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E-Banking system in banking sector A case study on United commercial Bank Limited
1.1 Introduction
Electronic banking opens the new avenues of banking. Electronic banking as a segment of electronic business, which, in tern, encompasses all types of business performed through electronic networks. Electronic channels are used for both business-to-business and business-to-customer transaction, such as ordering goods, delivering software or paying for such transactions. E-banking is considered to be a segment of E-business to the extent that banks are involved in the conduct of business transaction via electronic media; other non banking financial products and services (e.g. insurance), not to mention products and services from other sectors of business may be sold electronic as well. In other words, e-banking is not a banking product; rather, it describes the way transactions are conducted. Nowadays, in fact, banks are involved in E-business in a variety of ways, including cooperation with internet service providers (ISPs), the issuing of e-money or the execution of payments. Two fundamental aspects of electronic banking are the nature of the delivery channel through which activities are performed, and the means for customers to gain access to those channels. Commonly delivery channel include closed and open networks, closed networks have no such membership requirements. Currently, widely used access devices through which e-banking product and services can be provided to customers include point of sale terminals, automatic teller machines, and telephones, PCs.
1.2 Objective of the study

Prepared by-Md Nizam uddin chy 1
E-Banking system in banking sector A case study on United commercial Bank Limited The salient object of preparing this term paper is to gain knowledge about e-business, its practices and prospects in Bangladesh. The ultimate objectives on the ground of ebanking are being cited bellow: To ensure the permissiveness of inflammatory idea the E-banking in our on going economic platform in no time. With a view to ascertain the impediments and strains ahead E-banking system in Bangladesh. To measure the scope, provision, loyalty available for E-banking in and around our state. To aware of different aspects of E-banking in effect. To make competitive study of on-line operation of banks in abroad. To forecast the prospect of on-line system on the basis of proclivity of large section of people in Bangladesh. To suggest and recommend ways and means to solve problems regarding e-banking practice.
1.3 Methodology of the Study
Prepared by-Md Nizam uddin chy
E-Banking system in banking sector A case study on United commercial Bank Limited This report has been prepared on the basis of the experiences gained during the period of thesis report. Most of the primary data are collected from the officials by direct face to face interview and some information are collected from the UCB websites. Also Researcher have collected secondary data from the Annual reports, Journal, Manuals, magazines.
Primary Data Sources

1. Direct working with officials of United Commercial Bank Ltd, Anowara branch. 2. Face to face conversation with the officials. 3. Data colleted from the personnel of online banks.
Secondary Data Sources

1. UCB website. 2. Studying the related books and publications 3. Vouchers, leaflets, GB files of the bank 4. Manual of United Commercial Bank Ltd. 5. Data collected from the web materials of online banks through the direct access to internet. 6. Files, balance sheet and various documents of United Commercial Bank Limited 7. The major portion of data sources has been collected from secondary data sources. Required Information has been also availed from related text and research paper.
1.4 Limitation of the Study
E-Banking system in banking sector A case study on United commercial Bank Limited In spite of best effort, Researcher is sure of some lacking prevailing in this report. These are caused by some limitations that are enumerated below. 1. 2. 3. 4. 5. 6. 7. 8. 9. Any research work needs high degree of involvement regarding collection of For the lack of our practical knowledge, some shortcoming may be available Some data could not be collected for their confidentiality and official secrecy. Lack of any finance for the study has affected the research works, e.g., opinion Rapid changes in the competitive market in terms of demand and competition Some analysis hampered for the inadequacy of data provided by the officials Since the banks personnel are very busy with their activities as a result they It is not possible to collect adequate data relating on-line banking system. As some information were classified, it was not possible to collect though the
information, creation of database, literature review and analysis of data. in the paper.
poll could not be conducted. may cause the lack of worthiness in creating actual time utility of this report.
couldnt assist me properly in spit of their willingness.
informations were relevant to the study. Researcher, therefore, hope that the study will be evaluated with an approach subject to the recognition of the above-mentioned shortcomings
2.1 Introduction & History of UCBL

E-Banking system in banking sector A case study on United commercial Bank Limited UCBL was incorporated in Bangladesh as Banking Company under the Companies Act.1913. Moreover, commended operation on June 26, 1983 when the Govt. allowed some commercial bank to operate in the private sector. As a scheduled bank of the country, the banks activities are subject to the effective control, supervision and guidance of the Bangladesh Bank. The bank in primarily oriented towards extending financial assistance in the trade and commercial sector besides lending in the industrial sector. Sponsored by some dynamic and reputed entrepreneurs and eminent industrialists of the country and participated by the Government, UCB started its operation in mid 1983 and has since been able to establish the largest network of 121 branches as on 25. 07. 2012 among the first generation banks in the private sector. With its firm commitment to the economic development of the country, the Bank has already made a distinct mark in the realm of Private Sector Banking through personalized services, innovative practices, dynamic approach and efficient Management. The Bank, aiming to play a leading role in the economic activities of the country, is firmly engaged in the development of trade, commerce and industry through E-baking.
2.2 Vision, Mission, & Value Statement of the Bank
Vision
E-Banking system in banking sector A case study on United commercial Bank Limited To be the bank of 1st choice through maximizing value for our clients, shareholders and employees and contributing to the national economy with social commitments.
Mission
1. Maximize profit with steady growth ensuring major market share. 2. Be the leader in providing need based innovative products and services. 3. Continuously upgrade technology for strong information Management System and meet customer expectations. 4. Establish a best practice corporate culture of participative management and enabling environment where innovativeness and performance in rewarded. 5. Develop and retain in quality workforce through effective Human Resource Management System maintaining high moral and ethical standards.
Value Statement
1. 2. 3. 4. 5. 6. 7. 8. 9. We put our customers first We emphasize on professional ethics We maintain quality at all levels We work as a team and encourage two way communication We bear mutual respect and care for each other We believe in being a responsible corporate citizen We say what we believe in We foster participative management We operate with the highest standards in our relationship with customers, shareholders, business associates and service providers.
2.3 Management of the bank
E-Banking system in banking sector A case study on United commercial Bank Limited The Bank has a very competent Management team comprising highly skilled, eminent and professional bankers. Mr. Shahidul Alam is the Managing Director of the bank and forerunner of the management team. He brings with him vast experience, expertise and modern outlook having more than thirty years long outstanding career. The Divisional Heads at the Banks are senior bankers who have long experience in domestic and International Baking. The Management adheres to maintaining high ethical standard and nourishes and practices good corporate governance for the greater interest of the institution and the country as a whole. Some committee(s) is framed to run the organization properly. These are to set out a strong internal control framework. Every Committee is headed by the Managing Director/ Deputy Managing Director.
2.4 Management Aspects of UCBL

Like any other business organization the top management makes all the major decisions. Mid and lower level employees get the direction and instruction from the top executive what are the duties and responsibilities the have to perform. Management of UCBL assumes that employees are the members of the team, who actively participate in accomplishing the organizational goal. They chief executive provides the guideline and broad direction to the managers and employees but delegable responsibility is determining how task and goals are to be accomplished.
The Management hierarchy of the UCBL is follows:

Managing Director

Typist
Additional Managing Director
Deputy Managing Director First Assistant Vice President Executive Officer Vice President Senior Executive Officer Executive Senior Vice Officer President Assistant Vice President Messengers First Junior Vice Officer President S enior Vice President Cash Officer Computer Operator Assistant Cash Officer Telephone Operator Officer Security Peon
2.5 Organizational Status of UCBL

E-Banking system in banking sector A case study on United commercial Bank Limited a) The Bank It has 121 branches all over Bangladesh and carries out all banking activities through its branches in our country and through international correspondent outside the country. On December 31, 2011Total assets of the Bank stood at Tk. 129,774,429,670
b) Network
UCB always considers client service the most vital factor to face ever-increasing competition and challenge in the Banking sector and as such places on it utmost importance. With that end, in view the Bank continued its personalized approach with speed, precision and accuracy. Presently the number of the branches stood at 121 covering almost al the important places of the country. The numbers of authorized dealer branches are 18. Moreover, worldwide international correspondents network of the Bank has been continuously expanding covering the important countries in all the countries of the world. Besides the Bank has arrangement with a number of Exchange Houses at Singapore, U.A.E., Oman, Qatar, and Kuwait to facilitate remittances from expatriate Bangladeshis. To cope with modern banking requirement all the branches are being computerized. To develop expertise on computer operation, regular training program on computer for the officers are continuing. The bank is examining the possibility of introducing new computer programs (ONLINE BABKING) for improving customer service and has finalized arrangements with other private commercial banks to introduce ATM. SWIFT has already been introduced to speed up international transactions and passing of L/Cs at HEAD OFFICE. SWIFT and introduced all the A.D branches of the Bank.
c) Management
E-Banking system in banking sector A case study on United commercial Bank Limited Mr. Shahidul Alam is the Managing Director of the Bank. He is a renowned and dynamic banker with more than three decades of banking experience to his credit. Mr. Shahidul Alam, a prominent banker. The Management is well supported by an organized team of dedicated executives and officers.
d) Capital and Reserves

During the year 2011, authorized capital of the Bank was Tk. 9,000 million. The paidup capital stood at Tk.7274.88 million and reserve fund stood at Tk. 2910.00 million on December 31, 2010.
1. Capital & Reserve

3500 3000 2500 2000 Tk. In Million 1500 1000 500 0 2006 2007 2008 2009 Year 2010 2011 Paid up capital Reserve
e) Deposit
Deposit of the Bank increased in the year 2010 than in the year 2011. On December 31, 2011 total deposit of the Bank stood at Tk.139484.75 million against Tk. 113070.78 million in 2010.
f) Credit
Credit program of the Bank continued to expand satisfactorily during the year 2011. On December 31, 2011 net credit of the Bank rose to Tk115,506.33 million as against Tk. 93460.00 million in 2010.
g) Investment
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E-Banking system in banking sector A case study on United commercial Bank Limited On December 31, 2011, total investment of the Bank stood at Tk. 19506.67 million.
I) Human Resources
Skilled work force is an essential pre-requisite for development of any serviceoriented Organization. UCB puts all out emphasis for the development of professional work force to meet the challenge of modern banking. Since there is no alternative to training for acquiring the required efficiency and professional excellence, Banks training institute was busy throughout the year to impart training on different aspects of Banking. During 2011, 73 (Seventy Three) in-house training courses were arranged in which 2346 officers took part. Moreover, a number of executives and officers were sent to Bangladesh Institute of Bank Management {BIBM) and other training agencies. At the end of 2011 total number of employees stood at 2378 comprising of 24 executives, 1811 officers and 703 staffs.
2. Number of Employees 3000 2500 2000 1500 1000 500 0 2006 2007 2008 2009 2010 2011 Year Number of Employees
j) Total Profit
The Bank made more profit in the year 2011 than in the year 2010. On December 31, 2011, Total Profit of the Bank was Tk.5, 972.31 million
2.6 UCBL Products & Services

One Stop Service Prepared by-Md Nizam uddin chy 11
E-Banking system in banking sector A case study on United commercial Bank Limited Time Deposit Scheme Monthly Savings Scheme Deposit Insurance Scheme Inward & Outward Remittances Travelers Claques Import Finance Export Finance Working Capital Finance Loan Syndication Underwriting and Bridge Financing Trade Finance Industrial Finance Foreign Currency Deposit A/C NFCD (Non-Resident Foreign Currency Deposit Account) Consumer Credit Scheme Locker Service Credit Card
2.8 Methods of Clearing & Bills

Clearing is one of the most important functions of general banking. Mainly clearing is an arrangement held in Bangladesh Bank where daily representatives of the member Prepared by-Md Nizam uddin chy 12
E-Banking system in banking sector A case study on United commercial Bank Limited banks gather to clear their cheques and other instruments. The bank receives many such instruments during the day from the A/C holders. Many of these instruments are drawn payable at other banks. When the bill is within the range of the clearing house it is sent for collection through clearing section. As far as safety is concerned customers get crossed cheque for the transaction Crossed check cant be encashed from the counter; rather it has to be collected through banking channel i.e., clearing. If a client of UCB received a check of another bank which is located within the clearing range and deposit the instrument in his account at UCB then UCB will collect the money through clearing house. On receipt of the check UCB will credit client account. However, the amount is credited in the customer a/c but he will not get the money until the check is honored. Clearing House is a place in the Central Bank where different banks come to settle their interrelated liabilities. UCB is an active member of BACH (Bangladesh automated clearing house). The bank process all received cheque in BACH in two ways. 1. Inward Clearing 2. Outward Clearing 1. Outward Clearing : Outward clearing means when a particular branch receives instrument drawn on the other bank within the clearing zone and those instruments for collection through the clearing arrangement is considered as outward clearing for that particular branch. 2. Inward Clearing : When a particular branch receives instruments which on themselves and sent by other member bank for collections are treated as inward clearing.
2.8.1 Automated Clearing House

Automated Clearing House (ACH), an amazing event in the history of financial sector in Bangladesh has started in Dhaka & Chittagong & it started in other offices of
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E-Banking system in banking sector A case study on United commercial Bank Limited Bangladesh Bank, where only images and corresponding information of the submitted cheque with Magnetic Ink Character Recognition (MICR) leaves are sent to the BACPS (Bangladesh Automated Cheque Processing System) using a secured communication link, The system will support both intra-regional and inter-regional clearings based on a centralized processing centre in Dhaka and designated clearing regions. It conforms to the international best practices, cost effective solution for cheque processing. Therefore, after getting customers cheques for collection in the bank-branch, collecting banks will check the prima facie information of the submitted cheques, captured images and information to the paying banks for validation. Paying banks will examine the relevant images and information, and send back to the BACPS for payment (further examination if any inconsistency like fund insufficiency or mismatch of signature etc.) Then BACPS will accumulate all the information, workout a single net amount for each bank, and send back to the collecting banks. As such, cheque clearing time is expected to be turned down to a single day for countrywide payment. In other cases, this will be a matter of couple of hours only.
2.8.1 Procedures for Clearing

a. Received seal is stamped on the cheque b. Crossing of the cheques are done. c. Payees A/C Credited endorsement is given d. Entries are given in the Outward Clearing Register e. Clearing seal is given f. Cheques are sorted bank wise and entries are given to the computer (NIKASH2) g. Entries are given in the Clearing House Register before dispatching to the clearing house. After that, a debit voucher is prepared: Balance with Bangladesh Bank --------------------------------------Dr. All Customers A/C ----------------------------------------------------Cr.
2.8.3 Dishonor of Cheque
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E-Banking system in banking sector A case study on United commercial Bank Limited If the cheque is dishonored, UCB sends a memorandum (cheque return memo) to the customer stating the reason. If the cheque is dishonored due to insufficiency of funds, UCB charges TK.100/= as penalty.
2.8.4 Outward Clearing

Outward clearing refers to the instruments drawn on other banks and deposited in UCB for collection. The following steps are taken for outward clearing ----- The duly signed instruments are received. The instruments are checked for any kind of discrepancy. Received For Clearing seal is stamped on the counterfoil of the deposit slip. Instrument is stapled with Deposit Slip. Special crossing in favor of The Branch is given on the Instrument thereof. Entry is given in NIKASH. Payees A/C Credited endorsement is given. The instruments with schedules are received from other branches. Entries are given in the Clearing House Register before dispatching to the clearinghouse. All the instruments are sent to the First Clearing House to deliver them to the respective banks.
Clearing seal is given on the Instrument. All instruments are sorted bank-wise as well as branch-wise.
2.8.5 Inward Clearing

Inward clearing refers the instruments drawn on the Anowara Branch which are received from other banks in the clearinghouse by the representative of other banks. The following steps are taken for inward clearing ----a. The instruments drawn on the bank, which are received from other banks through clearing house.
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E-Banking system in banking sector A case study on United commercial Bank Limited b. The amounts of number of instruments are entered in the house from the main schedule of respective banks. c. The instruments with schedule are arranged branch wise. d. The instruments are sent to branches concerned for clearance and IBCAs are collected from them for the honored cheque. e. The instruments are sent to the respective departments and the schedules are filled. f. These sorts of instruments are cleared from the second house of the central bank.
2.9 Bills
When the bills are supposed to be drawn on any bank which is out of range of clearing house of Bangladesh bank this instruments are sent for collection not clearing .These bills are of two types. They are inward bills for collection and outward bills for collection. We can see a brief scenario about these two types of bill as below:
2.9.1 Inward bills for collection

When instruments are received from other branches or other banks, they are treated as inward bills for collection. In practice instruments of other banks or branches are cleared through clearinghouse. For those instruments from other branches of and other banks outside clearinghouse come under the bill collecting procedure. We can get a clear idea from the chart as below ----OBC received along with the instrument. This branchs cheques are deposited in other branches. The details of the schedule and special instructions are entered in the INWARD BILLS FOR COLLECTION register.
In order
IBCA is sent to the branch. Signature is verified and account position obtained.
When the bills are received the following accounting treatments are made --A contra entry is made for creating a contingent liability. Bills Lodged (IBC) -------------------Dr. Inward bills for collection -----------Cr.
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E-Banking system in banking sector A case study on United commercial Bank Limited Since the bills are received from the s branches Party A/C -----------------------------------------Dr. General account (particular branch) ---------Cr. When the OBC is received from the other banks branches, which are not under clear house then the following procedures is maintained ---OBC received along with instrument. Signature verified and account procedure obtained. Demand draft is drawn on any of that banks local
2.9.2 Outward bills for collection

When the instruments of other branches or banks are received they are treated as outward bills for collection. This collection procedure occurs in two different situations. They are as follows: When the instrument of s other branch received then the following procedure is maintained -----Instrument of other branch received Instrument is stamped with banks crossing stamp The instrument is attached in the forwarding schedule and OBC is send along with the instrument
While sending OBC the following accounting treatments are made -----Outward bill lodged --------------------Dr. Outward bills for collection ------------ Cr. After receiving IBCA (Inter branch credit advice) the following accounting treatments are made -----Outward bills for collection -----------------Dr. Outward bill lodged -------------------------Cr. Bank general account (particular branch) ------------Dr. Partys account -----------------------------------------------Cr.
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3.1 Performance analysis of overall Deposits of UCB

Performance of total deposits of UCB (2007-2011):
Table: 9 Year 2007 2008 2009 2010 2011 Amount in Taka 4229,59,96,837 5448,52,66,726 7773,04,01,057 11307,07,82,505 139,484,745,903 Growth rate (%) 128.10 165.04 235.47 342.53 354.61
Source: Annual Report (2007-2011) Note: Calculation have been made by researcher
Chart: 9
12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000
354.61 342.53 165.04 235.47

DEPOSIT
DEPOSIT IN CRORE
128.10
2007
2008
2009
2010
2011
Source: Annual Report (2007-2011)
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3.2 Interest rate offered for different deposit schemes:

Sl. No. Name of the products Interest Rate (%)p.a.
01. 02. 03. 04. 05.
UCB DPS plus (monthly savings scheme) UCB earning plus (monthly interest payable fixed deposit) UCB one million deposit scheme UCB Multi millionaire deposit scheme UCB money maximizer (double money fixed deposit scheme)
12.00 12.25 12.00 12.00 12.25
3.3 Highlights on overall activities on UCBL
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E-Banking system in banking sector A case study on United commercial Bank Limited Sl no. Particulars 2011 2010
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E-Banking system in banking sector A case study on United commercial Bank Limited 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Paid up Capital Total Capital Capital Surplus (Deficit) Total Assets Total Deposits Total Loan & Advances Total Contingent Liabilities & Commitments Provision Surplus (Deficit) Percentage of Classified Loans against Total Loans and Advance Operating Profit Profit after Tax & Provisions Amount of Classified Loans during the year Classified Advance at the end of the year Provision kept against Classified Loans Credit Deposit Ratio Cost of Fund Interest Earnings Assets Non-interest earnings assets Return on Investment (ROI) Return on Assets (ROA) Net Asset Value per share Income from Investments Earnings Per Share (Tk.) Net Income Per Share (Tk.) Price Earnings Ratio (Times)
7,274,883,750 16,877,056,240 1,353,867,010 168,891,777,157 139,484,745,903 115,506,326,932 40,255,368,942 60,916,097 1.79 2,909,953,500 9,085,826,942 (3,881,422,672) 129,877,032,800 113,070,782,505 93,5 60,701,744 40,797,736,864 7,586,875 1.20
5,972,914,597 2,945,804,975 1,171,183,581 2,067,544,585 759,660,529
4,733,126,609 2,181,434,083 392,823,621 1,120,803,000 292,504,875
82.81 11.09 140,173,248,931 28,718,528,226 9.92 1.74 21.95 1,739,911,885 4.20 4.20 10.46
82.75 9.81 109,273,603,808 20,603,428,992 13.11 1.68 26.86 1,972,538,276 3.49 3.49 30.23
3.4 Two Years Financial Summery of the Bank 3.4.1 INCOME STATEMENT
Particulars Net Interest income Total Operating Income Total operating Expenses Total Profit before provision Total Profit before income taxes Net Profit after tax Earning Per Share
2010 3,835,413,988 5,577.09 8,995.97 4,730,493,379 3,629,963,500 2,179,795,853 4.19
2011 5,148,417,337 9,188.82 7,497.72 5,972,311,826 5,172,311,826 2,945,202,204 3.48
3.4.2 BLANCE SHEET
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Liabilities & Capital Deposits & other accounts Other liabilities 31 Dec. 2011 31 Dec. 2010 Properties & (Amount in tk.) (Amount in tk.) Assets 139,284,745,903 112,970,782,505 Cash 13,440,625,561 8,989,014,745 Balance with other banks & financial institutions 7,814,632,323 Money at call on short notice 97 Investments Loans & Advances Fixed assets including premises, furniture & fixture Other assets Total Liabilities And shareholders equity 168,688,453,506 129,774,429,670 Total assets 31 Dec. 2011 31 Dec. 2010 (Amount in tk.) (Amount in tk.) 13,034,212,190 10,029,475,236 3,740,008,122 1,824,534,862
Total shareholders Equity Non controlling interest
15,963,171,945 97
5,070,000,000 19,506,665,453 115,506,326,932 3,288,087,277
1,120,000,000 15,171,379,647 93,560,701,744 1,966,349,087
8,543,243,532 168,688,453,506
6,101,989,094 129,774,429,670
4.1 Definition of Electronic banking system

E-Banking system in banking sector A case study on United commercial Bank Limited Electronic banking, also known as electronic funds transfer (EFT), is simply the use of electronic means to transfer funds directly from one account to another, rather than by check or cash. EFTs is initiated through devices like cards or codes that let you, or those you authorize, access your account. Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. Some use other types of debit cards such as those that require, at the most, your signature or a scan. For example, some use radio frequency identification (RFID) or other forms of "contact less" technology that scan your information without direct contact. The federal Electronic Fund Transfer Act (EFT Act) covers some electronic consumer transactions. E-Banking is known to Bangladesh since 1990. Electronic Banking has got tremendous importance in banking sector and banking customers too. Electronic banking refers to several types of services through which a bank customer can request information and carry out most retail banking services via computer, television or mobile phone 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.
4.2 Advantages of e-banking system
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E-Banking system in banking sector A case study on United commercial Bank Limited E-banking offers some smart services benefiting both banks and customers compared with traditional banking system, it has become imperative to make necessary room for the scheduled banks to flourish e-banking. Attractiveness of e-banking includes: 1. E-banking lowers transaction cost 2. E-banking provide 24-hour services 3. E-banking ensure increased security and control over transactions 3. E-banking reduces fraud risk 4. E-banking performs higher volume of transactions with less time 5. E-banking allows remote transactions facilities that replace physical presence of a Customer in a bank branch and 6. E-banking increases transaction speed and accuracy. 7. It will be easy for the3m to view all information they need clearly and simply. 8. Customer might save time and efforts of doing their finance transaction. 9. Banks can deal simply with their branches all over the world with one network. 10. Searching of any branches of a bank will be accessible by online users.
4.3 DISADVANTAGES OF E-BANKING

For consumers
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E-Banking system in banking sector A case study on United commercial Bank Limited Some people feel uncomfortable to provide their passwords or any kind information about their funds over the internet. Some websites might be difficult for consumers for the first time to check their finance. It is possible for bank to update their websites, which need from consumers to type in again their data. It is necessary to have knowledge and skills on using the internet. FOR BANK Banks may require big amount of money to establish a website with attractive features Hacking and viruses will cause problem for E-banking, which could broke and damage the information or the privacy of customers. Some websites might be difficult for consumers for the first time to check their finance
4.4 THE CONCEPT OF MONEY-THE BEGINNING OF EBANKING

The electronic revolution in banking basically centers in changes in the distribution channels of financial institutions. The basis of the emergence of the modern electronic distribution channels is the result of the evolution of the concept of money. In the days of barter trade, the ability to pay for goods and services was reflect in the physical existence of the goods, which could be used for exchange. Then came hard cash in the forms of coin made of precious metals. This was then followed by the advent of fiduciary money in the forms of modern coins and paper notes. Today, an individuals ability to pay for goods and services simply reflected in the accounting records of his or her bank. Thus it is important to realize that now money is just defined as just information, which can be electronically transmitted to facilitate economic transactions. It is new definition of money, which is the prime attribute for electronic transaction of any kind.
4.5 GROWTH OF E-BANKING:
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E-Banking system in banking sector A case study on United commercial Bank Limited Electronic banking is a generic term referring to various computer-based technologies for delivering banking services. Electronic banking system can be divided into two categories by the functional characteristics, viz. back-office electronic banking, and electronic financial instruments or front-office electronic services. Back-office electronic banking provides information management services, and quick fund transfer facilities for both traditional banking and financial instrument and electronic financial instrument. Science inception of primary forms of electronic banking it has been passed through a comprehensive evolution process. Electronic banking services can be grouped into three generation of evolution. Classification of electronic banking services Generation banking First generation Ledger, Cash management. Second generation Head office MIS. Transaction processing [offline]. Telephone bill payment. Generation of information for POS systems. record keeping. Third generation Check verification Fund transfer. ATMs On-line transaction processing. Automatic fund transfers. Centralized country level. Internet Banking. Inter bank transaction. processing at On-line banking. Electronic direct deposit. Check transaction. Lock box check. Electronic fund transfer. Internet banking. Cash dispensers. of electronic Back-office Front-office
4.6 Various Forms of E-banking:
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1. Automated Teller Machine (ATM) 2. Mobile banking: 3. Tele Banking: 4. Online Banking: 6. Internet banking: 7. PC banking or PC home banking The various forms of e-banking system are discussed here: 1. Automated Teller Machine (ATM):
An ATM is simply a data terminal with two input and four output devices. Like another date terminal, the ATM has to connect to, and communicate through a host processor. Now UCBL (United commercial bank Limited) has Seventy seven of ATMs in Bangladesh. 2. Mobile banking: Mobile banking (also known as M-banking or SMS banking) is a term used for performing balance checks, account transactions, payments etc. via a mobile device such as a mobile phone. Mobile banking is most often performed via SMS or the Mobile Internet but can also use special programs called clients downloaded to the mobile device. The standard package of activities that mobile banking covers are: mini-statements and checking of account history; alerts on account activity or passing of set thresholds; monitoring of term deposits; access to loan statements; access to card statements; mutual funds/equity statements; insurance policy management; pension plan management; status on cheque, stop payment on cheque; ordering check books; balance checking in the account; recent transactions; due date of payment (functionality for stop, change and deleting of payments); PIN provision, change of PIN and reminder over the internet; blocking of (lost/stolen) cards; domestic and international fund transfers; micro-payment handling; mobile recharging; commercial payment processing; bill payment processing; peer to peer payments; withdrawal at banking agent; and deposit at banking agent. Despite huge prospects, only a few banks adopted mobile banking in Bangladesh during the last year.
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3. Tele Banking:
Tele Banking is form of remote banking which is essentially the delivery of branch financial services via telecommunication devices, where the bank customer can perform retail transactions by dialing a touch one telephone or mobile communication unit.
4. Online Banking:
Banks are considering online backings as a powerful value added tool to attract and retain new customers. Online Banking (Internet Banking) is a term used to perform transactions, payments etc. over the internet through a banks secure website. Currently the internationally usage of VISA or MasterCard online from Bangladesh is very limited, which is an obstacle in the way of the online workers, who has to perform online transactions frequently. As Pay Pal, a trusted 3rd party online Transactions Company is still not available in Bangladesh, the banks should come forward and take steps to solve this problem. It will boost the purpose of making Digital Bangladesh.
5. Internet banking:
Internet banking refers to the use of internet as a remote delivery channel for banking services which permits the customer to conduct transactions from any terminal with access to the internet. It is the WWW through which banks can reach their customers directly with no intermediaries. Internet banking in true sense is still absent in Bangladesh. Only 7 out of 48 banks are providing some banking services via internet that include account balance enquiry, fund transfer among accounts of the same customer, opening or modifying term deposit account, cheque book or pay order request, exchange rate or interest rate enquiry, bills payment, account summary, account details, account activity, standing instructions, loan repayment, loan information, statement request, ,cheque status enquiry, stop payment cheque, refill prepaid card, password change, L/C application, bank guarantee application, lost card (debit/credit) reporting, pay credit card dues, view credit card statement, or check balance. The core banking activities like fund transfer to third party, cross border
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E-Banking system in banking sector A case study on United commercial Bank Limited transactions and so on are still uncovered by internet banking offered by the scheduled banks in Bangladesh.
6. PC banking or PC home banking:

PC banking refers to use of personal computer in banking activities while under PC home banking customers use their personal computers at home or locations outside bank branches to access accounts for transactions by subscribing to and dialing into the banks' Internet proprietary software system using password. PC banking or PC home banking may be categorized into two types such as online banking and Internet banking.
4.7 Features of electronic E-Banking

With business processes becoming increasingly digitized, business models, and, with them, the structure of credit institutions, are changing. The following characteristics of E-banking are therefore at the center of banking supervisors interest. Overcomes national borders: Owing to the virtual nature of electronic commerce, the transaction of banking business is no longer confined to national borders. Much the same applies to the relationship between bank products and non-bank products that means supervisors will need to corporate even more closely with foreign supervisory authorities than in the past. Depends on It: The secure and efficient deployment of ICT will become a crucial strategic factor in the success of electronic banking. Every stage in the value-added chain from development through production to the marketing of financial products is depended on IT. Most importantly, this dependency, coupled with the innovation momentum of the internet, will increase the strategic and operational risk faced by banks. Prepared by-Md Nizam uddin chy 30
E-Banking system in banking sector A case study on United commercial Bank Limited Enhance competition: Several factors have conspired to induce this effect. The greater ease with which prices and products can be compared has enhanced market transparency; the market entry barriers for new competitors have been lowered; the spatial and temporal constraints on competition have been removed; internet or online banking customers display little brand loyalty; and e-banking customers are focusing ever more on costs and profits margins Some other features usually include:
Transfer of funds between accounts Payment of bills; View balance and statement; View and maintain standing orders; View direct debits;
4.8 CONSUMER & BUSINESS VIEW OF E-BANKING The customer perspective-the value proposition:
E-Banking system in banking sector A case study on United commercial Bank Limited An electronic banking solution must provide sufficient value to persuade the customer to move away from cash. However, cash is an incredibly versatile medium of exchange-it is universally recognized as a store of value, it is accessible, portable and divisible. So what are the factors that are value by the customer? They include: features (for example, the improved personal safety from having less cash to carry); accessibility of the service; affordability and ease of use. Features: Many early electronic banking initiatives were designed to reduce the cost of transaction for the financial institution as much as to deliver value to the customer. However, an electronic banking solution can be designed as a low cost bank account on a card or telephone, with a number of features valuable to customer, such as cash withdrawals and cash-back transactions, deposits, payments and transfers. Addedvalue services can be provided such as loyalty programmers, person-to-person transfers, airtime top up for mobile phones and government payment. Acceptability: Stuart Rutherford (2000) has shown the poor to be sophisticated users of financial services. Although there may be an age bias in the acceptability of e-banking solutions, practical experience has demonstrated that the bias towards paper based record keeping in developing markets is far lower than might be expected. Accessibility: walking many kilometers to be able to access the service is inconvenient and costly for customers, so saturation of an area with the service is preferable to a wider, thinner distribution-banking has the potential to provide accessible, convenient financial services because it no longer requires a bricks and mortar infrastructure, operate by the permanent staff of a financial institution.
Affordability:
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E-Banking system in banking sector A case study on United commercial Bank Limited Customers on low incomes should find the transaction affordable. Charges need to be designed around a greater volume of low value transactions, probable charging customers a fee per transaction rather than a percentage per transaction, as is the case with visa and master card. For certain value-added transactions, like person-to-person money transfers, where alternatives are much more expensive it should be possible to charge a premium. Ease for use: System should be simple to use, fast and user friendly. Service should be standardized so that wherever the solution is used the customer is familiar with the procedure followed. Customers should have ready sources of advice, whether this is through call centers, through publicity or through physical presence.
4.9 The institutional perspective- the business case

From an institutional perspective, the electronic banking solution should increase profitability. This means careful consideration of functionally, building volume through segmentation, fees and charges, efficiency controlling development costs, distribution channels, partnerships and developing multiple business cases. Functionality There is a continuing debate over the level of functionality that should be provided by electronic banking solutions. Established commercial banks with a large bricks and mortar infrastructure and expensive banking system have an incentive to maintain the status quo. Although they have made huge proprietary investments in electronic infrastructure, in back office systems, and in ATMs and merchant networks, it is newer banks with a lower investment in physical infrastructure who stand to benefit more from falling development costs for back office systems and the rapidly reducing cost of communications of ATMs and of POS devices.
Segmentation
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E-Banking system in banking sector A case study on United commercial Bank Limited Segmentation within an e-banking initiative is one key ot profitability. Segmentation implies using the e-banking platform to sell differentiated service to different groups of customers. Segmentation allows financial institutions to match customers with optimal products and delivery channels. However, as the profit potential and the cost of serving each segment differ, it may be necessary to serve several highly profitable segments in order to build the infrastructure to support a mass-market solution. Some of the most obvious segments include: Own customers: An existing customer base is the most obvious market segment for electronic banking. Clearly, extending electronic services to existing customers risks cannibalizing products and services. Against this, is the expected benefit to be gained from decongesting banking halls and processing transactions at lower cost. Distribution Business-to-business use of electronic banking allows the transfer of value between distributors and their customers, without the physical transfer of cash. This considerably reduces the risk to distributors. Government Government make a number of transfer payments , e.g pension and benefits payment. Community phones Community phones take mobile phone technology in to communities , usually under the brand of the mobile telephone company.
4.10 Micro finance/ credit union cards

E-Banking system in banking sector A case study on United commercial Bank Limited Micro finance programmers or credit union can operate an advance electronic solution through partnership with a financial institution, or through a collective approach
4.11 Controlling development costs

Any technology based project is at risk of significant cost overrun and electronic banking is no exception. Fortunately, cost dynamics are changing with the introduction of low cost ATMs. ATMs are now available at US$1000 a machine, compared with an earlier price of $35000. Price of pos device is also falling and they are increasing in functionally. Another factor in cost control is the nature of the relationship that financial institutions has with the developer of an e-banking solution at any time and provide disaster recovery at a very low cost .
4.12 Distribution
Crafting a distribution strategy is at the heart of the any electronic banking solution. Developing a mass- market distribution network means moving beyond up market retailers , restaurant and hotels populated by credit card holders, to reach less wealthy debit card holders
4.13 ELECTRONIC BANKING TECHNOLOGY

There a number of options facing institution thinking about investing in electronic banking for the mass market. This article does not attempt to provide a detailed comparison of the different technical options. In brief, however, the options include the following.
4.14 PERSONAL DIGITAL ASSISTANTS

E-Banking system in banking sector A case study on United commercial Bank Limited An increasing number of micro finance programmers are introducing personal digital assistants (PDAs). PDAs are small hand-held computers that can run specialized programs to manage MFI and client records.
4.15 AUTOMATED TELLER MACHINES (ATM)

These are associated with magstripe or smart cards. ATMs can be fully functional teller machines hat accept deposits, dispense cash and can be programmed with other functions. Or they can be cash dispensers only. ATMs are expensive to own and operate but offer the financial institution a much cheaper way of processing a large volume of withdrawals than through over-the counter operations. ATMs are typically online, and therefore require reliable and affordable communications and power.
5.1 Present Status of e-Banking
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E-Banking system in banking sector A case study on United commercial Bank Limited E-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 tele banking, internet banking, and online banking facilities working within the branches of individual bank in a closed network environment. As a part of stepping towards e-banking, the FCBs have played the pioneering role with adoption of modern technology 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 e-banking that satisfies customer demand in banking activities electronically throughout the world are PC banking or PC home banking that include online banking, internet banking, mobile banking, and tele banking.
5.2 Application of e-banking system in Bangladesh

1. Electronic funds transfer at point of sale (EFT/POS):
This is an existing method and as the name suggest, the financial transaction is complete at the point of sales. It uses special card-readers located at the merchant premises and the cards of the consumers are inserted in these machines while the transaction is being processed. These are two variations in this technique and these are given below.
2. Credit card transactions:
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E-Banking system in banking sector A case study on United commercial Bank Limited This is normal credit card transaction. When the purchase transaction is complete, the data about the transaction is automatically captured against the credit card account and the card issuer transfers the money to the merchant and raises a monthly bill with the card user. The improvement and automation could result in immediate transfer of funds to the merchant, with the record of transaction kept with the credit card issuer.
3. Debit card transactions:

This is new form of value transfer. Here, an account holder of a bank or any shopping center has a token in the form of data- bearing card. This card authenticates the consumer. On completion of the transaction, the consumer centers his/her pin code and this facilitates the transfer of money from the consumers account to merchants account. Compared to the credit cards, is this case the finance transaction is more direct
4. Bank network: As the customer base of each bank spreads all over the country or in some cases over many countries, the branches of the banks are interconnected through computer networks such that, the bank could provide instant services to the customers, even when they are away from their home base. Further a number of banks exists and represent different groups of customers who deal with each other and this needs that the different banks also must be connected through network to facilitate transaction between their customers. In figure, represent the bank network where the work-stations/servers of each bank branch are connected to the others through a computer network and each bank interacts with other only at the level of head office. It is also possible to put all branches of all banks on a single network.
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Branch o Bank A
Branch of Bank A
Branch of Bank A
Head office of
Branch of Bank B
Branch of Bank B
Branch of Bank B
Head office of
5. Electronic cheque:
This system is still evolving. The electronic emulates the real world check issuance and the transaction take place on the internet. The consumer issues a digital cheque to the merchants bank. The bank gets the cheque cleared and credits the amount to the account of the merchant. One could see that in the electronic cheque system a number of organizations such as the banks of the consumer and the merchant, the clearinghouse and the certificate authority are involved besides the consumer and the merchant. The web browsers will have to support the cheque formats. The consumer cheque is authenticated through a digital signature of the consumers bank. This will assure the merchant that the account is a genuine one. Certificate authority might certify the user and merchant. This will prove the identify of the customer and the merchant. No repudiation is achieved by encoding using the private key or the digital signature of the consumer. The public keys of the banks are to be made available to the customers of both banks.
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E-Banking system in banking sector A case study on United commercial Bank Limited 6. Payment though smart card: The technology and applications of smart cards are still evolving. Smart cards generally have a processor and memory. They are capable of storing cardholder information, their bank account details, their private and public encryption keys, etc. some cards permit bi-directional transfer of money, and can record a few latest transactions. These cards can be read by or operate with special card-readers, which can work independently on telephone or internet line or through a computer. Alternately, the cards of a certain value can be purchased like telephone cards and can be used without any reference to the bank by the recipient of the money. The recipient will get the money transferred to him from the card-issuing firm. The transactions will the smart card are represented in figure
Customers bank
Merchants bank
. Customer
Seller/merchant/ven dor
Figure: Transaction with smart card
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E-Banking system in banking sector A case study on United commercial Bank Limited 6. Electronic cash: A parallel development to the conventional money is electronic cash. E-cash is issued by some organization, which is recognized by all the merchants and consumers, and approved by the government. This may be called e-mint. The consumer purchases ecash of some value from e-mint, like prepaid telephone card by instructing his/her bank to transfer the money equivalent to the E-cash issuer. The e-cash certificates will have unique identification numbers that are assigned by the consumer and recorded by the E-mint. E-cash can be obtained in different denominations like Tk. 1000, 500, 100, 50,50,20,10,5,2,1,0.5,0.25,0.10,0.05, 0.01. this E-cash is nothing but a series of numbers each of which has some assigned value in a chosen currency and authenticated by the bank through some mechanism like E-signature of the bank.
Banking software use in banking sector in Bangladesh:

At the head office level95.45% of banks use banking software. 24 types of software are used. Most used software in the banking sector Name of the software Pc bank Bexi bank UIBS/IBS A to Z CBS Flora bank MOBS/MCBS Agrani solution BB4K+ Egale SBIL Bank master Number of banks use 28 12 8 5 5 3 3 3 2 2 2 2
Among the banking software used in the banks 51.47% have been developed in house, 47.06% are off-the-self [OTS], only 10.47% are using both OTS and in house
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E-Banking system in banking sector A case study on United commercial Bank Limited software. Majority of the software are developed locally both for cost reason and convenience with the local business practice. 95% of banks have management information system (MIS). But only 38% MIS are integrated to the transaction processing system. For international payment settlement 53% of banks become members of SWIFT. 09% banks have Reuters terminal for exchange transactions.
5.3 Activation of electronic banking system in united commercial bank of Bangladesh

Electronic banking system is hundred percent (100%) activation in Bangladesh. Electronic payment systems include credit and debit cards, online banking and electronic cash. Most of us commonly make use of electronic payment facilities. Electronic banking system eligible for the act of check clearing, ATM, debit card, credit card, Remittance services, Stock brokerage service, mobile banking, tele banking, internet banking, online banking. The transfer of funds from one party to another over electronic media is known as electronic payment system. The different approaches to electronic payments include, card payment, mail order and online payment. Online transactions are a daily activity for almost everyone today. With the introduction of the Internet, online transactions became easy. Most of the big product and service companies made their network presence prominent and started interacting with their customers over the web. Online shopping soon became popular. With financial institutions, walking on similar lines, people around the world began performing their financial transactions through the Internet. Credit and debit cards became a commonplace feature and gave impetus to the electronic payment systems.
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5.4 ATM Service of UCBL

United Commercial Bank Limited launched their smart card - ATM card, credit card, debit card & utility bills payment card all in a single card in the name & style of "UCB Card" . The features of the "UCB Card" are as under : The UCB card provides round the clock banking through ATM from which customers can avail: Cash withdrawals Balance inquiry Mini statement Cheque book request PIN charge Utility bills payment facilities
POS terminals at the merchant end will operate/provide service throughout the day & beyond banking hours to offer:Debit transaction Credit transaction Account information UCB card loading Online or offline
The "UCB Card" network can operate both online in case line failure. Since your UCB card can store account information within & record transaction offline ATM & POS services can be accessed without the need for online authorization from your bank. UCB card help you for self-service banking any time anywhere though ATMs & POS terminals. The bank has joined the Shared ATM network Bangladesh, provided by Electronic Transactions Network Limited (ETN) a joint venture with united group of Bangladesh and IFS international, USA. Polls of seven banks have joined the network. Under this system any customer of any member bank has access to any of the ATMs situates at different locations of Dhaka UCB. The service is providing 24
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E-Banking system in banking sector A case study on United commercial Bank Limited hours cash withdrawal and utility bills payment facility to Banks customers. Initially 12 ATMs have been installed in Dhaka UCB. The network will gradually be extended to other cities of the country. It is expected that about 500 ATMs will be installed by the next few years under this Network.
5.5 SMS Banking Of UCBL

Finance at customers fingertips UCB SMS Banking brings your account to customers fingertips. It enables the customers to send and receive textual information anywhere 7 days a week and 24 hours a day. It allows them to access information as well as receive transaction alerts on their account by using mobile phone. Facilities available at present: Access your account from anywhere in the world through a mobile phone. Ability to make balance inquiries without visiting the bank. Ability to receive mini statement of last 5 transactions. Transaction Alert lets you get informed whenever there is an ATM/POS transaction on your account.
Is this a free service? This value added service is offered absolutely free. Your mobile operators standard charge for SMS will be applicable for sending SMS message. Is registration Mandatory?-Registration is mandatory for SMS Banking. For registration you have to visit your bank branch. You can download the registration form our website. Who is eligible?-An account holder of UCB , Mobile Number for UCB SMS Centre. A single mobile no is used by UCB SMS Centre to receive and send SMS messages based on the services chosen by the customers. The customers are provided with the mobile phone number in time of registration by the branches.
5.6 Mail Receive and Dispatch Section
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E-Banking system in banking sector A case study on United commercial Bank Limited Banking is the business of correspondence. Lot of mail comes to the bank and dispatch from the branch daily. Lot of my document causes much loss for bank. That is why bank has to record all Mail received and dispatched through the bank.
Mail receiving:
All mail comes to the bank recorded in this desk. For this reason a register book maintained called inward mail register. A number is given on receiving mail and records particulars of document in the register book.
Mail Dispatching:
Before dispatching mail from the bank must record in outward mail register. A number is given on the mail. Destinations, date of dispatch are recorded in that register book.
5.7 UCB IT & Online banking:

With the aim of creating paperless office environment, UCB started the automation process by procuring international banking software Finical from Infuses Technologies Ltd. The software has been installed in seven branches with real time on-line banking where all aspects of the branch Rights Share Offer Document operations are done through this banking solution. UCB started the implementation process of real time online banking in another 10 branches. The bank is still to go a long way to start real time online banking in all of its branches. However, it is worth mentioning that the IT Division of the bank is engaged in developing some software covering the Bangladesh Bank reporting, internal management reporting and payroll system etc. The amazing and dazzling touch of the fastest banking practice of United Commercial Bank Limited is outcome of exciting banking software where I relished the expertise. PC Bank opened up the door of new horizon for the smarter, better and faster banking. The arenas covered by the PC BANK are as follows:
1. System Information
This option of PC BANK comprises some crucial aspects for the bank, which are deciding factors for the bank. This option lets the bank calculate interest rate,
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E-Banking system in banking sector A case study on United commercial Bank Limited government tax, service charge, and service charge. The options of system are as follows: Set up branch code, Set up parameter file, Set up overdraft limit, List of overdraft limit, Set up currency file, Maintain user password, Set up report parameter, Group of company information, System password.
2. Online
Online setup sub menu allows the lets the bank officers edit information of an existing accounts or close an account or mark an account as freeze, stop payment or reactivate the stop or freeze account. The features of online are: New Accounts, Maintaining existing account, Inquirers, Instant statement, Add or delete stop payment, Mark clearing cheque, Maintain series, Enter instructions, Interest on demand, Alpa search, Standing order. Term loan.
3. Transaction input
Transaction input sub menu of PC Bank lets the officers enter new transaction and check a transaction in multiple way. The convenient features held by transaction input are as follows: Enter transaction, List transaction, Edit transaction, Display transaction, Total transaction.
4. Update
The update sub menu lets the bank officers update balances of the account in the customer master file and preparing amount for general ledger interface: Update all, Update transaction, Update clearing, and Update quick clearing.
5. Report:
The report sub menu helps the bank generate daily reports, management reports and customers advice. Daily report, Management report, Customer advice, Quarterly report, Optional report.
6. Statement:
The statement sub menu is used to generate customer statement of all type of applications. It can easily provide any record of specified account and balances. This sub menu can print out statement of any year. Cyclic, On demand, Up to date statement.
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7. Period Process:
Period process is another vital sub menu of PC bank as it is useful for calculating and applying interest to the customer account and debit incidental, service charge, excise duty from customer account. Month end processing, early end processing, Debit charge, Print interest report, Interest report of classified advances.
8. General Ledger:
The General ledger sub menu is crucial to maintain the books of accounts of the bank. This menu can generate chart of account definition, balance sheet, income and expenditure statement and statement of affairs. GL parameter, GL transaction, GL update, GL report, GL report, GL statement, GL period process.
9. Bills and Registers:

The bills and registers sub menu lets the bank issue, collect, cancel or point bills instruments. Bills Payable, Letter of guarantee, FC/TC register.
10. Back up and restore:

The back up and restore sub menu is very vital for taking data backup and restoring them when necessary. Back u , Format, Restore, Listing.
11. Day start process:

The day start sub menu lets the bank initialize transaction data files and run necessary processes. The features of this menu are as follows: Initialize new accounts, Initialize new clearing cheque, Initialize GL transaction, initialize all transaction, Processing of standing order, Process matured FDR, Process monthly benefit deposit, Process matured BCD, and Process matured DPS, Process for dormant and inoperative.
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6.1 Impact of E-Banking

Currently some of the banks of Bangladesh are providing electronic services to their customers. We cannot say they are completely following electronic way. Because they offer some of the functionalities of the complete electronic banking like intrabank transaction, central bank authority handles the procedure. Banks as well as employees are beneficiated after implementing information technology in bank because this system has some advantages over traditional system. Advantages are as follows: Process handling becomes faster. It includes day end process, month end process, monthly/yearly interest calculation; fixed deposit receipt process, scheme process and loan process etc. in traditional system, to accomplish audit, government officials need to go to every bank. After IT implementation they do not need to go to banks rather they can collect the same information through network and audit report can be generated within few minutes. Traditional system it is time dependent to transfer money from city to remote area and also a matter of some investor. During the transfer time the money is idle so its a great loss for the bank as well as customers. Electronic system can be used to transfer money within a few seconds (intra-bank).
6.2 Prospects of e-Banking

E-banking is now a global phenomenon. Apart from the developed countries, the developing countries are experiencing strong growth in e-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-payment system and technologies. Internet banking in Korea has increased at a rapid pace. Korea is also leading in online brokerage and mobile banking. In Southeast Asia, internet banking is also developing rapidly in Thailand, Malaysia, and Singapore and to a lesser extent in Philippines (Mia et. al. 2007). In Prepared by-Md Nizam uddin chy 48
E-Banking system in banking sector A case study on United commercial Bank Limited Nepal, ATMs are the most popular electronic delivery channel for banking services but only a few customers. Banking agent is a post office or other similar institution that make payment as per bank instruction facilitating there mote payment system are using internet banking facilities. Among others, Nepal's commercial banks have adopted credit card, tele-banking, and SMS-banking. 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. 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. In addition, Bangladesh Bank is implementing the RPP project for modernizing national Payment and settlement system. It is expected that the BACH including BACPS and BEFTN would start functioning from September 2009 followed by the development of inter-bank online network. The project plans to go for real time gross settlement (RTGS) by 2012. It has been made mandatory for all head offices of the scheduled banks to be connected with Bangladesh Bank for satisfying BACH and BEFTN. These efforts would allow the scheduled banks to be connected to each other for conducting inter-bank online transactions in near future and this would smoothen the introduction of e banking in Bangladesh.
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6.3 Scope of electronic banking system

For any electronic banking system the major cost goes for sitting up a backbone network. For a country like ours its a matter of huge investment. Fortunately Bangladesh railway has a high-speed optical fiber network parallel to the railway path owned by Bangladesh railway. Its total capacity is about 2.5gbps. This fiber optic network covers almost every important parts of the country. Hence, it can be used as the backbone network of electronic banking in Bangladesh. Some of the multinational companies like grameen mobile phone company, ranks IT of Bangladesh have already started to use this high-speed optical fiber network and they are providing their services even in rural area. So we can utilize this opportunity it case of banking in Bangladesh.
6.4 Constraints of Electric Banking in Bangladesh

Emergence and growth of Electric Banking of a country depends on the following factors: 1. 2. 3. 4. 5. 6. Availability and growth of telecommunication instructors. ICT operation in electric banking sectors. Culture of using electric banking. Legal and regularity framework The users of electric banking are in urban areas. Infrastructure of villages is not suitable for electronic banking.
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6.5 Electronic Payment Systems and their Disadvantages

Most of the online banking sites as also the online financial transaction sites require you to open an online account with them. You need to register to the institution in order to be authorized to perform money transactions with them. This involves a username and a password, which implies the need of password protection. You also need to maintain an account per organization, which can make it bothersome for some of you. For secure online transactions, the site that hosts your account should follow strict security policies. If the passwords are susceptible to being hacked, it can mean a serious financial loss for you. Banks or financial institutes, which maintain your personal information, cannot afford to expose it to hackers. There is a potential risk of your personal and account details being stolen. One of the most several disadvantages of electronic payment systems is that of identity theft. The available security measures can prevent the sensitive information from being exposed. But it is important to use virus protection or firewalls for your computer. It is important to carry out money transactions over a secures ever. There is a great risk involves in the theft or the losing of the smart cards. In case the cards fall in unsafe hands, there is a danger of the expenditure of your entire bank balance. There are measures to inform the concerned authorities about the loss of the card. But, the time between losing the card and informing the authorities is critical. Unauthorized users may carry out transactions in your name during this period of time. Mostly, electronic cash is based on cryptographic systems. The transactions are encoded by means of numeric keys while the transaction details travel across the net. Though electronic payments are resistant to forgery, the keys are vulnerable to attack. This was not to discourage you from taking to electronic payments. It was rather to make you aware of the disadvantages of electronic payment systems. While we are moving towards a paperless environment, we are inviting issues related to electronic security.
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7.1 PROBLEMS/FINDING OF UCBL

To Researcher best efforts, Researcher has gone through E-banking system and talk to most of the officers and executives to know the problems. There are facing in their everyday banking service. Researcher left no stone unturned to find out the problem UCB and achieved they have made so far. Following are the findings Researcher have traced out during internship program period with UCB. Substantial growth has been observed in every area of deposit in the bank for last five years. The bank has seen an enormous profit earning in consecutive year starting from the year 2006 to 2010. Some of the branch in the bank are over manned and some under manned. Absence of job rotation is observed in most of the branch. Most of the officers are lagging behind in terms of modern technological know how. Junior levels Officer are not highly qualified and skilled in the bank. Absence of Mobile and Internet Banking is observed in the bank. One stop Service is not available in most of the Branch. Inefficiency and inadequate knowledge of the bank management about the Ebanking. 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. Biased-ness of the management of bank towards foreign software. Legal barriers and appropriate policy framework. The bank has made a very good progress due to its visionary management people as well as its appropriate policy and implementation. Through the researcher have tried Prepared by-Md Nizam uddin chy 52
E-Banking system in banking sector A case study on United commercial Bank Limited to give some findings in the thesis program, it is not possible to go depth of all activities of the Branch because of time limitation. However, highest effort has been given to achieve the objectives the thesis program.
7.2 SOWT Analysis

Strength
Very much experience E-banking in United Commercial Bank Limited E-Banking is strength able because of is not full online service delivery in United Commercial Bank limited. Using SWIFT for faster transaction service in very fast Maximum number of branch
Weakness
Manpower in not sufficient Marketing policy is not well setup IT sector is lengthy Smi-online
Opportunity
E-banking can provide various facilities and help the new entrepreneurs to inform about the foreign business. That is bank can organize seminar, workshop, etc. for new entrepreneurs on regulars basis. It may increase the branch promotional in and image. Transaction procedures can be easier and able to banking.
Threats
Illegal business operation by the some clients Other private banks Global economy is so much faster than UCBL Government policy Unhealthy and illegal competition Unstable political situation Inflation
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8.1 Recommendations of E-banking for Bangladesh

Since 1992 the e-banking is going on all over the country but it is still many theoretical and technical hurdles. E-Banking is an important part of banking sector. UCB aims to ensure best customer service and committed to protect the customer interest through E-banking. It is a prime responsibility of the bank to overcome the problem detected in our report. UCB is one of the most potential Banks in the banking sector. It has a large portfolio with huge assets to meet up its liabilities and the management of this bank is equipped with the expert bankers and managers in all level of management. So it is not an easy job to find out the drawbacks of this bank. We would rather feel like producing my personal opinion about the Practical experience and practices in UCB. For the improvement of the E-banking system of UCB will follow the Some recommendations are listed below to overcome and improve the currents: 2. 3. 4. 5. 6. 7. 8. 9. 10. E-banking system should be more flexible. E banking should develop their communication among branches. The decision making process should be faster SME section of banking should be more flexible. Need to establish more ATM booths. E-banking service should be according to the customer expectation and E-banking service should be resolve the entire problems very quickly that the The bank should arrange the demonstration programs for the clients to enjoy the Government should be pioneer to develop the IT infrastructure.
satisfaction. customer face in online transaction. service properly. 11. Providing the reasonable service charge and fees. 12. Establishing more ATM booth in every branch area. 13. Providing fast cheque book delivery time. 14. Providing fast debit & Credit card delivery time. 15. Establishing separate information desk in every branch.
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E-Banking system in banking sector A case study on United commercial Bank Limited 16. Ensuring availability of necessary banking documents 17. The bank should introduced internet banking and mobile banking as soon as possible. 18. The bank officials should maintain proper documentations incase of account opening. 19. Making sure the proper job allocation among officer. With overall discussion we can conclude the issue of E-banking future in Bangladesh is that it can be very prosperous. With the resource Bangladesh has, it can be beneficial for the companies too. Just need some proper cares to be taken. It is also needed that the Govt. steps forward. The Bank companies need to deal with appropriate authority to make E-Banking more available in Bangladesh.
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8.2 Conclusion
United Commercial Bank Limited have introduced a new dimension in the field of innovative and benevolent banking in our country. The bank has successfully made a positive contribution to the economy of Bangladesh with in very short period of time. Its profit is gradually increasing. United Commercial Bank Limited to expand their facility for the customer by E-banking which automated delivery banking product and services and interactive communication channel. The United Commercial Bank Limited transfers the funds between account holders through the online banking system. The Bank ensures quality services to the customers for E-banking banking system. It plays a great role in PC banking, tele banking, ATM and online banking etc. For better growth and healthy economic position, it should introduce new and lucrative long-term credit schemes especially for new investors and schemes for poverty alleviation like micro credit. We hope United Commercial Bank Limited do more work for socio-economic development besides their banking business. To keep pace with ever-changing uncertain domestic business environment and face the challenges of revised global economic scenario, the bank should be more pro-active and responsive to introduce new marketing strategy to hold the strong position in home and abroad. We think UCB will become market leader creating new brand image. But it is true that present market is very competitive. To be the market leader UCB must follow some strategies like these. Firstly, the firm must find ways to expand total market demand. Secondly, the firm must protect its current market share through good defensive and offensive actions. Thirdly, the firm can try to increase its market share further, even if the market size remains constant.
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References & Bibliography

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 14. 15. Annual Report of the company (20010-2011). Guidelines, Circulars, Instruction Circulars, GB Manual etc. of UCB. Negotiable Instrument Act. 1981 The Bankers Books Evidence Act. 1891 The Bangladesh Bank Order 1972. UCB website: www.ucbl.com UCB intranet homepage. Magazine, Newspaper etc. UCB Head Office. Consultation with Managers and senior. Rose, S. P (1999) Commercial Bank Management, International edition , Irwin McGraw-Hill. Zonal Office, Chittagong Division, UCBL. Company Profile of UCB Money laundering prevention act. 2000.
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E-Banking system in banking sector A case study on United commercial Bank Limited

1.2 Objective of the study

1.3 Methodology of the Study

Prepared by-Md Nizam uddin chy

Primary Data Sources

Secondary Data Sources

1.4 Limitation of the Study

Prepared by-Md Nizam uddin chy

couldnt assist me properly in spit of their willingness.

2.1 Introduction & History of UCBL

2.2 Vision, Mission, & Value Statement of the Bank

2.3 Management of the bank

Prepared by-Md Nizam uddin chy

2.4 Management Aspects of UCBL

The Management hierarchy of the UCBL is follows:

Prepared by-Md Nizam uddin chy

Additional Managing Director

2.5 Organizational Status of UCBL

Prepared by-Md Nizam uddin chy

d) Capital and Reserves

1. Capital & Reserve

Prepared by-Md Nizam uddin chy

2.6 UCBL Products & Services

2.8 Methods of Clearing & Bills

2.8.1 Automated Clearing House

Prepared by-Md Nizam uddin chy

2.8.1 Procedures for Clearing

2.8.3 Dishonor of Cheque

Prepared by-Md Nizam uddin chy

2.8.4 Outward Clearing

2.8.5 Inward Clearing

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2.9.1 Inward bills for collection

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2.9.2 Outward bills for collection

Prepared by-Md Nizam uddin chy

3.1 Performance analysis of overall Deposits of UCB

354.61 342.53 165.04 235.47

Source: Annual Report (2007-2011)

Prepared by-Md Nizam uddin chy

3.2 Interest rate offered for different deposit schemes:

01. 02. 03. 04. 05.

12.00 12.25 12.00 12.00 12.25

3.3 Highlights on overall activities on UCBL

Prepared by-Md Nizam uddin chy

Prepared by-Md Nizam uddin chy

5,972,914,597 2,945,804,975 1,171,183,581 2,067,544,585 759,660,529

4,733,126,609 2,181,434,083 392,823,621 1,120,803,000 292,504,875

2010 3,835,413,988 5,577.09 8,995.97 4,730,493,379 3,629,963,500 2,179,795,853 4.19

2011 5,148,417,337 9,188.82 7,497.72 5,972,311,826 5,172,311,826 2,945,202,204 3.48

3.4.2 BLANCE SHEET

Prepared by-Md Nizam uddin chy

Total shareholders Equity Non controlling interest

5,070,000,000 19,506,665,453 115,506,326,932 3,288,087,277

1,120,000,000 15,171,379,647 93,560,701,744 1,966,349,087

4.1 Definition of Electronic banking system

4.2 Advantages of e-banking system

Prepared by-Md Nizam uddin chy

4.3 DISADVANTAGES OF E-BANKING

Prepared by-Md Nizam uddin chy

4.4 THE CONCEPT OF MONEY-THE BEGINNING OF EBANKING

4.5 GROWTH OF E-BANKING:

Prepared by-Md Nizam uddin chy