Online Banking : Bangladesh
Perspective
Assignment 2
Md. Abul Hasnat ID# 081091025; MGT 311
Introduction
On line banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive
communication channels. Its includes the systems that enable financial institution's
customers, individuals or businesses, to access accounts, transact business, or obtain
information on financial products and services through a public or private network,
including the Internet. Customers' access on line banking services using an intelligent
electronic device, such as a personal computer (PC), personal digital assistant (PDA),
automated teller machine (ATM), or Touch Tone telephone. On line banking services
may include ATMs, wire transfers, telephone banking, electronic funds transfers, debit
cards, and credit cards. The process is simple: One need to do is to log on to his/her
bank's Web site and follow the instructions. Before begins to bank on line, however, one
might take advantage from the tips of the desired banks web site. When choosing an on
line banking service, one should use the same good business sense one could in any
transaction. One should make sure that the on line banking has a good reputation
before provide personal information or send money. The Internet is a convenient place
to find bargains in banking products and services. One can often view rates for savings
accounts, credit cards, loans, and other financial products and services. Some Web sites
also help one directly compare financial products on-line. One may discover that on line
transfers are similar to writing a check and mailing; transactions may not be processed
instantaneously. One should be sure to find out from his/her bank exactly when on line
or telephone account transfers take place (immediately, end of day, etc.).
What does online banking mean?
On line banking is a service provided by many banks, and Financial Institutions that
allows one to conduct banking transactions over the Internet using a personal
computer, mobile telephone, or handheld computer (such as a "personal digital
assistant"). Through on line banking one may be able to:
• Access accounts round-the-clock, even on weekends
• See balances on line and find out whether checks or deposits have cleared
• Transfer funds between accounts
• Receive and pay bills on line (without check writing, envelopes, or stamps)
Common on line banking services:
Banking transactions can range from something as basic as a retail account balance
inquiry to a large business-to-business (B2B) funds transfer. On line banking services,
like those delivered through other delivery channels, are typically classified based on the
type of customer they support. The following table lists some of the common retail on
line banking services offered by banks are as follows:
Account management
Bill payment and presentment
New account opening
Investment/Brokerage services
Loan application and approval
Business-to-business payments
In addition to traditional banking products and services, banks can provide a variety of
services that have been designed or adapted to support e-business. Management
should understand these services and the risks they pose to the institution. These are
the most common support services: web-linking, account aggregation, electronic
authentication, website hosting, payments for e-commerce, and wireless banking
activities.
Present scenario of Bangladesh
There are about 48 banks are operating their business in the country. Among them 4 are
nationalized commercial banks, 4 specialized banks, 30 private commercial banks, 10
foreign banks. The nationalized banks are huge and their network covering almost every
upazillas of the country but they are still to adopt the online banking technology. The
situation is the same for the specialized banks and some first generation commercial
banks. On the other hand the third generation private commercial banks and some 2nd
generation banks are very much aggressive to adopt this new technology. Dutch-Bangla
bank, a third generation private commercial bank can call the pioneer in this sector.
Dutch Bangla Bank Ltd. (DBBL)
DBBL Internet banking enables customer to access his/her personal or business
accounts anytime anywhere from home, office or when traveling. Internet Banking gives
customer the freedom to choose his/her own banking hours.
Account Summary: he Customer will be able to view the list of Current, Saving,
Term Deposit and Loan accounts with the current balance.
Account Details: he Customer can choose a particular account and see the
account details including unclear fund, limit, interest accrued etc.
Account Activity: The customer can see or print his transaction activity in a given
account for a particular period.
Transfer Funds: The customer can transfer funds from one of his accounts to
another of his accounts within the bank.
Third Party Transfer: The customer can transfer funds from one of his accounts
to another customer’s account within the bank.
Pay Bills: The customer can pay his utility bill (like Electricity, WASA, GAS,
Telephone, Mobile, ISP etc.)
Standing Instructions: The customer can setup, modify or delete standing
instructions for transferring fund from one of his account to another account (his
account or 3rd party).
Open/Modify Term Deposit: The customer can open a term deposit by
transferring funds from one of his current or savings accounts with the bank. He
can also modify the TD and redeem / part-redeem it.
Loan Repayments: The customer can make payment of the loan installment from
his CASA account.
Statement Request: The customer can make a request for account statement for
a required period. The bank will manually service this request.
Prime Bank Ltd.
The Bank has set up a Wide Area Network (WAN) across the country to provide on line
branch banking facility to its valued clients. Under the Scheme, clients of any branch
shall be able to do banking transaction at other branches of the bank.
Under this system a client will to be able to do following type of transactions:
Cash withdrawal from his/her account at any branch of the Bank irrespective of
location
Cash deposit in his/her account at any branch of the Bank irrespective of location.
Cash deposit in other's account at any branch of the Bank irrespective of location.
Transfer of money from his/her account with any branch of the Bank.
Any amount can be deposited or transferred under Prime Line. In the system,
however, at present there is a limit for cash withdrawal through bearer or by
account holder himself.
Other banks such as Brac Bank Ltd., Dhaka Bank Ltd., premier bank Ltd., The trust bank
Ltd., One Bank Ltd., Eastern bank Ltd., are also providing similar kind of service as
mentioned in the above.
Percentage of active on line services user:
Al though some banks are providing on line services, the no. of customers using this
service is minimum. Market Researchers have conducted a practical study about the
percentage of customers who are enjoying the on line services provided by the above
bank. The study was conducted during January to October 2007, on 1000 existing
customer (Dutch Bangla bank-200, Prime bank-200, Brac bank-200, Premier bank-200,
the trust bank-100, Eastern bank-100) of the above bank. The result shown as under:
Percentage of active on line services user
Active customer of on line
Banking
Currently not
using on line banking
Examining routes to use
on line banking
Did not make comments
On line banking is under
development: to be
operational in 10 months
Global Comparison
In our country people are satisfied with their banks ATM, Internet, SMS banking
facilities. Now people free less tension to transfer their money from Dhaka to
Chittagong or even where the banks are on lined. They need not carry the money
whenever go for shopping. They can use Visa Card, Master Card and they are able to
draw money from the nearest booth of market through ATM Card. The cards are like
Plastic Money as the bankers say it.
But in Comparing with the international standard there are some gaps of online banking
with other foreign banks. The causes are infrastructure, knowledge of use, term and
conditions, slow bandwidth of radio link in money transferring and so on.
Banks Facilities Web Adress
Dutch-Bangla Internet Banking, http://www.dutchbanglabank.com
Bank Ltd (Local) ATM & Qcash,
Credit card, Debit
card etc.
ICICI Bank ( India) Bill Payment, http://www.icicibank.com/Personal-
Ticket Booking, Banking/onlineservice/online-
Fund Transfer (On- services/onlineservice.html
net/ off net),
Online Tax
Payment
RBC Royal Bank Online Banking, http://www.rbcroyalbank.com/personal.html
(Canada) Direct Banking,
Online Tax
Payment, Regional
Online Banking,
Credit Card
Enquiry, Mobile
Banking.
Conclusion
As personal computers became more powerful, affordable, and available during the
1998, bank companies of Bangladesh increasingly used them to construct their own
internal networks. Within 30 years, the internet becomes one of the most amazing
technological and social accomplishments of the 21st century. The rapid development of
this new technology will brings the world in a new dimension of financial transaction.
stay aside from this contemporary technology will bring us in a least develop to
developing countries, cause our international as well as national business will face a
complex situation. Foreign investor may reluctant to invest here for the traditional
system of financial transaction. In our country foreign banks are using modern
technology and newer on line services to their customer, but our local banks are still
behind in comparison to them. Only Dutch Bangla bank are providing full fledge on line
banking service to their customer. Other banks (mentioned previously) are providing
limited on line services to their customer. The present situation implies that every bank
operating in Bangladesh should have adopted the new technology to cope with the
challenges of upcoming 21st century.
Reference
Mary Lou Roberts, Internet Marketing: Integrating online and offline strategies: McGraw
Hill, Irwin
Bhasin T.M. E-commerces in Indian Banking: P.H. Collin, Dictionary of Banking &
Finance, Universal Book Stall, Reprint 1996
Derrick G Hanson, Dictionary of Banking & Finance, Pitmam Joseph P.T, E-commerce: a
managerial perspective, Prentice Hall of India
M. Mizanur Rahman, Present status of E-Banking in Bangladesh, Journal of the institute
of bankers of Bangladesh, Volume 50, Number #1, January - June 2003
