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Executive Summary
E-Banking is web-based Banking. Now a day due to emerging global economy, e-commerce and ebusiness 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 of global banking system. At present the banks in Bangladesh are using the limited electronic banking services. E-banking product and services include wholesale products for corporate customers as well as retail and fiduciary products for individual customers. Foreign commercial banks and private commercial banks are relatively in a better position to provide on line banking services. Dutch bangle bank is acting as a pioneer in this sector. Customers who are habituated with online banking thinks that online banking services are relatively good then manual system, but they not satisfied with the quality of services and bank personnel behavior to that extent. Although E banking activities are experiencing lots of limitation and constraints such as lack of awareness and human capital, inadequate infrastructure, this sector has a high prospective. People are now getting interested in online transaction and government has laid out some plans for developing ICT infrastructure. Bangladesh bank take some major initiative in this regard and nationalized bank should concentrate in improving their online services spread and quality.
Table of Contents
Section Contents 1 2 3 3.1 3.2 3.3 3.4 3.5 4 4.1 4.2 4.3 5 6 7 Introduction Overview on E banking Economic aspects of E banking Present status of E banking in Bangladesh Product and services available in BD Customer response Dutch Bangla bank Ltd. as a pioneer Comparative analysis among 5 banks Findings and analysis Problems and prospects of e banking in BD SWOT analysis Limitation and constraints of e banking in Bangladesh Prospect of e banking Potential policies and implication Summing up Bibliography Page number 6 10 13 14 16 21 28 34 35 36 38 39 42 44 45
Introduction
To fulfill the partial requirement of the E commerce and E banking (F-404) course offered in BBA program in 14th batch. To gather adequate knowledge about present status, problems and prospect of E banking in Bangladesh. Enhance individual performance. To improve our skills on report writing. To meet the curiosity in this stated subject.
1.3: Methodology
The information for the report was collected from secondary sources.
Secondary data has been collected from various publications and survey reports. We use sampling for analyzing current status of E banking in Bangladesh. For this
purpose we use stratified sampling. Our sampling consists of five bank from three different sectors of private commercial bank, foreign bank and nationalized bank.
Dutch bangle bank limited Eastern bank limited Dhaka bank limited Standard chartered bank limited Sonali bank limited
1.5: Limitations
Every study has some limitations. We faced some usual constraints during the completion of our report. The major limitations are:
Lack of experience acted as constraints in the way of careful exploration on the topic. Busy working conditions.
Chapter 02
Overview on E banking
E banking
The term Internet Banking or E-Banking Internet both are used as supplement. E-Banking is the one of the major part of E-Financing. E-Banking is web-based Banking. In other words E-Banking refers to the banking operations, which is done over World Wide Web. However, more comprehensive and wellestablished definition is given by the United Nations Conference on Trade and Development (UNCTAD). This definition covers almost all area of E-Banking. Internet banking refers to the deployment over the Internet of retail and wholesale banking services. It involves individual and corporate clients, and includes bank transfers, payments and settlements, documentary collections and credits, corporate and household lending, card business and some others (UNCTAD, 2002) . E-Banking information architecture is modeled as client-server architecture. A client operating through a PC linked to Internet opens the special E-Banking site of his bank and then, using a set of special secure numbers, gets access to his bank accounts and has the opportunity to consult them, as well as to make all necessary payments and transfers from his personal accounts. When the transaction number is exhausted the bank sends him a new set of numbers for his individual transfer sessions. In some cases the bank provides customized software. The bank software program can also be utilized offline, for example for preparing the payment orders offline and then making the actual order online. The client receives all numbers separately, mainly by mail. The bank also provide clients with similar facilities in its premises so that clients can use the bank equipment such as an ATM or a special facility linked to the main terminal facility called Multimat, permitting them to effect the same account examination, payment and transfer operations without consulting the bank staff. Now a day due to emerging global economy, e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development. The new information technology is becoming an important factor in the future development of financial service industry, and especially banking industry.
There are a substantial number of educated unemployed youth forces, with ability to read and write English exist in the country. They can be trained within a required skill in a short time.
Long-term benefits:
Create new opportunities of jobs for jobless; Participate in the countrys economic health; Proper planning and monitoring; Proper use resources.
Job creation:
The issue of computers eliminating jobs of people is quite emotional and painfully real. But it has two sides that automation will eliminate certain types of job like record keeper and also create jobs like administrator, system analyst, programmer, operator etc. and help 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.
Better cash management. E-banking facilities speed up cash cycle and increases efficiency of business processes as large variety of cash management instruments is available on Internet sites of banks. Private customers seek slightly different kind of benefits from e-banking. Reduced costs: This is in terms of the cost of availing and using the various banking products and services. Convenience: All the banking transactions can be performed from the comfort of the home or office or from the place a customer wants to. Speed. The response of the medium is very fast; therefore customers can actually wait till the last minute before concluding a fund transfer. Funds management. Customers can download their history of different accounts and do a what-if analysis on their own PC before affecting any transaction on the web.
Economical benefits:
E-banking serves so many benefits not only to the bank itself, but also to the society as a whole. Ebanking makes finance economically possible: I. II. III. IV. Lower operational costs of banks Automated process Accelerated credit decisions Lowered minimum loan size to be profitable.
Chapter 03
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At present the banks in Bangladesh are using the limited electronic banking services. It is expected that bank can attain more profit and offer better services to its customers by, introducing on line banking facilities.
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and Agrani bank ltd., is also providing on line banking services in a limited scale. Rupali Bank ltd. is also developing on line banking. BASIC bank which is 100 percent public owned but served as private sector banking has a technological advancement.
The country had only about 400,000 credit card holders at the end of June last year, according to Bangladesh Bank Payments and transactions by credit cards were nearly Tk11 billion in June 2008 --- one of the lowest in the world.
In Bangladesh digital divide among the Dhaka city and rest of the country is conspicuous. E-business as a whole is confined among very few business organizations and on line banking business is expediting process of the e-business of the country.
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Check Truncation: This is such a service in which a financial institution doesnt return the rejected checks with the monthly statement to their customer, rather they provide statement of rejected checks with their monthly statements. The banks store the rejected checks for a certain time period (usually 90 days). During this time period a customer can adjust /rectify the account if any imbalance is found between his own record and the bank statement provided by the bank. After the expiration of the stipulated period the rejected checks are spoiled and the bank maintains a micro film copy for a period. Home banking: At first bank introduced telephone bill payment (TBP) so that customer could be able to do their banking activities from their home. The next version for the home banking was Video Home Banking (VHB). The internet is expected to be a major factor for home banking. Retail Automated Clearing House Service: It is an electronic network for financial transaction. ACH process large volume of both credit and debit transactions which are originated in batches. ACH credit transfers including direct deposit, payroll payment and payments to contractors and vendors. ACH debit transfers including customer payment of insurance premiums, mortgage loans and other kinds of bills. Businesses are also increasingly using ACH to collect the customers online rather than accepting credit or debit cards. Wire transfer: Wire transfer is a process which ensures fast and appropriate timing of fund transfer from the sender to the recipient. This kind of transfer of money could be either within the country or abroad. Funds are transferred under the following network: FED wire ( federal reserve communication system) Bank wire CHIPS (clearing house interbank payment service) SWIFT ( the society for worldwide interbank financial telecommunication) : M remittance For sending foreign remittance four nationalized banks and fifteen private banks are working collaboratively with mobile phone service operators. Recently remittance could be sent in Bangladesh by banking channel through account transfer (normally takes 3 working days) or in the form of instance cash (takes 24 hours). Foreign resident people can send their money and PIN (personnel identification number) through mobile phone. As a result money transfer becomes relatively easy, quick and hassle free. But this system also superseded by mRemittance system. Mobile remittance service or mRemittance was introduced in the country opening doors to millions migrants workers to help transfer their hard earned money easily, effectively and most importantly ,swiftly. The first ever remittance
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service for Bangladesh was jointly launched by two local banks Dhaka Bank ltd. and Eastern Bank ltd. and the countrys second largest mobile operator ,Banglalink. Security measures of e-banking: The security of a system is the extent of protection against some unwanted occurrence such as the invasion of privacy, theft and the corruption of information or physical damage. At this system is developed through the internet there is a big chance of hacking through our system. Current browsers counter security threats with a network communication protocol called secured sockets layer (SSL). SSL is a set of rules that tells computers the step to take to improve the security level of the communication. Corporate automated clearing house: The automated clearing house (ACH) is an electronic network for financial transaction. ACH processes large volumes of both credit and debit transactions. Which are originated in batches other retail and fiduciary products and services may include balance inquiry, funds transfer, downloading transaction information, bill presentment and payment, loan application, investment activity and other value added services. Other E-banking services available in Bangladesh: Core Banking Cluster Banking Phone Banking SMS Banking Various Cards ATM Shared (VISA/MASTER) ATM own (VISA/MASTER) PC Banking Banking KIOSK Offline Branch Computerization E-payment The credit card is available from VISA, MasterCard and VANIK. Some foreign banks provide electronic fund transfer (EFT) services. It is at an early stage and used on a very limited scale. Microchips embedded Smart Card is also becoming popular in the country, particularly for utility bill payment. Automated teller machine (ATM) is expanding rapidly in major cities. A group of domestic and foreign banks operate shared ATM network, which drastically increase access to this type of electronic banking service. The network will gradually be extended to other parts of the country.
Customers Response:
Out of five hundred customers who have been using on line banking system, following results have been gathered from the questionnaire through using snowball sampling technique. In following table
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Customers Response who have been using on line banking system (% of Respondents who expressed Yes comment) is presented.
Comment On line Banking services is relatively good than manual system 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
16% 12%
19%
On line Banking services is relatively good than manual system 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
This survey result demonstrate that people thinks that online banking services are relatively good then manual system, but they not satisfied with the quality of services and bank personnel behavior to that extent.
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24/7 processing of large transaction volumes, with high availability Multiple delivery channel support, including branches, ATMs, point-of-sale terminals, call centers, mobile devices, and internet banking An XML Web-based user interface with context-sensitive help Security management covering application and role-based access Online validations and automated exception processing Centralized, decentralized, and combination deployments Ease of integration with existing systems using flexible Java Platform, Enterprise Edition technology
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Operational risk management controls, including limits, collateral, and nonperforming assets
It took 3 years for DBBL to implement what Visa and MasterCard both deem as the future card standard. It encompasses the digital age and the new technologies that have emerged in the electronic age. Visa and MasterCard both realized that the normal card is 40 years old and the amount of fraudulent transactions were loosing customers billions. North America will be have NexusPRO card compliant by 2016. But now DBBL already the only fully NexusPRO compliant and certified. DBBL's entire infrastructure (including ATMs) have had a costly upgrade to enable NexusPRO to Bangladesh. Brief Detail of How NexusPRO Works Normal cards use a magnetic strip at the back of the card. The information and security on that magnetic strip is stationary and does not change. Hence it can be easily duplicated. But NexusPRO's processor uses its processor to fully digitally lock all the information. It prevents the information from being copied as the processor 'generates' security codes rather than store it. It is a form of encryption. But NexusPRO goes even further. Visualize a series of locks and keys. Every lock has a corresponding key. customer account at DBBL has a digital lock, while your NexusPRO card is a digital key to access it. When a fraudlent card tries to access your account, DBBL knows that the correct digital key is not presented and denies access. Further more, DBBL replaces the account lock every second. But because a genuine
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NexusPRO card can generate the correct key using the processor, it can access open the account lock at that very moment. The next instance DBBL changes the account lock again, and your NexusPRO card has to generate the key again using its unique processor. The NexusPRO system also prevents one NexusPRO card from accessing another NexusPRO card. This is because all processors are unique. All NexusPRO cards generate keys differently and DBBL is aware of all the differences and knows which card is which so they can access only their authorized accounts. However this was just a brief overview how your NexusPRO card works. The detailed workings are more secure and even more revolutionary.
Mobile Banking
Around 87% of the total population of Bangladesh is un-banked. To bring such a huge population into the banking channel, DBBL is implementing a system to launch mobile banking soon. The project is in its final stage now. With this facility any person having a mobile number will be able to use his number as a bank account. In this mobile account they will be able to do the following: Cash deposit to any Agent of DBBL Cash withdrawal from any Agent of DBBL Cash withdrawal from DBBL ATMs Funds transfer to another mobile account Utility bill payment, Tuition fee payment, Air time top-up. Receive remittance from home and abroad Salary disbursement Disbursement of Govt. allowances Merchant Payment Balance Inquiry
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1. Cash Withdrawal 2. Balance Inquiry 3. PIN change 4. Fund Transfer (within Accounts) 5. Mini Statement 6. Cheque Book Request 7. Statement Request 8. Bill Payment for DBBL Credit Card GrameenPhone CityCell TeleTalk Bangla Link Alico Premium Electricity Bill etc.
Customers of other Banks can enjoy the DBBL ATM facilities with some conditions. The Banks connected with DBBL ATMs are: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Southeast Bank The City Bank United Commercial Bank Standard Bank National Credit & Commerce Bank Bank Asia Mercantile Bank Trust Bank Mutual Trust Bank First Security Bank Dhaka Bank AB Bank IFIC Bank Janata Bank Jamuna Bank Eastern Bank Pubali Bank Sonali Bank
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In the month of December, 2010 the total number of Cash withdrawal from ATMs was 230 million and the corresponding amount of withdrawal was Taka 13.20 billion.
Fast Track
To provide uninterrupted quick and faster service, the Bank has introduced Fast Tracks (FT) in the country. These FTs are comprised of several ATMs, Deposit Kiosks and Customer Service help desk officers. The customers have the faclity to deposit cash or cheque, withdraw cash, pay utility bills etc at the FT. DBBL has setup 50 FTs within 6 months of introducing it.The activities of FT are summarized below 1. 2. 3. 4. Cash Withdrawal: Cash Deposit. Account Opening Customer Request Form
A list of such services is given below: Customer's request form for Account Transfer Cardholder's Request form for a new Debit Card (MasterCard Debit / Maestro / Visa Debit/Visa Electron) or Credit Card (MasterCard / Visa) III. Request form for Replacement of a Card (Debit/Credit) for any of the following reasons: IV. Request for re-issue of PIN. Re-issue of PIN may be requested by a customer who have forgotten his PIN or in the fear that his PIN may be compromised to another person. V. Request for Account LinkageAuto debit VI. Request form for refund of Cash not dispenses from ATM but account debited. VII. Application form for availing Internet, SMS & Alert facility on bank account 5. Delivery of Captured Card I. II.
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Seamless and error free distribution of salaries Providing emploees with timely salary payments Lower manpower needed Reduces cash theft and misapporpriation Transactions are properly logged for your easy reference Highly secure way of distributing money No cash at hand in the office, all cash finally distributed through the largest ATM network in Bangladesh
Call center
Considering the growing number of customers, card holders & transactions, DBBL has setup a Call center. It is a world renowned Cisco hardware-based call center comprising of all the services a call center can provide, e.g, Interactive Voice Response (IVR) by virtue of which the customer will be able to choose his options using the keypads of a cell phone and listen to the responses related to his account or card or transactions from the system or though live agent. The customers can dial at 16216 from any land or mobile phone and go to IVR or Live agent, and get desired services.
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DBBL is considering to offer some transactions through Internet banking which were not possible due to security reasons. To cope with world's latest technology to provide transaction security, DBBL is considering multi-factor authentication for some of such transactions like Third Party Funds Transfer using Internet, e-commerce transactions and foreign remittance transfer from overseas remittance houses to DBBL
Green IT
Dutch-Bangla Bank has always been careful about environment. DBBL has taken initiatives to make its IT infrastructure as "Green IT". Environment friendly options like virtualization, power management and proper recycling habits towards certifying our data centers as "Green" are under our active consideration.
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Statement Request The customer can make a request for account statement for a required period. The bank will manually service this request. Cheque Book Request The customer can make a request for a Cheque book. Cheque Status Inquiry The customer can choose an account and enter the Cheque number for which the status should be viewed. Stop Payment Cheque The customer can mark his Cheque leaf as stop payment. Interest Rate Inquiry The customer can query on the interest rates on CASA & Term Deposit Products. Foreign Exchange Rate Inquiry The customer can query on the Foreign Exchange (FX) Rates using this function. Refill Pre-Paid Card The customer can buy a refill number for his pre-paid mobile phone or ISP link. Change Password The customer can change his Internet Banking Password using this function.
Additional Internet Banking Features for Corporate Banking Letter of Credit The customer can initiate the LC application through Internet Banking. Bank Guarantee The customer can initiate the Bank Guarantee through Internet Banking. Limits Query The customer can view his Loan Limits and Limits Utilization through Internet Banking
Number of ATM
1295
74
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22
25
Number of branches Number of branches having SWIFT code Core banking software Phone banking SMS banking Internet banking Various cards
96 12
49 23
54 19
25 17
1191 31
Flexcube
Flexcube
eBBS
CISCO System Flexcube Flexcube Card Suite(AIX, Oracle) Flexcube Flexcube Trans Master for Prepaid Credit and Debit Card Flexcube Flexcube CARDPRO
Shared ATM
Tranzware,Compass Plus
Account Summary Account Details Account Activity Transfer Funds Pay Bills Standing Instructions Open/Modify Term Deposit Loan Repayments Statement Request Cheque Book Request
X X X
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Cheque Status Inquiry Stop Payment Cheque Interest Rate Inquiry Foreign Exchange Rate Inquiry Refill PrePaid Card
Debit card Credit card Visa and master card Travel card
Others:
DDBL EBL Dhaka Bank Limited X X Standard Chartered Bank Limited X Sonali Bank Limited X X
Mobile banking Fast Track Electronic Student Booth (ESB) Internet Payment Gateway (IPG) Call center New Data Center and DRS Green IT
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Location of ATM:
Basis of comparison:
Metropolitical areas: Governed by City Corporations, these are the cities of Bangladesh. Such as: Dhaka Chittagong Khulna Rajshahi Shylet Borishal Rangpur
Municipal areas: Governed by, Municipal Corporations, these are the towns in Bangladesh.
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17%
83% 96%
22%
13%
78%
87%
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Foreign commercial banks and private commercial banks are relatively in a better position to provide on line banking services.
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Chapter 04
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SWOT analysis
As empirical evidence here a SWOT Analysis can be an effective measure. For analyzing the performance of the Internet Banking in Bangladesh the following SWOT Analysis is considered:
Strength
1 2 3
Internet Banking is still to grow more in Bangladesh; most of the banks are providing several services of E- Banking. Thus, this product will enjoy the benefit of first mover.
It is cheap for both banks and customers; banks will be able to lower overhead costs and make more profit out of it. Moreover, this requires less man power for banks; customers can save time and avoid hassles.
E- Banking is convenient as the service is available all the tome at just a click away.
Weakness
1 2
The system may have a problem of security breakdown which refers to the problem of indentification of customers who's initiating transaction. As in Bangladesh The transaction can only be cancelled via Internet while the Internet infrustructure in our country is not satisfactory and supportive to provide all time access to web. So, there comes the problem in executing service with its full functionality.
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Opportunity
1 2
Non- Branch Banking is becoming popular in Bangladesh; thus many banks are offreing non- branch banking facilities. A person is able to withdraw or deposit money in any branch of the bank he has account with. Moving to E- Banking gives an edge in such cases.
All types of internet services are being appreciated and applied by people ofdifferent walks as this eases the activities. So, such an attractive offer package provided by E- Banking will be popular everywhere very soon.
Threat
1 2 3
People have concern about security & privacy; htey like to fell money with their hand; they actually don't believe in virtual money tranfer.
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 competitors the banks must always update their services.
Despite the presence of online internet service in Bangladesh, its scope is underutilized. The reasons include high service charges, lack of awareness, poor telecomminucation systems, government policy, low buying power of potential clients and lack of institutional support.
The strengths and weaknesses are the internal factors of the banks in operation of E- Banking while the opportunities and threats are the external factors.
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Erstwhile technology
Bangladesh Bank should adopt latest technology but due to lack of vision they are adopting old technology i.e. introduction of MICR for Bangladesh Bank automation procedure. MICR system should be substituted by cheque truncation system.
Numerous problems have been identified from the field survey on line banking system in Bangladesh. Some of them are in the followings: Inefficiency and inadequate knowledge of the bank management about the on line 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 on line banking system. Inadequate back and front office management. Lack of integrated plan among the banks and the Central Bank authority. Inefficient Clearing House Facilities. Inappropriate software and less trust by the Bank authorities on local software.
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Biased-ness of the management of bank towards foreign software. Legal barriers and appropriate policy framework.
Financial risks
Although on line banking has bright prospects, it involves some financial risks as well. The major risk of on line banking includes operational risks (e.g. security risks, system design, implementation and maintenance risks); customer misuse of products and services risks; legal risks (e.g. without proper legal support, money laundering may be influenced); strategic risks; reputation risks (e.g. in case the bank fails to provide secure and trouble free e-banking services, this will cause reputation risk); credit risks; market risks; and liquidity risks. Therefore, identification of relevant risks, and formulation and implementation of proper risk management policies and strategy formulations and implementations are important for the scheduled banks while performing on line banking system.
Prospect of e banking
The Bangladesh Railway owns a high-speed optical fiber network (1,800 km) parallel to the railway path that covers 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 use this optical fiber network through which they reach even in rural areas with their services (Islam 2005). It is encouraging that some of the FCBs and PCBs are already using this optical fiber network for conducting online transactions, ATM and POS services.
Digital telephone exchanges have been established in 389 upazilas and 17 growth centres. Work is underway to cover the rest of the upazilas under digital exchange system. Meanwhile, Bangladesh has joined the information super-highway by connecting itself with international submarine cable system in 2006. A total of 159 Internet Service Providers (ISPs) have now been connected with this system of which 64 are actively providing services. Internet connection is slow with bandwidth range 32 kbps to 56 kbps for dial up and 64 kbps to 8 mbps for broadband. Under this scenario, as a part of government
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decision of building digital Bangladesh, the existing capabilities of ICT sector is likely to increase rapidly in bringing all upazilas under internet services and this will contribute in widening the scope of ebanking throughout the country.
The overall computer density in the banking sector is 1.64. For foreign commercial banks (FCBs) the computer density is 45.34, where as for NCBs the ratio is only 0.41. The specialized bank scenario is almost same as the NCBs, 0.43. On the other hand, private commercial banks have comparatively higher ratio, 4.94. As a whole 81.81 percent bank does not have any local area network (LAN), 30 percent have WAN (Wide Area Network) but for some banks many branches are outside of WAN connectivity. At present, all foreign banks of our country are using online banking system; they are invested a lot for their automation banking services. They are the pioneer of implementing electronic banking systems in Bangladesh, but now most of the private banks of our country are using electronic banking systems. In our country different banks are offering electronic banking services in different ways, some are offering ATM (Automatic Teller Machine) services, some are tele-banking and some are electronic fund transfer, debit card, credit card etc.
Recently, the governments 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 have accelerated the prospects of e-banking in Bangladesh.
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Chapter 05
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Infrastructure development
Internet penetration is a key factor for the growth of e-banking. Christiansen (2001) reports that the take off phase of Internet banking needs at least 30 percent Internet usage among the population. Moreover, since Internet penetration alone is not adequate for online banking expansion, the government may provide subsidy for surfing cost, organize training facilities with private partnership, widen multiple access facilities like web, telephone, ATM etc., and initiate motivation programs for the users and the target population. Moreover, adequate legal framework and security are essential for flourishing internet banking. VSAT operating license should not limit the bandwidth. Moreover, high bandwidth charge is another constraint in widening internet access to a greater number of people. Therefore rationalizing the charge could make the use of internet affordable to all.
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New ISPs should be attracted into the business for promoting greater competition in the industry. 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. The policies relating to long distance and international voice traffic need review to remove impediments to growth of e-commerce that relates e-banking as well. As a part of building digital Bangladesh, measures are needed to improve existing ICT infrastructure and address relevant issues including governance and institutional strengthening. A package of required rules, acts, laws, and regulations pertinent to e-banking adoption and development may be formulated. In this respect, lessons and experience of countries that have already expanded e-banking can act as useful guides. 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 The Bangladesh Bank may consider the following steps: Take steps to orient bank officials on benefits of e-banking. For instance, BB may offer short courses (e.g. using the Bangladesh Bank Training Academy) on e-banking including analysis of costs and benefit from the perspectives of customers and the banks, present status, and opportunities and challenges. To avoid risks involved in e-banking, risk mitigation policies and strategies need to be adopted as a part of the package approach to implementing e-banking. Mobile banking is a prospective area for two reasons: it covers almost all activities involved in retail banking; and mobile phone network has already been spread all over the country covering more than 30 million people. Because of convenience, a sizeable share of the unbanked people can be brought under the network especially in rural areas with flourishing mobile banking. In this context, it is important to formulate relevant acts, policies, and adopt operative guidelines.
For the scheduled banks, it is important to: review their business strategy and create the required space for adopting e-banking services in order to remain competitive and attract new customers. strengthen ICT department through providing training to IT personnel and procuring required hardware and software. create separate unit in each branch for rendering ICT related operational activities under the supervision of the ICT department. train all staff in basic ICT related matters in phases.
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Conclusion:
Technology has enabled the world to step into a new arena. To keep pace with advancing world it has become imperative to adapt new technologies in business and banking sector. At present, Bangladesh is trailing behind in acquiring the required quality of banking services to effectively compete in the global market. Therefore, the banking system needs upgradation for which urgent measures are needed to create a level playing field for rapid expansion of e-banking in the country. Despite the constraints, more efficient use of existing capabilities in developing the services can pave the way to quality provision of ebanking in Bangladesh.
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Bibliography
I. II. III. IV. V. Muhammad Mahboob Ali (2010). E-Business and on line banking in Bangladesh: an Analysis. AIUB Bus Econ Working Paper Series, No 2010-03, Mohammad Azizul Baten, PhD, E-Banking of Economical Prospects in Bangladesh, Journal of Internet Banking and Commerce, August 2010, vol. 15, no.2 Md. Abdul Hannan Mia, Mohammad Anisur Rahman, Md. Main Uddin E-Banking: Evolution, Status and Prospects Mohammad Mizanur Rahman, E-Banking in Bangladesh: Some Policy Implications Websites of concerned bank
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