5000.ppt

Department of Finance & Banking
Project Paper & Defense On
Card Banking and Its Impact in Bangladesh
Present as part of the Curriculum of BBA Hon’s (Final) 4th
Year
Session: 2019-2020
Submitted To:
Md. Salahuddin
Head of Department
Govt. Titumir College, Dhaka
Submitted By:
Md. Miftahul Islam Fahim
BBA Hon‘s (Final) 4th
Year
Class Roll No: 5812
Reg. No: 18724020010
Session: 2017-2018
Govt. Titumir College, Dhaka.
Affiliated University of Dhaka
Date of Submission: 23rd October, 2022

LETTER OF TRANSMITTAL
Date: 23rd October, 2022
To
Md. Salauddin
Head of Department
Subject: Submission of the Term Paper on Card Banking and It’s Impact in Bangladesh
Dear Sir,
This is a great pleasure for me to submit this successful Project paper upon Card Banking and It’s Impact in Bangladesh
During my working period, I went through various places. I have tried my level best to prepare the perspective of Card Banking and It‘s
Impact in Bangladesh”. I have gathered a lot of practical knowledge to prepare this term paper. Through this purpose I have been able to
know the actual market scenario. I think this is a great achievement for me as a student. I would feel really great if this term paperis of any
use.
Finally, I would like to thank you for valuable guidance & supportive in preparing this term paper. I would be grateful for any clarification
when required and highly obliged if you approve this term paper and provideyour valuable judgmental on it.
Yours faithfully
…………..........…....................
Year
Class Roll No: 58212
Reg. No: 18724020010
Session: 2017-2018

DECLARATION
I do hereby declare that this report titled “Card Banking and It’s Impact in Bangladesh” has been written by
me under the valuable guidance of Md. Salahuddin, Head of Department, Department of Finance &
Banking, Govt. Titumir College, Dhaka in fulfillment of the requirements for the award of BBA Hon‘s
(Final) 4th
Year. I am also declaring that I have not submitted this report for any degree, diploma and title
recognition before.
…………..........…....................
Year
Class Roll No: 58212
Reg. No: 18724020010
Session: 2017-2018

CERTIFICATE OF SUPERVISOR
This is to certify that the dissertation or research monograph on “Card Banking and It’s Impact in Bangladesh.”
is done by Md. Miftahul Islam Fahim, Class Roll No: 58212, Reg. No: 18724020010 in partial fulfillment of the
requirement for the degree of BBA Hon‘s (Final) 4th
Year from Govt. Titumir College.
The dissertation has been carried out under my guidance and is a record of the bonfire work carried out
successfully.
.......................................................
Md. Salauddin
Head of Department

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ACKNOWLEDGEMENT
All praises go to omnipotent Allah for enabling me to complete the report with good and sound health.
At the very outset of acknowledgement I would like to offer my gratitude to some people who have
made major contribution to make this report possible. First of all, I am indebted to the Dhaka University
Authority for giving me such an ideal opportunity to prepare this report.
Special thanks go to my honorable Supervisor Md. Salahuddin, Head of Department, Department of
Finance & Banking, Govt. Titumir College, Dhaka for her continuous guidance, supervision in preparing this
report.
I also express my deep gratitude to all the teachers of our department for their kind co- operation.

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ABSTRACT
In Bangladesh, Banking industry is mature to a great extent than earlier period. It has developed superb image in their various
activities including electronic banking. Now modern banking services have launched by some multinationals and new local
private commercial banks. Electronic banking is one of the most demanded and latest technologies in banking sector. This paper
tried to unearth the present status of electronic banking in banking sector in Bangladesh. However, much of the resulting
research has concentrated on providing evidence of the association between consumers’ usage patterns of ATMs and
their demographic profiles and, more recently, consumer psychographic profiles . Besides, the banking services of
nationalized, private, and are different by quality of their services. Banks are offering better services than others. They offer
better customer services, personal financial services, corporate facilities, trade services with the help of efficient
operational department, credit department, information technology department and the most important department is the
marketing department. Presentlythey are thinking to offer door-to-door services, 24 hours banking services with electronic
banking,pay and cash management through internet services. Moreover, waiting to introduce intensive embanking of the
banks in Bangladesh. Customer always demands better services, security, and round the clock banking. Banks are
considering customer needs and demand in the first line of preference. Moreover, trying to offer and introduce the
demanded services by the Bank and changing their offering based on the needs of present and potential customers.

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Table of Contents
Chapter One INTRODUCTION
Introduction. 02
Statement of the Problem 03
Rationale of the Study 03
Objectives of the Study 03
Limitation of the Study 04
Chapter Two CONCEPTUAL ISSUES
Bangladesh Bank goes all out to inject cheaper money into economy 05
Definitions of Terms Used in Card Banking 06
Present Status of Card Banking 08
Prospects of Card Banking 08
Chapter Three DATABASE
Methodology 09
Sources of Data 09
Questionnaire Research flow chart 10
Research type 10
Questionnaire Design 10
Chapter Four FINDINGS AND ANALYSIS
Card Used Current Scenario of Card Banking in Bangladesh 11
Cards of Card Banking 12
Service Provided By Bank of Card Banking 14
ICT Operational Guidelines and Its Compliance by Card Banking 14
Payment Ecosystem in Bangladesh Challenges and Opportunities 16
Growth of ATM system by Card Banking (Year to year increase) 22
Growth of ATM system and its effect in profitability of Card Banking 22
Customer Satisfaction of Card Banking System 23
Service quality of Card Banking ATM services 24
Card Banking and It‘s Impact in Bangladesh 25
Findings 26
Chapter Five RECOMMENDATIONS ANDCONCLUSION
Recommendations 28
Conclusion 29
References 34

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Chapter One
INTRODUCTION
1.1 Introduction
The commercial banking business has changed dramatically over the past 25 years, due in large part to technological change. (1) Advances in
telecommunications, information technology, and financial theory and practice have jointly transformed many of the relationship focused
intermediaries of yesteryear into data-intensive risk management
operations of today. Consistent with this, we now find many commercial banks embedded as part of global financial institutions that engage in a wide
variety of financial activities. To be more specific, technological changes relating to telecommunications and data processing have spurred financial
innovations that have altered bank products and services and
production processes. For example, the ability to use applied statistics cost-effectively (via software and computing power) has markedly altered the
process of financial intermediation. Retail loan applications are now routinely evaluated using credit scoring tools, rather than using human judgment.
Such an approach makes underwriting much moretransparent to third
parties and hence facilitates secondary markets for retail credits (e.g., mortgages and Card Banking receivables) via securitization. (2) Statistically
based risk measurement tools are also used to measure and manage other types of credit risks – as wellas interest rate risks – on an ongoing basis
across entire portfolios. Indeed, tools like value- at-risk are even used to determine the appropriate allocation of risk-based capital for actively
managed (trading)
portfolios.
This chapter will describe how technological change has spurred financial innovations that have driven the aforementioned changes in commercial
banking over the past 25 years. In his respect, our survey is similar to that of Berger (2003). (3) However, our analysis distinguishes itself by reviewing
the literature on a larger number of new banking technologies and synthesizing these studies in the context of the broader economics literature on
innovation. In this way, the chapter is more like our own previous survey of empirical studies of financial innovation (Frame and White, 2004). We note
that this surveyis U.S.centric, owing to our own experiences, the fact that many financial innovations originate in the U.S., and that most studies of
such innovations rely on U.S. data. Before proceeding, it will be helpful to understand better what is meant by financial innovation.

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2. Statement of the Problem
The report mainly focused on the evaluation of Electronic Banking system in
Bangladesh: A case study on Card Banking. I have mainly focused on the analysis of electronic bankingthat is growth of ATM,
deposit, profit, customer satisfaction and also focused detection and prevention of fraud is an extremely important form of
risk management in the Card Bankingsystem.
3. Rationale of the Study
Today‘s world is service oriented in every sector. Those who are giving much more services
rather than others are giving; they will be well ahead of competition because of getting better competitive advantages. There are
60(51 local;09 foreign) different banks working togetherin Bangladesh. The competition is going up day by day by giving better
services and they are trying to develop their own services every now and then. Electronic banking is known to us since 1990.
Electronic banking has got tremendous importance in Card Banking. and banking customer as well. This is why, the
researcher finds some interest to explore something regarding the advancement of Technology in the banking sector.
4. Objectives of the Study
There are two main objectives behind this report. The Primary Objective of the study is
to fulfil the partial requirement of the BBA program. In the final semester of our BBA programone thesis report is to be
submitted. An oral viva will be held on this report.
The secondary objectives of the study are to provide:
1. To get a broader overview of Electronic Banking,
2. Importance of Card Banking Activities from an organizational perspective,
3. To identify the activities served by ―Electronic Banking Activities‖.
4. To know the types of services which Card Banking provides electronically.
5. To learn the operations of ATM machine.
6. To learn the basic requirement of the bank for providing Card Banking facilities forthe customers.

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5. Limitation of the Study
There has no plethora research work in Bangladesh perspective particularly. The study covered a very limited number
of organizations and respondents as well. Some respondentswere neither motivated nor interested in expressing their
honest opinions. The scope of the study was also constrained by limited available self-funding. The following
limitations are apparent in the report—
1. The main Limitation of this report is that it‘s not possible to disclose all data andinformation for the
reason of confidentiality.
2. The bank‘s employees were very much busy in banking hour. So it was very difficultto have them
for equitable long time.
3. In some cases they could not able to providing me about my topics related data forpreparing a more
depth research study.
4. I carried out such a study for the first time, so inexperienced is one of the mainconstraints of the
study.

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Chapter Two
CONCEPTUAL ISSUES
1. Bangladesh Bank goes all out to inject cheaper money into economy
1. BB monetary policy and policy stance remain expansionary for FY22 with all growth support without hampering inflation target of 5.4% to 5.56
percent.
2. BB proposes to cut in overnight Repo rate from 5.25 percent to 4.75 percent to makefunds available to banks at cheap price
3. Reverse Repo rate cut from 4.75 percent to 4 percent
4. Bank Rate unchanged for 17 years reduced from 5 percent to 4 percent
5. Monetary policy faces risk factors in terms of COVID-19, price volatility, globaleconomic downturns, floods and cyclones
6. Projected output growth is found to be on target if Covid situation improves andglobal and domestic economy recovers
7. Significant inflationary pressure not expected. FY22 inflation range to be 5.04percent to 5.93 percent.
8. Deficit in current account balance is expected to slightly deteriorate
9. Admits that remittance might not be sustainable
10. If NPL cannot reduced it would have long-term bad impact
11. Taka remains slightly overvalued
12. Expects stocks to rebound in view of supportive monetary policy
13. Money velocity may fall further in FY21 for Covid-19
14. Public sector credit to expand by 44.4 to 32.6 percent and private credit by 14.8percent
The Bangladesh Bank on Wednesday announced an expansionary monetary policy for the fiscal year 2021-22 that aims at pumping cheaper
money into the economy for the post pandemic recovery.
As part of that objective, the central bank went for a 50 basis-point cut in its overnight repo rate to make cheaper money available to the banks for
lending.
At the same time, it has cut the reverse repo rate by 75 basis points so that it can also take
money from banks at a lower rate and thereby influence the market in a downward direction. Both the steps will make funds less costly.

"Moreover, the bank rate which remained unchanged for the last 17 years [since 2003] has also been considered to be reduced
from five percent to four percent to rationalise it with the current interest rate regime," the central bank's monetary policy
statement (MPS) said. A bank rate is the interest rate at which a nation's central bank lends money to domestic banks, often in the
form of very short-term loans.
"The Bangladesh Bank's monetary policy stance and monetary programmes for FY22 are essentially expansionary and
accommodative for all growth support needs without impairing attainment of the targeted inflation containment," it said in its
monetary policy statement. The previous overnight repo rate was 5.25 percent which will now be 4.75 percent and reverse
repo rate was 4.75 percent and reduced now to four percent.
A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a
dealer sells government securities to investors, usually onan overnight basis, and buys them back the following day at a slightly
higher price.
Central banks use reverse repos to add money to the money supply via open market operations.
2.2 Definitions of Terms Used in Card Banking
Electronic banking is an umbrella term for the process by which a customer may perform banking transactions electronically
without visiting a brick-and-mortar institution.
E-Money
E-money includes electronic debit and credit system, smart card. The smart card has been defined many ways, but is
generally defined as ―portable data storage device with intelligence (chip memory) and provision for identity and security.
Smart Cards
A smart card is a physical card that has an embedded integrated chip that acts as a security
token. Smart cards are typically the same size as a driver's license or credit card and can be made out of metal or plastic.
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Automated Teller Machine (ATM)
An ATM is simply a data terminal with two input and four output devices.
ATM has two input devices- card reader and keypad. An ATM has four output devices- Speaker, Display screen, Receipt
printer, cash dispenser.
SMS Banking
SMS- Banking is developed to provide transactions related to client‘s card account via SMS.
Online Banking
Online Banking (Card Banking Fraud) is a term used for performing transactions, payments etc. over the internet through a
bank‘s secure website.
Call Center
Call center is a streamlined customer interface and offers a range of banking services through its call center agents.
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3. Present Status of Card Banking
Card Banking at per international standard is yet to develop in Bangladesh. At present, several private commercial banks (PCBs) and foreign
commercial banks (FCBs) offer limited services of Card Banking, Card Banking, and Card Banking facilities working within the branches of
individual bank in a closed network environment. As a part of stepping towards Card Banking, the FCBs have played the pioneering role with adoption
of moderntechnology 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. Moreover, the banking industry as a whole, except for the four specialized banks
(SBs), rushed to offer technology based banking services during the middle of the current decade. The existing form of Card Banking that satisfies
customer demand in banking activities electronically throughout the world are e banking or e home banking that include Card Banking,
mobile banking, and sms banking.
4. Prospects of Card Banking
Card Banking is now a global phenomenon. Apart from the developed countries, the
developing countries are experiencing strong growth in Card Banking. The Bank of Thailand has created an industry payment body to involve
other stakeholders, in particular from commercial banks which take leading responsibility for the development of e-paymentsystem and
technologies. Card Banking in Korea has increased at a rapid pace. Korea is alsoleading in online brokerage and mobile banking. In Southeast
Asia, Card Banking is also developing rapidly in Thailand, Malaysia, and Singapore and to a lesser extent in Philippines(Mia et. al. 2016). In Nepal,
ATMs are the most popular electronic delivery channel for banking services but only a few customers are using Card Banking facilities.
Among others, Nepal‘s commercial banks have adopted Card Banking, e-Card Banking, and SMS-banking.
Call Center
Call center is a streamlined customer interface and offers a range of banking services throughits
call center agents. Customers are now getting improved services at a reduced cost in an exciting manner. Available services at call center are:

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Account related services
Balance inquiry, transaction inquiry, duplicate statement, cheque book request, ATM/Debitcard hot listing, and
loan outstanding etc.
Product Information
Deposit accounts, Personal loan, Savings and current accounts, Debit card, Rates and
tariffInquiry, exchange rates, lending rates, deposit rates, tariff etc.
Other Services
Complaints handling, account opening procedure, Bank Information, change request etc.

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Chapter Three
DATABASE
1. Methodology
The study has been done mainly based on primary and secondary sources of data or information. Secondary sources of data have been
obtained through different web sites , books and related journals. The study covered 5 different Multinational, private commercial banks, which
mainly situated in the capital city of Dhaka in Bangladesh. Some of the
respondents were in the capital city of Dhaka. Data have been collected through a structured questionnaire.
Here includes the steps of conducting the report and the explanation of the sources of data:
Data Collection:
Mainly two types of data based on the source of information:
Primary data and Secondary data.
2. Sources of Data
The information and data for this report have been collected from both the primary and secondary sources.
 Primary sources:
 Primary has been collected from Dhaka based on some selected banks Card Banking. These banks are considered as the private
commercial banks and foreign banks respectively. Primary data collections are done by the interviewing method with proper
questionnaire.
oFace to face conversation with the respective officers and stuffs of the branch.
oFace to face conversation with clients visited the office.
oPractical work experience in the different desk of the department of the branch covered.
oRelevant field study as provided by the officer concern.

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Secondary sources:
Secondary data has been collected from different publications, material and website as wellas
the books and material from different libraries, the hand note of the various seminar and research related to the issue are taken into
account that includes the library of Card Banking.
oDaily diary (containing my activities of practical orientation inCard Banking)
oVarious publications on bank,
oWebsite of Card BankingBangladesh.
oWebsite of Bangladesh bank,
oAnnual report of the bank,
oPersonal investigation with workers.
3. Questionnaire Research flow chart
Questionnaire research design process in an orderly and specific manner. The flow chart was
used for the successful completion of research process. There are two feedback loops in the flow chart to allow revisions to the methodology
and instruments.
4. Research type
This is a research, which briefly reveals the overall activities of the Card Banking. Limited and also critically analyzes the ―SME
Department‖ of this Bank. To prepare this report all the necessary information collected from both primary and secondary sources of data.
5. Questionnaire Design
Questionnaire was prepared with both open and close ended questions. The target population
was business persons or clients who are facilities of Card Banking. Ltd. The total sample was clients of Card Banking. Ltd, Main Branch.

Chapter Four
FINDINGS AND ANALYSIS
4.1 Card Used Current Scenario of Card Banking in Bangladesh
Electronic banking is relatively new concept in Bangladesh. Formerly only the foreign banks operating in Bangladesh like Card Banking.,
HSBC, etc provided it. These foreign banks
managed to gain competitive advantage with the introduction of electronic banking for the first time in Bangladesh. As result the local
commercial banks started to loose their marketto
these foreign commercial banks. So they reacted very quickly. First time it was combined,now some of the banks are offering Electronic-banking
services even solely. Eastern Bank Ltd. is
the leading local commercial banks in Bangladesh to offer worldclass electronic banking services. In terms of adoption of Card Banking,
we can divide our banking sector in to three basic categories
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Classical bank includes those commercial banks, which don‘t provide or provide very littleCard Banking facilities. In our country these category
mainly includes –
•Nationalized Commercial banks Specialized banks
•`Local private commercial banks
These banks are termed as classical because this Bangladeshi banks still now mainly follows
the manual procedure for securing the valuable information and assets of customers. Except Agrani bank and Janata bank these banks are still in
infant level automation. Both of these
two banks has launched ATM card sharing with other banks and EFTS like Ready cash, QCash other than these two facilities, these
banks has no other e-banking facilities like mobile banking, Home banking, e-Card Banking. All the NCBs in Bangladesh use the
software named as core banking. Besides this they also use two most widely used software named SLS COMMERCE and FINASTRA.
These classical banks have no centralized database system. As a result they always lack the required effective coordination among different
units, required information to make right decision at right time, incurs high overhead costs. The branches of these classical banks are

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not connected through LAN or WAN or MAN. The proper coordination and harmonization between branches and head office
of these banks are very much weak. They cannot take proper decision at proper time and manage their loans and deposit
portfolio achieved client satisfaction. Services provided by these banks in the classical stage are outdated and lacks the
competitiveness.
But it is a matter of hope that the top management of these commercial banks is seriously thinking about full automation
of their operations both at the branch level and at the head office level. But to do this they face some common problems like –
• Huge Number of branches all over the Bangladesh even outside the country and forthe purpose of
automation huge investment is necessary.
Most of the branches are in the rural areas where there are no modern digital communication facilities.
Most of the users or clients of the banks are poor and uneducated village people having no
knowledge about electronic banking and cannot afford it at the current cost level.
Most of the officials of these banks in the classical stage especially the state ownedones are aggie and cannot
understand and are reluctant to accept modern electronic banking. To turn around these banks at first the
outdated mentality of these officialsof the classical banks.
•
•
•
In spite of these shortcomings all these banks in the classical stage are trying to convert themselves into the modern
electronic banks and make them able to compete with other commercial banks
4.2 Cards of Card Banking. DEBIT CARD
A card allowing the holder to transfer money electronically from their bank account when making a purchase. At present
there are over 150,000 + cards in the hands of the customers.At
the moment, the total card market size (approx.) in Bangladesh is 7 lac. Among these, Card Banking is having around 20%
market share with 150,000+ cards.

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Card Banking Debit card products are:
▪Visa debit card;
▪MasterCard debit cards;
▪Rupay Debit cards;
▪Visa Electron Debit Cards;
This most secure, convenient, and reliable forms of payment that enable consumers to freely conduct withdrawal of cash from Card Banking ATM
network and purchase at Card Banking 2008 POS Terminals.
CREDIT CARD
A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company, that allows cardholders to borrow
funds with which to pay for goods and
services with merchants that accept cards for payment. Credit cards impose the condition that cardholders pay back the borrowed money, plus any
applicable interest, as well as any additional agreed-upon charges, either in full by the billing date or over time. With this card, the cardholders can
take credit facility from Tk.10, 000/- (ten thousand) up to Tk.2, 000,000/-
(twenty lac) depending on credit worthiness.
Credit Card Banking products are:
•Standard "Plain-Vanilla" Credit Cards;
•Balance Transfer Credit Cards;
•Rewards Credit Cards
Eligibility for Card Banking: The applicant has to be an accountholder of a Bank. They should belong to any of the following categories:
•Employees of different corporate bodies that have salary account with Card Banking;
•Government service holders;
•Valued clients of Card Banking;
•Employees of Banks, Financial Institutions, Multinational Companies,

USER OF Card Banking ATM CARD
The following persons generally use the Card Banking ATM card-
•Retailers,
•Students,
•Professional peoples,
•Service Holders & many more.
3. Service Provided By Bank of Card Banking
Through ATMs: By using the Card in ATM booths anywhere in the country, the valued customers of the bank can perform the following functions at any time-
• Account balance enquiry
• Mini statement printing
• Statement request
• PIN (Personal Identification Number) change
• Request for Cheque Book
• Fund transfer within his/her own accounts
• Cash withdrawal – 24 hours a day, 7 days a week, 365 days a year
• Cash deposit to some designated number of ATM‘s any time
• Payment of mobile/T&T phone, Gas, Electricity, Water, Internet, Card Banking billsfrom customer‘s Savings/Current account.
Through Internet:
Through the Card Banking, the following can be performed:
• Checking of account balance
• Print-out of account statement for a particular period.
• Transfer of fund within the customer‘s own accounts
• Payment of mobile/T&T phone, Gas, Electricity, Water,
Internet bills fromcustomer‘s account.
• Payment of School/College/University fees by debiting one‘s account Purchase ofactivation number for mobile/internet pre-paid cards.
• Deposit of loan installments Stop Cheque payments
• Opening of an FDR account by debiting one‘s Savings/Current/STD account

4.4 ICT Operational Guidelines and Its Compliance by Card Banking
The Banking and Financial Industry has undertaken changeable degrees of revolution by
stirring their operating systems to platforms. To address this necessity Bangladesh Bank has taken the initiative to provide the
industry with a guideline of ‗minimum‘ security standards.
Let‘s check out the guidelines of BB and how Card Banking complies with those:
Table : The ICT guidelines by BB and compliance of Card Banking
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Guidelines of BB Compliance by Card Banking
IT Management:
•IT Management must ensure
that the IT functions are efficiently & effectively managed. IT
Management deals with – IT policy Documentation.
•Internal IT Audit.
•Training and Insurance.
Card Banking has the largest IT budget in Bangladesh. Card Banking maintains the
stateof- the-art Electronic-Banking Division. The Electronic-Banking Division
oversees and maintains Card Banking's investment as well as implementing upcoming
projects.
A. Internal IT Audit:
•Sufficient IT expertise / resourcescapable of conducting IT Audit.
•Periodically at least once a year.
Card Banking maintains the state-of-the-art Electronic-Banking Division. This Card
Banking division has the richest IT expertise and resources for internal audit.
B. Training and Insurance:
Related employees should be given
Adequate training on IT Tasks. Allthe network users should be train
Operating and security procedures.
In Card Banking division, some of the major personnel are well trained from abroad on IT
and its application in banking. They provide proper training to the newly recruited
employees.
C. Fire prevention:
The Data Centre wall/ceiling/door should be fire resistant.
•Fire suppression equipment should beinstalled.
•Procedures must exist for giving theimmediate alarm of a fire.
Information Security Standard: a)Password Control:
b)User ID Maintenance:
c)Input Control:
d)Network Security Virus Protection:
Card Banking‘s ATM booths are well-prepared and those can resist small fire exposures.
Moreover, fire suppression equipments are keptin most of the ATM centers.
Card Banking maintain quality Electric cables in
the Data Centre so that possibility of sparking is minimize.
Card Banking‘s ATM card password pose at least 4 characters, combination of uppercase,
lowercase, numbers & special characters and client can change the password if he/she
thinks it is not safe anymore.
Each user of ATM has a unique User ID and a valid password The User ID will be
locked up after 3 unsuccessful login attempts.
Card Banking division software does not allow the same person to be both.
Unauthorized access and Electronic tampering is
controlled strictly by Card Banking Card Banking Fraud division.

4.5 Payment Ecosystem in Bangladesh Challenges and Opportunities
Digitization of the payment ecosystem is an ongoing practice in economies across the world, as it has the potential to make an
economy more efficient and accountable, while ensuring transparency and plugging leaks. According to an IMF report
Bangladesh’s economy is the second fastest growing major economy of 2018; ranking 32nd among the largest economies of the
world by purchasing power parity. This rapid economic growth entails an added emphasis on efficiency and demands a closer
look into concepts such as Digital Payment System. This system has an impact on other broad areasof the economy. Before
exploring these areas, however, it is important to understand the basic concepts relating to the domain of payment
ecosystem.
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Any monetary transaction requires at least twoparties, namely, payer and payee. The system through which the exchange of value
happens between the payer and payee is the payment system. Value is exchanged using payment instruments like cash,
cheque, card, mobile money etc. The central bank, commercial banks, payment service providers and mobile money
agents are some of the key-actors in the mechanisms. Integration of all these parties to facilitate the transaction between payer
and payee forms the payment ecosystem of a country. If the instrument usedfor the transaction is in digital form, such as cards or
mobile money, the transaction can be termed as a digital transaction. The payment ecosystem of an economy is usually never
static; shifts in technology and cultural factors drive the economic and political gears thattransform conventions in payment
systems.

The rewards of digital payments can be reaped by people from all socioeconomic classes (SEC) and each participant of the economic process can
be categorized as either a payer ora payee. In contrast to people from higher SEC who are already benefitting from digital payments by using cards
or Electronic Fund Transfer, the people from lower SEC classes are gradually adopting mobile money for transferring international and domestic
remittances and for making merchant payments. While digital payment system is well known as a tool for driving financial inclusion, its impact on
the other aspects of the economy is also important. Adoption to digital payments brings higher potential tax revenue accompanied by a reduction in the grey
economy due to lower unreported cash transactions for the Government, which in turn increases transparency and accountability. Businesses are
benefitted from guaranteed merchant payments and individuals have to incur less cash handling co
Now, let’s recap Bangladesh’s foray into the realm of digital payments (Figure 1). In 2002,
Bangladesh joined the massively popular
movement towards digitization of payment system with the initiation of Q Cash services,
providing interoperability among banks,
a shift facilitated by introduction of the first payment switch in
Bangladesh. Major developments in the core banking system include the launch ofBangladesh Electronic Funds Transfer Network (BEFTN) in 2015 that enabled
inter-bank fund transfer and National
Payment Switch Bangladesh (NPSB) in 2012 that started interoperability outside the Q-Cash network. Mobile money was introduced in this market by bKash (a
subsidiary of BRAC bank), while Mobicash (a GrameenPhone initiative) eventually followed suit. These are remarkable milestones for Bangladesh on the
road to digitizing payments.
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While the concept of digital payment is relatively new, the effects of these initiatives are already visible. Government entities,
businesses, individuals and donors together make an estimated 367 million payments per month and 4.4 billion payments per year in
Bangladesh, which translates to approximately USD368 billion annually. 6.24% of the total volume of transactions and 11.83% of the
money in the economy are flowing through digital channels. An estimated 68.97% of the payments in terms of monetary value originating
from the government are made using electronic means. This constitutes around 1.17% of the number of transactions on an annual basis (Figure 3).
In terms of value of payments, only 3.29% of the payments from businesses and 2.61% ofthe payments from the individuals are done
electronically at the moment which presents a tremendous opportunity for the payment service providers and banks.
Considering these empirical evidences, it can be concluded that digital payment ecosystemin Bangladesh is still at the nascent stage, while in
developed countries like Canada, the percentage of digital transactions is well above 50% of the total payment ecosystem. The payment
ecosystem of Bangladesh is illustrated in Figure 2.
Payments in an economy can be categorized into three broad categories, i.e. Few-to-Many, Many-to-Many and Many-to-Few payments.
Few-to-Many payments refer to the disbursement of funds from one entity to multiple individuals or firms through a single payment
transaction. When a firm disburses salary to its employees, it is an instance of one- to-many payment. When many payers pay one single or a few
entities, it’s called Many-to- Few payments (e.g. Utility payments, Tax Payments etc.). Many-to-Many payments happen among individuals
(Person to person payments, i.e. Remittance) and between individuals and businesses (Merchant Payments).
The shift is most apparent in Few-to-Many payments, as adoption from only a few partiesare needed. Hence, in Bangladesh and almost every
country in the world, the shift is observed first in Fewto-Many payments where 9.48% of the Few-to-Many payments transactions are made
electronically which is 17.25% of the total Few-to-Many paymentsby volume.

22
On the other hand, only a fraction of the Many-to-Few payments are made electronically that amounts to USD1 billion or 5.45% of the total value.
Hardly any payments to Government (Taxes, fees etc.) are made electronically by individuals or businesses and only 8.36% of all utility bills are
paid electronically. However, this low percentage is not due to lack of infrastructural support. There are avenues to make numerous types of
Many-to-Few payments electronically. Low percentages in terms of reach of the system and end- user adoption rate only attest to the huge room for
improvement.
Bangladesh has seen a significant shift to electronic consumer spending and electronic remittances after the initiation of mobile money. The
increase in migration from rural to urban areas in search of livelihoods causes continuous flows of money from breadwinners in urban environments
to their families living rurally. A considerable chunk of this large volume of domestic remittances are being transacted through mobile
money. This shift has been very evident in the last 3 years, after MFS became mainstream. Debit card payment usage has grown by 24%
year on year from 2013 to 2017. While the shift to electronic payments is notable, it should be noted that all of these digital transactions,
comprise of only 73 million transactions and just under 10% of all many-to-many payments per annum.
While each of the shifts may occur independently in theory, in reality, one shift is seen to influence the other (Figure 4). For example: the shift starts
with Few-to-Many payments with people and businesses getting paid in bulk via digital means. If the income is then transferred to digital means, it is
more likely that the spending can be done digitally and ifsomeone is paid in cash, they are more likely to spend in cash.

With the increasing usage of MFS for domestic remittance in Bangladesh, people are becoming financially included,
and can now receive and pay money using their mobile wallets. Here, the increase of digitization in Many-to-Many
payments is influencing theother two shifts.
23

Bangladesh has already made progress in the way of making payments more digital and less cash. There has been a lot of direct and
indirect initiatives that the Government is undertaking. The implementation of NID system linked to the Biometric SIM registrationis a
step towards ensuring security and privacy of the payers. While regulatory holes, ongoing OTC usage and absence of interoperability can
be seen as obstacles for digital payments, if we consider the incremental nature of any efficient mass deployment, Bangladesh is
progressing on a constant basis.
4.6 Growth of ATM system by Card Banking (Year to year increase):
Card Banking is the pioneer of all banks in Bangladesh to initiate and develop ATM systemin a much wider way and provide World class
ATM services at quite affordable cost to theof our country.
Table 1 : Growth of DBBLATM system by Card Banking (Year to year increase)
Source: Financial Statements of Card Banking.
Figure 5 : Growth of DBBLATM system by Card Banking (Year to year increase)
Here, we see, after the initial establishment of 32 ATMs at the beginning of 2016, Card Banking‘s effort to establish wide number of ATMs
from year to year increases. And we see, from year 2020 to 2021, Card Banking installed 1000.
24
Year 2016 2017 2018 2019 2020 2021
Num of ATMs 32 85 210 350 700 1000

4.7 Growth of ATM system and its effect in profitability of Card Banking:
The following table shows the growth of profit of Card Banking and after the initiation of ATM system in 2017, how
profitability trend increased:
Table 2: The growth of Profit inCard Banking over the years
Source: Financial statements of Card Banking.
Figure 6: The growth of Profit inCard Banking over the years
The ―Bold‖ amounts show the profit amount of Card Banking from 2017 to 2020 after the initiation of ATM system. From 2016, the
profit trend shows that there was an steady growth of profitability of Card Banking but in the year 2017, it jumped to BDT 367.82
million from
236.35 million, and the growth at that stage is huge, almost 55.63%. And after that, the trend
of increase did not hamper significantly, rather, in 2019, 08, 09 and 10, it increased much significantly. This indicates that the overall
profitability of Card Banking is quite sound now and very much satisfactory and the implementation of Card
Banking Fraud investment is contributing to this increased profitability, that‘s for sure.
25
Year 2016 2015 2016 2017 2018 2019 2020
Amount(TK. in million) 177.6
0
210.16 236.35 367.82 362.18 479.81 821.67
Growth 9.09% 18.33% 12.46% 55.63% -3.98% 32.47% 71.25%

4.8 Customer Satisfaction of Card Banking System
There are many factors that affect customer satisfaction. According to Hokanson (1995), these factors include
friendly employees, courteous employees, knowledgeable
employees, helpful employees, accuracy of billing, billing timeliness, pricing, service quality,
good value, billing clarity and retention.
Table 3 : Using rate of Card Banking Card. Table
competitive
Figure 7: Using rate of Card Banking Card. Table
In this study, my Respondent depend on using rate of Card Banking card, the maximum Respondent
are using card regularly are 70% and the minimum Respondent are using card very frequently are
3%.People‘s response is satisfactory. In this part, I have given a detail description of it. For my
study purpose, I have taken 200 people as sample. Five points rating scale is also used here for
attitude measurement. The attitudes of people towards the existing performance of Card Banking ATM
service is expressed in below.
26
Total no of respondents Regularly Frequently Very Frequently
200 70% 27% 3%

4.9 Service quality of Card Banking ATM services.
32% respondents are strongly satisfied,39% are satisfied, 19% are neutal, 8% are notsatisfied and 2% are
strongly not satisfied with this statement
Table 4;
Figure 8: Percentage of Respondent
Analysis: In my survey, I find that most of the customers are thinking that overall service
quality of Card Banking is good because 25% respondents are strongly satisfied 39% are
agree, 24% are moderate about this statement, this percentage shows the service quality of Card
Banking is good and customer is satisfied.
27
Variable Respondent Percentage of Respondent
Strongly Satisfied 64 32%
Satisfied 78 39%
Neutal 38 19%
Not Satisfied 16 8%
Strongly Not Satisfied 4 2%

28
4.10 Card Banking and It’s Impact in Bangladesh
1.The lockdown and subsequent restrictions triggered by the Covid-19 pandemic resulted in decr
2.Digital commerce transactions more than doubled from 15 per cent in March 2020 to 3035 per cent in June 2021 while card
usage grew five times from Tk 225 crore to Tk 1,250 crore over the same period.
3.According to Bangladesh Bank, year-to-date November 2021 transaction volumes atPoint of
Sales (POS) machines through debit, credit and prepaid cards increased 23 per centcompared to the same period last year.
4.Over half a dozen financial institutions in Bangladesh are already issuing contactlesscredit cards and many others are ensuring
their acceptance and deployment.
5.Today, increasing awareness on using digital payments and networks, and banks offering exclusive offers on debit, credit and
prepaid cards to people of all income groups, especially millennials, is making card culture popular and driving the growth of
card transactions. eased mobility for almost everyone across the globe.
6.Incentives are necessary to nudge people into using digital payment methods, such as cards and mobile financial services
(MFS), so that Bangladesh can achieve its goal of becoming a cashless society.
7.Although the government and central bank have taken numerous initiatives to reduce the use of hard cash, the country still has
a long way to go to this end, according to analysts.
8.To address the issue, they recommend incentivising cashless transactions so that more people are inclined to give it a try
and eventually adopt it for all payments.
9.Card transactions were 31 per cent higher that month compared to the same period the previous year, when the total value was
Tk 20,624 crore.
"Our target or destination should not be a cashless society, but a less-cash society and weare on the right track," said Syed
Mohammad Kamal, country manager of MasterCard.
10.He recommended the government offer a 5 per cent incentive to boost card transactions.Of the 5 per cent, 3 per cent
would go to the cardholder while 2 per cent would be for merchants, Kamal said. India recently saw a massive rise in
cashless transactions after the country provided incentives under its demonetisation program. Using this example, Kamal
said remittance earnings in Bangladesh rose after the government incentivised the use of formal channels. Although it has
been more than two-and-a-half decades since the inception

29
of "plastic money", cashless transactions only started gaining pace in the last decade while the coronavirus pandemic provided
a big boost. "As people increased the use of cashless transactions amid the Covid-19 crisis, this is the right time to
offer incentives to push it further," he said.
11.Under this system, banks settle inter-bank cheques within one working day instead of the two to three days
needed by the manual system. More than 10,000 cheques were settled every day with an average transaction size of
Tk 72.39 lakh as of December 2021, central bank data shows.
12.The central bank rolled out MFS in 2015, and they have become hugely popular among people from all
walks of life as it is easy and available all over the country. Different consumers have mentioned different factors
that should contain in card banking. Incentives are necessary to nudge people into using digital methods, such as
cards so thatBangladesh can achieve its goal of becoming a cashless society.
4.11 Findings
On the basis of the study of the overall Card Banking activities, we can say that forthe following reasons the overall online services of the
bank cannot be expanded rapidly –
1.The infrastructure of Card Banking in Bangladesh they have limited protection. Banking cannot maintain their Card Banking with
other banks in Bangladesh.
2.In my experience I found that every day in pick hour the software was very slow andthat always creates problems in times of transaction
and any other work for the bank.
3.Though Card Banking is trying to give the online service to their customers but there isalso a lack of adequate knowledge about e- banking.
4.I think Card Banking has a lack of a proper strategic plan which is why they cannot gainand retain a big portion of market share among
many other online banks.
5.In Bangladesh there is a lack of international standard communication channels that ishampering Card Banking‘s Card Banking Fraud.
6.Improper inter–district telecommunication systems and countrywide data communication system, that is why the bank is not able to
provide its online services to the countrywide.
7.Branch offices cannot be linked efficiently with the head office through singlenetworking based on an online real-time basis.

30
8.Lack of attractive remuneration to the technocrats. This motives them to go abroad for higher remuneration.
9.Lack of integrated plan between the Card Banking and the Bangladesh bank authority.
10.Inefficient corporate clearing house facilities of the bank. Though the bank now started their Automated Clearinghouse but that is
not fully implemented.
11.The bank‘s branches network is only the number 79 over the country and most of thebranches are located in Dhaka city, in the Chittagong
commercial area, and in the other large commercial areas of Bangladesh. For the reasons the people of these areas only getthe bank's overall
services
12.They don't build customer's credit scores for this card banking is not growing up in Bangladesh.
13.This is one of the most significant challenges for banks promoting online banking.inonline banking,
hackers can break into customer's details and illegally transfer money andfor this, they do not take any step to secure this.
14.Difficulty depositing cash in Bangladesh most online banks let you deposit paper checks using their mobile apps. Some online banks don't
accept cash deposits.

31
Chapter Five
RECOMMENDATIONS AND CONCLUSION
1. Recommendations
To improve the Card Banking services, I have the following suggestions for Bank:
1. Card Banking should provide adequate training and technological support to develop the manpower or
personnel working in the Card Banking section.
2. Card Banking should have a strong strategic plan for automated market development.
3. Review their business strategy and create the required space for
adopting a Card Banking services in order to remain competitive and attract new customers.
4. Strengthen the ICT department by providing training to IT personnel and procuring required hardware and
software.
5. Create a separate unit in each branch for rendering ICT related operational activities under the supervision
of the ICT department.
6. A specialized, self-owned organization can be established by the bank so that they can develop the infrastructure
of Card Banking Fraud in Bangladesh that will also be the social responsibility for them.
7. Clearinghouse operations are demanded to be fully automated. If it could be implemented, then banks will
be motivated to implement in front services counter of the electronic bank.
8. To meet the demand of current and prospective clients, banking software to be produced in such that
the coordinated effort can supply all information from the frontdesk.
9. The bank requires a systemic and planned budget for expanding Card Banking

32
10. To provide the nationwide & countrywide services, the bank should expand thenumber of branches of ATM booths at the zonal level so that
the most of the people ofthe country can get the benefit, which lives in zonal level, rural level.
11. Card Banking services should be implemented rapidly. And the restriction on getting the Card Banking should reduce Technical
issues.
12. Card Banking should focus on simplifying Financial Concepts with Explainer Videos.
5.2 Conclusion
The trend of technology in banking is soothing for the customer, but there may have some
risks associated with it since information technology is often hacked by notorious hackers. So, it is very much essential for the bank to
adopt the right technology with an optimum security system. Banks are required to ‗ restructure ‘reinvent and reengineer and get
a competitive edge due to the introduction of information technology is an important output; information output of information technology
has ushered in an era that is transforming the entire functioning of banks. The flexibility of Card Banking Fraud offers unprecedented
opportunities for the bank to reach out to its customers. With the rapid expansion of Internet facilities, Card Banking Fraud is all set to
play a very important role in the 21st century. Banks have to deal with sophisticated clientele with the help of the latest
technology like Card Banking Fraud. Lack of coordination and cyber crimes encroaching on E-banking if taken in the right way by
banks and customers would take the economy to its best and make it a boon to customers.
The modern electronic banking concept in the banking services is new for Bangladeshi people. Most of our banks has not had any
marketing or sales forces to execute the raw and cold business of electronic banking for their own organization. People are not also conscious
of the advantages of technology. Some multinational banks are already introduced their marketing activities to their targeted
customers for specialized products like electronic products which are found very effective. Multinationals are coming up towards people
with a variety of highly technical products, which can solve the people‘s problems and canable to modernize their lifestyles. The growth of
electronic banking users increasing is in asignificant manner. However, last 10 years it has got tremendous importance over the
bankcustomer and hopefully, it will increase day by day after nurturing the product by the professional bankers.

33
Considering the issues discussed earlier we may conclude that Card Banking. Ltd. is not only a profit-making organization, it is
also a perfect "Corporate Citizen" that always carryout its duties of corporate social responsibilities. As the banking sector
istherefore, banks of Bangladesh must move towards fully Card Banking Fraud. This will enable them to provide round the
clock services through all the service channels without deployment of much manpower thus saving time & money and
most important of all ensuring transaction security

34
References
Card Banking. (2020), Annual Report
Adtya Juyal “Marketing of BankingServices”, revised edition, 2015.
Chun Wang and Zheng Wang, (2016:07), ―The Impact of Internet on ServiceQuality in the Banking Sector.
Guangying Hua, (2016), ―Card Banking Fraud and Commerce, Journal of CardBanking Fraud, vol. 14, no.1
A R Khan, “Bank Management: A Fund Emphasis”, Ruby, first edition, 2020
Pandachi K, Seetanah B „and ―Appadu A, ―A STUDY ON THE USE OF CARDBANKING FRAUD AMONG SME IN MAURITIUS‖.
Silberschatz, Henry Korth, and S. Sudarshan, "Database System Concepts" Fifth edition. "PHP5,Apache, MySQL, Web Development", by
Wrox publication.
Priti Sinha and Pradeep Sinha , “Computer Fundamental”, BPB, fourth edition.
Julian Gasper, Leonrd Bierman, and James W.Kolari, “Introduction to Business”, second edition.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1418288
https://www.researchgate.net/publication/352021577
https://thefinancialexpress.com.bd
https://www.dbbl.com/
www.bangladeshbank.com/

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