced by the IT heads in the
banks such as withdrawal of money beyond the limit. This has taken place
at ATM booths because there is agreement between banks regarding
networking sharing. Gigantic fraud does not take place because there is
limit is ATM debit and credit to withdraw money from the banks.