Term Paper

Comparative analysis of e-banking to the commercial bank of Bangladesh

Submitted to
Ms. Rabaya Bosri
Assistant Professor of Finance and Course Coordinator (MBA Program)

MD AL HASAN MAMUN
ID: 1844601006
Introduction
Electronic banking, Use of computers and telecommunications to
enable banking transactions to be done by telephone or computer
rather than through human interaction. Its features include electronic
funds transfer for retail purchases, automatic teller machines (ATMs),
and automatic payroll deposits and bill payments. Some banks offer
home banking, whereby a person with a personal computer can make
transactions, either via a direct connection or by accessing a Web site.
Electronic banking has vastly reduced the physical transfer of paper
money and coinage from one place to another or even from one person
to another.

Overview of the e-banking in BD

E-banking services have been available in Bangladesh since 2001. As of
2007, 29 out of 48 banks have offered online financial services
(Rahman, 2007). In Bangladesh, research has been done on electronic
commerce issues, computer usage, Internet usage, telephone and
electronic banking et al., 2007). The reason for the lack of complete
adoption of e-banking in developing countries like Bangladesh is an
important research that will be addressed by this paper. In other words,
despite this growth of IT Worldwide, Bangladeshi banks continue to
conduct most of their banking transactions using traditional methods.
Understanding the reasons for the lack of such technological innovation
in developing countries such as Bangladesh will develop a fruitful
research. This paper is aimed at to determine economic prospects of e-
banking and to explain the present scenario of banking sectors in
Bangladesh and at the same time it demonstrates the scope and
benefits of E-banking compared with the existing system. This paper
also tries to present actual situation of e banking in the marketing point
of view in Bangladesh.

Present scenario of e-banking of Commercial bank

in BD:

Dutch-Bangla Bank
E-Banking                 
Electronic banking is an umbrella term for the process by which a
customer may perform banking transactions electronically without
visiting a brick-and-mortar institution.
E–Money
E-money includes electronic debit and credit system, smart card. The
smart card has been defined many ways, but is generally defined as
“portable data storage device with intelligence (chip memory) and
provision for identity and security.”
Smart Cards
“Portable data Storage device with intelligence (Chip Memory) and
provisions for identity and security” (Barbara A. Good, 1997).
Automated Teller Machine (ATM)
An ATM is simply a data terminal with two input and four output
devices.
ATM has two input devices- card reader and keypad. An ATM has four
output devices- Speaker, Display screen, Receipt printer, cash
dispenser.

SMS Banking
SMS- Banking is developed to provide transactions related to client’s
card account via SMS.
Tele-banking
Tele-banking is a form of remote banking which is essentially the
delivery of branch financial services via telecommunication devices.
Online Banking
Online banking (Internet banking) is a term used for performing
transactions, payments etc. over the internet through a bank’s secure
website.

Bank Asia:
 Technology continues to be a strong pillar in the Bank’s idea to
attract the banking experience of its customers. Bank Asia has
been one of the pioneers in introducing Online Banking and in
2018, it covers 119 branches, 4 Agri/SME branches, 4 SME
centers, 149 own ATMs, more than 10,000+ shared ATMs and
others. Online banking system is a great way to reduce wastage of
paper.
  Currently Bank Asia account holder is facilitating e-commerce
transaction such as e-ticket purchasing of bus, train, airways,
cinemas & movies, mobile flexi-load, hotel booking, bill payment
such as hospital bill payment, advertisement bill payment,
passport fees payment, WASA, DESA, Qubee bill payment,
computer accessories & service related payment, e- shopping etc.
by the debit/credit card of Bank Asia with less expense & in faster
time from any time anywhere.
 We have also integrated Internet banking system to NPBS on first
phase and through this connectivity our customers can transfer
fund from their Account to Inter-Bank Accounts and Debit &
Credit Cards real time and vice versa.

 In our banking system recently ‘e-Commerce’ has incorporated for

its valued customer where Bank plays as payment partner &
account holders can shop online through internet banking, Debit
Card or Credit Card with less expense & in faster time from any
time anywhere. Through SSL, Bank Asia Limited A/C Holder can
purchase products & Services from 175+ Merchant websites.

Agrani Bank Limited:

The term Internet Banking or E-Banking or both are used as
supplement. E-Banking is the one of the major part of E-Financing. E-
Banking is web-based Banking. In other words, E-Banking refers to the
banking operations, which is done over World Wide Web (WWW).
However, more comprehensive and well-established definition is given
by the United Nations Conference on Trade and Development
(UNCTAD). This definition covers almost all area of E-Banking. Internet
banking refers to the deployment over the Internet of retail and
wholesale banking services. It involves individual and corporate clients,
and includes bank transfers, payments and settlements, documentary
collections and credits, corporate and household lending, card business
and some others (UNCTAD, 2002). E-Banking information architecture
is modeled as client-server architecture. A client operating through a PC
linked to internet opens the special E-Banking site of his bank and then
using a set of special secure numbers, gets access to his bank accounts
and has the opportunity to consult them, as well as to make all
necessary payments and transfers from his personal accounts. When
the transaction number is exhausted the bank sends him a new set of
numbers for his individual transfer sessions. In some cases, the bank
provides customized software. The bank software program can also be
utilized offline, for example for preparing the payment orders offline
and then making the actual order online. The client receives all
numbers separately, mainly by mail. The bank also provides clients with
similar facilities in its premises so that clients can use the bank
equipment such as an ATM or a special facility linked to the main
terminal facility called MultiMate, permitting them to effect the same
account examination payment and transfer operations without
consulting the bank staff. Now a day due to emerging global economy,
e-commerce and e-business have increasingly become an accessory
component of business strategy and a strong catalyst for economic
development. The new information technology is becoming an
important factor in the future development of financial service
industry, and especially banking industry. Internet banking is a system
which the customers can access from his home, office or anywhere in
the world through internet. To avail this service, the customer needs to
get a user ID & password from his bank & he needs to have access to a
computer with internet.
Online Banking or Internet Banking or E-Banking allows customers of a
financial institution to conduct financial transactions on a secure
website operated by the institution, which can be a retail or virtual
bank, credit union or building society. It may include of any transactions
related to online usage.

To access a financial institution’s online banking facility, a customer

having personal internet access must register with the institution for
the service & set up some password (under various names) for
customer verification. The password for online banking is normally not
the same as for telephone banking. Financial institutions now routinely
allocate customer numbers (also under various names), whether or not
customers intend to access their online banking facility. Customer
numbers are normally not the same as account numbers, become a
number of accounts can be linked to the one customer. The customer
will link to the customer number any of those accounts which the
customer controls, which may be cheese, savings, loan, credit card &
other accounts.

To access online banking, the customer would go to the financial

institution’s website, and enter the online banking facility using the
customer number & password. Some financial institutions have set up
additional security steps for access, but there is no consistency to the
approach adopted.

Prime Bank Ltd

The vision of Prime Bank Ltd. is to be the most efficient Bank in terms of
service, profitability and technology application. Ongoing researches to
innovate products and fine-tune the existing products will lead to
advantageous position. MasterCard credit cards business and newly
introduced ONLINE banking has opened up new possibilities not only
for improved customer service but several windows for profit
generation. Installation of SWIFT and integration of Treasury functions
in both local money market and international foreign exchange market
are expected to yield better growth in volume and earnings.
While banking is undergoing changes to accommodate increasing needs
of customers, technology is considered as a key element for achieving
competency based on reliability. PBL is working to further improve its
computer system in order to provide clients with new IT products and
services such as ATM, ONLINE BANKING and POINT OF SALES
transactions. From PBL’s perspective, Technology will help Prime Bank
Ltd. to operate more efficiently and improve its productivity. Therefore,
investment in technology infrastructure receives highest priority. While
technology takes care of much of the routine functions, employees will
have more time to spend with their customers providing greater range
of advice and services.

Standard Chartered bank:

Standard Chartered bank offers the customer multiple banking services.
The account holder can transfer funds from their account to other
accounts. With the net banking feature, customers can issue the
chequebook, demand draft, and open a new account as well; also,
customers can close the loan account as well. Many other services will
be offered to the account holders.
 The best part of Standard Charted Bank is they do not charge for
internet banking service. If the bank's account holder transfers the fund
to any third party and uses IMPS, RTGS, or NEFT mode, the third party
might charge fees for the transfer. This is the easiest process to use a
banking service. Access your account 24/7. No need to wait in the
queue, just one click and done

Comparative analysis:
Dutch- Bank Asia Agrani Prime Bank Standard
Bangla Bank Ltd Chartere
Bank Limited d bank
Total 346.5 408,717 10 billion
9.2 billion 789
assets billion 353,800 USD USD billion
BDT USD
ATM Internet Bank Asia AGENT Real time SC mobile
And Banking Smart App, BANKING. Inter and app.
Onlin Features. ATM BALANCE Intra Bank ATM
e POS. TRANSFER Fund
servic Internet BETWEEN Transfer,
e list payment AGRANI ATM
gateway. BANK
Internet AND
payment BKASH.
gateway FOREIGN
Rocket. REMITTA
Agent NCE
Banking SERVICE.
ATM ATM
SERVICES.
LOCKER
 SERVICE.
UTILITY
BILL
COLLECTI
ON.
OTHER
SERVICES.
VAT
Online
Payment
Intere Savings Savings Savings Special Up to. 50
st Deposit Account Account Notice lakhs2.75
rate 0.50-2.00 Avg. Balance Deposit %
below Tk. 1 3.50% (SND) Above.
Fixed Lac 2.50% Short a) Below 50 lakhs
Deposit3. Avg. Balance Notice Tk. 1.00 to Up
00-3.50 Tk. 1 Lac & Term crore 0.50% to.40
above but Deposit b) Tk. 1.00 Crores3.2
below Tk. (SNTD) crore and 5%
1.00 Account above but Above.40
Crore2.50% 3.50% below Crores0.5
Avg. Balance For 3 Tk.25.00 0%
Tk.1.00 months crore 1.00%
Crore and c) Tk. 25.00
above2.50% 5.75% crore and
STAR Savings For 6 above but
Account months below Tk.
Avg. balance 50.00 crore
below Tic 5.85% 2.00%
50,0000% For 1 year d) Tk. 50.00
Avg. balance & above crore and
Tk. 50,000 above but
6.00%
but below below Tk.
 Tic1.00 100.00
Lac2.00% crore 2.00%
Avg. balance e) Tk.
Tk.1.00 100.00
Lacbut crore and
below Tk above2.50
5.00Lac2.50 %
% 02.Savings
Avg.balance Deposit
Tic 5.00 a)Below Tk.
Lacbut 50 lac1.25%
belowTk. b)Tk.50 lac
25.00 &above but
Lac2.50% below
Avg.balance Tk.1.00
Tk. 25.00 crore1.75%
Lacbut c) Tk. 1.00
below Tic. crore &
50.00 above2.00
Lac2.50% %
Avg.balance 03.Prime
Tk. 50.00 Premium2.
Lacbut 00%
below Tic 04. Prime
1.00Crore2.5 Excel 2.00%
0% 05. Prime
Avg. balance Power2.00
Tk.1.00Crore %
and 06. Fixed
above2.50% Deposit
Total 181 There are 921 146 1,200
branc branches total 90 branches branches branches
h branches of
 Bank Asia
Limited
situated in
26 districts
in
Bangladesh.
Total There are 190 ATM There are 122 ATM 41 ATM
ATM total booth total 10 booth booths
booth 1273 ATM
list ATM booths of
booths of Agrani
Dutch- Bank
Bangla Limited
Bank situated
Limited at Dhaka
situated district in
in 61 Banglades
districts h.
in
Banglade
sh.

Conclusion
E-Banking, the latest generation of electronic banking transactions, has
opened up new window of opportunity to the existing banks and
financial institutions. Most of the banks have their own websites but
not all of them offer internet facilities. The main reason of this is that
the banks do not have the IT infrastructure and proper security
features. In Bangladesh most of the people are illiterate and obviously
they are technology ignorant. But among the literate portion many of
them have computer phobia. So these people can’t trust on the
internet banking services. To gain the confidence on internet banking
the overall computer literacy must be developed. With that goal
government has taken initiative even in the root level to develop it
literacy in the country.
However, with banking customers growing increasingly comfortable
with the digital lifestyle, but Bangladeshi customers are not aware
about e-banking in Bangladesh. They are not fully understanding the
power of technology and seek to leverage it to enjoy better control
over their banking operations. To conclude that e-banking may also
provide other benefits. For instance, creating new markets, and
reducing operational costs, administrative costs and workforce are
increasingly important aspects for the banks’ competitiveness, and e-
banking may improve these aspects as well. So, Bangladeshi banks
should take these advantages of e-banking in Bangladesh economy as
early as possible.

References

https://www.britannica.com/topic/electronic-banking
https://www.icommercecentral.com/open-access/ebanking-of-
economical-prospects-in-bangladesh-1-10.php?aid=38393
https://www.assignmentpoint.com/science/computer/online-
banking-of-agrani-bank-limited.html
https://www.assignmentpoint.com/business/banking/online-
banking-aspects-of-prime-bank-limited.html
http://www.uniindia.com/everything-need-to-know-about-
standard-chartered-internet-banking/press-
releases/news/2340487.html
https://www.dutchbanglabank.com/
https://www.dutchbanglabank.com/electronic-banking/core-
banking.html
https://www.dutchbanglabank.com/electronic-
banking/atm.html
https://www.icommercecentral.com/open-access/ebanking-of-
economical-prospects-in-bangladesh-1-10.php?aid=38393