1.

1) PROPOSITION OF THE STUDY

1.2) ORGANIZATION OF THE REPORT

1.3) STUDY GOAL /OBJECTIVES OF THE

INTRODUCTION

STUDY
1.4) RATIONALE OF THE STUDY
1.5) IMPORTANCE OF THE STUDY
1.6) STUDY AREA
1.6) METHODOLOGY OF THE STUDY
1.8) LIMITATION OF THE STUDY

INTERNET BANKING

1. INTRODUCTION
1.1. PROPOSITON OF THE STUDY
For over a decade, information technology has significantly affected the
banking industry .Banks and other financial institutions have improved their
functions as a financial intermediary through adapting various information
technologies. Generally when the information technologies combine with
functions of banks and financial institutions, it is called electronic banking.
Among various electronic banking technologies internet banking is the latest
banking technology and the most rapidly diffused banking technology
through out the world. Now, in a world which is becoming increasingly open
as a result of the internet and www, internet banking has been gaining
ground around the globe. This offers banking institutions a new frontier of
opportunities and challenges further augmenting competition in the global
banking market.
Since the launch of Internet the large planet has become a smaller one. It has rendered enormous
impacts on business sectors. Remarkable development in ICT (Information and Communication
Technology) has introduced a global revolution in banking sectors. The global
trend in business arena set some challenges that cannot be fulfilled with the
help of the traditional banking system.
The survey of current banking system in Bangladesh reveals the fact that it
requires rapid modification and adaptation to keep harmony with the world
economy business. It becomes more obvious by observing the increased
number of customers in some modern banks while others are losing them. In
the context of Bangladesh, a country of more than 140 million people, it is to
be realized that there is no other option for us than to join the current trend.

INTERNET BANKING

Otherwise it is almost impossible to bring any sort of fruitful achievement for

the country.
At present, people are very often scared of doing any banking function with
most of the bank of Bangladesh. For, they still follow the traditional paperbased system. It, then, becomes cumbersome to perform even a simple
financial service such as account checking. Therefore, the existing banking
system in our country is awkward, slow and error-prone. It, in one hand, fails
to
meet the customers demand and, on the other hand, it causes some
significant losses both for the banking authority and traders. Electronic
banking, on the other hand, solves the above problems. Furthermore, it
opens up some other salient aspects such as increased foreign trade and
foreign investment.
In order to cope with the changing technology DBBL pursuits internet
banking services keeping in mind to hold up their position

in the global

competitive world providing better services that customers expect being a

man in the twenty first century.
1.2. ORGANIZATION OF THE THESIS
1. The paper is organized in the following manners:
2. The first chapter describes the objective, rationale, importance, study
area, methodology and the limitation of the study.
3. The second chapter gives a clear notion of the literature review of
internet banking and the current state of internet banking in
Bangladesh
4. The third chapter presents DBBLs profile, mission, vision and core
objectives.

INTERNET BANKING

5. The fourth chapter is organized with the light of the internet banking of
DBBL
6. The fifth chapter consists of SCBA of IB, prospects of IB and the
government policy for IB.
7. Then the findings and concluding remarks of this paper are described.

1.3. OBJECTIVES OF THE REPORT

The sensible motives of preparing the report on Internet Banking are to depict the overall
scenario of banking sector at a glance with the light of ICT through the following grounds:

Why does internet banking get momentum over traditional banking system?
What are glowing attributes of internet banking?
Whats the social cost and benefit of internet banking with respect to Bangladesh?
Whats the internet banking system of DBBL?
Does DBBL internet banking provide securities with respect to its customers
confidentiality?

To discern the DBBL internet banking authorization by the Bangladesh Bank

INTERNET BANKING

1.4. RATIONALE OF THE STUDY

An immense development has been brought by the scientists in the field of information
technology. Internet banking is the innovative product of such advancement of information
technology. After this proliferation of technology what sorts of changes found in the human
civilization, how internet banking ripples the mind of the people at the twenty first century,
what the reacts towards the new technology of the society, how it impacts the dimension of
operations of the financial institutions and ability to provide security about the customers
confidentiality are the immanent driving forces behind me to opt this topic and make a
analysis.

1.5. IMPORTANCE OF THE STUDY

Internship is an integral part of our BBA Program. Each business graduate has to prepare
report that carries a weight of 3credit hours after internship. As a student of business
discipline I am bound to do it to fulfill my course obligation. And so I have picked this
vibrant topic to accomplish my report.
Internet banking is the latest banking technology and the most rapidly diffused banking
technology through out the world. Now, in a world, which is becoming increasingly open as a
result of the internet and WWW, internet banking has been gaining ground around the globe.
This offers banking institutions a new frontier of opportunities and challenges further
augmenting competition in the global banking market. Electronic payment international
(2001) indicated that 39% of US households had access to internet banking and 18% of them
used the service. Also Pastore (2001) predicted that 87% of community banks would offer
internet banking in 2003 to meet consumers needs.

INTERNET BANKING

Due to the immense proliferation of ICT at the twenty first century, the whole world turns
into a planet. The ripple of ICT revolution hits the business sectors and so the business takes
a new shaped as an E-business. The radical changes of ICT compelled the financial
institutions to be involved in ICT to cope with the changing modern business trend. As a
third world country, Bangladesh has a practicable opportunity ahead though the existing
banking system is far behind to reach the expected level in the global banking system.
Thus, in order to get a share of the opportunities and to face the new challenges, the
government of Bangladesh provided the legal framework for domestics banks to offer the
internet banking services.
Internet banking is no longer a matter of debate. The concept of internet banking is not so
common in Bangladesh. But the people who are aware of it really appreciate the benefits it
offers. I could say that it has just come to light in Bangladesh. However at the pace where it
is growing brings necessity to identify the issues associated with it and finds a solution.
Legal infrastructure is a must for implementing ICT-based banking services. Bangladesh
bank along with the concerned agencies should work out a plan to develop and enact the
following regulatory documents: e-banking regulation, digital signature law, dispute
settlement law, amendment in evidence act, etc. Central bank forms a "center for internet
banking technology and management" to support the banks with latest technological
development in the banking world and provide expert support for ICT implementation. Its an
opportunity to expand IB.
For any electronic banking system the major cost goes for setting up a backbone network for
a country like Bangladesh 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 2.5 Gbps. This fiber optic covers almost every parts of the
country. Hence it can be used as the backbone network of electronic banking in Bangladesh.

INTERNET BANKING

Some of the multinational companies like Grameen mobile phone company, Ranks ITT of
Bangladesh have already started to use this high speed optical fiber network and they are
providing their services even in rural areas. So we can utilize this opportunity in case of IB in
Bangladesh.
After studying in this area I have got the overall scenario of the countrys internet banking
state and the obstacles on the way of ramification. It will make a room for me to annex my
valuable recommendations.

1.6. STUDY AREA

Internship is an integral part of our BBA Program. I have done my internship in Dutch
Bangla Bank, Foreign Exchange Branch, 36, Dilkusha, Dhaka. I have opted Internet
Banking of Dutch Bangla Bank as my study area.
1.7. METHODOLOGY
Research goals is to make a feasible study at problems and issues, scrutinize investigate
interconnections of multifarious variables that remain surrounded us. Research produces
bodies of knowledge; contribute towards the development of literature of the professions and
academic disciplines. As a formal investigative process, research takes place at different level
of scientific sophistication or kinds of epistemology .So, research in various branches of
academic disciplines operate its study through its own different ways. Research in Business
Studies focuses on describing, understanding and interpreting business phenomena and
processes and how it affects the business entities and the society. This study is based on both
primary and secondary data.

INTERNET BANKING

PRIMARY DATA:
A structured questionnaire has been used to get data on the demography and the behavior of
300 personal banking consumers of the online banks. The respondents were chosen randomly
while they were actively involved in banking transaction.
A structured questionnaire has also been used to get data on the demography and the
behavior of 50 personal of DBBL banking consumers of the online banks. Bank personnel
were interviewed to collect data on the internet banking services offered by the bank.
SECONDARY DATA:
Online banks websites had been the sources of getting information on the services offered by
those banks. Apart from them, for literature review different scholarary journals, books and
internet had rigorously been used.
DATA ANALYSIS
No statistical tools are used. Only qualitative analysis is duly performed. For social-cost
benefit analysis simple mathematical calculations are done to cast the idea to the readers.
1.8. LIMITATION OF THE STUDY
The limitations of my study are
1. A country like Bangladesh is not so developed in the IT Sector. So I can not give a clear
notion of IB of the country.
2. This is not fully internet banking because all transactions must be done by bank and
customer cannot make any transactions by his home PC.
3. Server utilization is not shown here under different loads.
4. Response time is not measured under different loads.
5. Complete information about how IB thrusts the bottom line of the income statement is
not available.
INTERNET BANKING

2.1) INTERNET IN GENERAL

2.2) CONCEPTUAL UNDERSTANDING OF
INTERNET BANKING
2.3) GLOWING ATTRIBUTES OF INTERNET
BANKING

LITERATURE REVIEW

2.4) THE LEVEL OF BANKING SERVICE

OFFERED THROUGH INTERNET.
2.5) INTERNET BANKING IN BANGLADESH
2.5.1) ENTRANCE OF INTERENET
2.5.2.INTERNET IN BANKING SECTOR
2.5.3) CURRENT STATE OF INTERNET
BANINNG IN BANGLADESH

INTERNET BANKING

2.6) CONSUMER BEHAVIOR OF INTERNET

BANKING
2.7) FACTORS AFFECTING ADOPTION OF
INTERNET BANKING
2.8)MOMENTOUS OF INTERNET BANKING
OVER TRADITIONAL BANKING

2. LITERATURE REVIEW
2.1. Internet in General:
Digital technology and new communication systems have made a spectacular change in our
lives. We are now living in a borderless virtual society. Computers are increasingly used to
create, store and transmit information. Multifarious transactions are going on through the
information high way which is universally called internet. When two or more computers are
connected a network is created internet.
2.2. CONCEPTUAL UNDERSTANDING OF INTERNET BANKING:
The very concept of internet banking was something that was more prevalent in the
technologically developed parts of the world .Internet banking both as a medium of delivery
of banking services and as a strategic tool for business development, has gained wide
acceptance internationally and is fast catching up in Bangladesh with many banks entering
the fray. So internet banking or online banking refers to the deployment over the internet of
retail and wholesale banking services.
Internet banking involves use of internet for delivery of banking products and services which
starting from collection of information to assess the need for the customers to feed back
collection. The process includes with both back office and front desk operation.
INTERNET BANKING

10

According to the Oxford Dictionary (2004)

Internet banking is banking transactions carried out electronically, without involving the
physical deposit or receipt of cash or checks: maintenance of a bank account by means of
computer and telecommunications equipment and software.
E-banking comprises various formats or technologies including telephone (both land line and
cell phones) banking, direct bill payment (electronic fund transferor EFT) and PC or internet
banking.
2.3. GLOWING ATTRIBUTES OF INTERNET BANKING:
Any time banking, anywhere banking and any place banking are the glowing attributes of
internet banking system. Internet banking is no longer time or location bounded and it offers
a large amount of facilities which were absent in traditional banking system. The growing
popularity of internet banks stems from the fact that their services are much more attractive
than those offered by traditional banks. It offers a cost efficient alternative to telephone and
branch banking due to the relatively low maintenance and update expenses. It does not
require any human interaction at the bank end.
2.4. THE LEVEL OF BANKING SERVICES OFFERED THROUGH INTERNET:
For users, internet banking provides 24+hoursa-day access to banking services. The primary
services provided by e-banks are any branch transactions, fund transfer, bank statement,
paying utility bills and checking account balances. Mobile banking, loans, brokering, share
trading, service bundling and a host of other financial services are being added to this
primary services.
ONLINE

NO OF ONLINE

SERVICES

BANKS PROVIDING

BANKS PROVIDING

THESE SERVICES IN

THESE SERVICES IN

BANGLADESH

BANGLADESH

ANY BRANCH

24

ONLINE SERVICES

PROVIDE LC

INTERNET BANKING

NO OF ONLINE

11

TRANSACTION
CHANGE OF

23

POS

10

22

UTILITY BILL

10

PASS WORD OR
ID
ATM

PAYMENT
BANK

22

SMS BANKING

12

WEB SHOPING ON

STATEMENT
EFT

INTERNET
INTERNET

11

PHONE BANKING

BANKING
T-NO OF BANGLADESHI BANKS PROVIDING DIFFERENT ONLINE SERVICES

Khorshed Khokon (2003) describes these activities in a different wayCustomers need an internet access service. As an internet banking customer she will be
given a specific user Id and a confident password. The customer can then view his account
balance via online. To ensure that customers personal data can not be accessed by anyone
but them, all reporting information has been secured using Version and Secure Sockets
Layer(SSL)
Again a study on Business Internet Banking in India shows that the level of banking
services offered through internet can be categorized into three types:
1. The basic level services are the banks websites, which disseminate information on
different products and services offered to customers and members of public in general. It
may receive and reply to customers queries through e-mail.
2. Simple transaction websites which allow customers to submit their instructions,
applications for different services, queries on their account balances etc, but do not
permit any fund based transactions on their accounts.

INTERNET BANKING

12

3. Business internet banking services are branch transactions, fund transfer, bank statement,
paying utility bills and checking account balances.

2.5. Internet Banking In Bangladesh:

2.5.1. ENTRANCE OF INTERNET:
Internet came late in Bangladesh. In the late 80s, Bangladesh was repeatedly invited to get
connected to the submarine fiber optic information super highway link but she didnt
respond. After that, Bangladesh had no option other than to use satellite uplink with VSATs,
connecting to Hong Kong and Singapore based hubs. First, UUCP e-mail came in 1993. Then
IP connectivity came in 1996. In June 1996 the Bangladesh government decided to allow
private companies to act as Internet Service Provider (ISPs) using VSATs. In 1998 the
governments decision to withdraw all import duties and VAT from all computer hardware
and software brought the prices of computer down to a level affordable by the middle income
house hold in Bangladesh.
2.5.2. INTERNET IN BANKING SECTORS:
The foreign banks are the pioneers in adopting electronic banking in Bangladesh. Most of the
foreign banks are using the computerized transaction system and taking advantage of the
superior technology by attracting customers and providing inter-branch and inter-bank
linkage. Foreign banks through successful use of a global network have increased the
timeliness and accuracy of information, benefiting its customers, employees and also
management.

INTERNET BANKING

13

The most extensive use was by the large foreign banks such as the American Express Bank
with an emphasis on networks of computers to help with reducing costs and increasing the
speed of settlement of transactions. Most of the 28 banks of Bangladesh use computerized
system but they do not yet offer online service. Standard Chartered Bank first launched
internet banking in August, 2000.

2.5.3. CURRENT STATE OF INTERNET BANKING IN BANGLADESH:

To draw an assumption about the current condition of IB, a survey is conducted in 2 national
and 14 private banks. Participant banks are Butch Bangla Bank Ltd, Premier Bank Ltd, First
Security Bank Ltd, Dhaka Bank Ltd, The City Bank Ltd, Exim Bank Ltd, Jamuna Bank Ltd,
Prime Bank Ltd, NCC Bank Ltd, Eastern Bank Ltd, United Commercial Bank Ltd, Al-Arafa
Bank Ltd, Uttra Bank Ltd and BRAC Bank Ltd.
The use of internet banking in the national bank is zero. Only the service of linking A/Cs online
is present in Public Bank, but other services are absent in both the NCBs.
The scenario in PCB is better. Among 14 surveyed banks, four banks (like Premier Bank Ltd,
First Security Bank ltd, Dhaka Bank Ltd, Exim Bank Ltd) are only applying minor activities of
internet banking services.
Linking A/Cs online and foreign exchange rate update-these two services are provided by
remaining 10 banks. Besides these, the task of branch transactions, fund transfer, bank statement,
paying utility bills and checking account balances can be done through internet in these banks.
Financial sector of Bangladesh, like most developing countries, is dominated by banking
enterprises. Banks at early stages of history of Bangladesh were nationalized and there was

INTERNET BANKING

14

mismatch between assets and liabilities. In the early 1980s, the government of Bangladesh began
to reform the financial sector. Private Banks were allowed to enter the market and two
nationalized commercial banks (NCBs) were decentralized and another nationalized bank was
converted into a limited liability company and partially privatized. Currently, the banking sector
comprises of four NCBs, five government-owned specialized banks dealing with development
finance in specialized sectors, 30 private commercial banks (PCBs) and ten foreign commercial
banks (FCBs) (Ahmad, 2005).

TYPES OF SERVICES
TELE BANKING
ONLINE CORPORATE

1998
14%
A

2000
20%
8

2001
24%
12

BANKING
EFT
ATM
CREDIT CARD
DEBIT CARD
MERCHANT SERVICES TO

15.4
14
10
A
A

15
15.4
23
3.8
3.8

18
28

7.6

12

MERCHANT
INTERNET BANKING

18
12

T-INTERNET BANKING SERVICE {NOTES: (A) DENOTES DATA UNAVAILABILITY; (B) DENOTES SERVICE
UNAVAILABILITY}

NO OF LAND LINES

0.92

INTERNATIONAL INTERNET

10 MB

NO OF CELLULAR PHONES

MILLION
3.5

BACKBONE
VSAT PROVIDER

31

PAGING AND RADIO TRUNKING

MILLION
7000

VSAT USER

70

SUBSCRIBERS
TELEX SUBSCRIBERS
INTERNATIONAL TRUNK

1600
3

NUMBER OF ISPS
FIBER OPTIC CABLE

195
1800 KM

3700

NETWORK(UNDER RAILWAY)
INTERNET USERS

0.1

EXCHANGE
TOTAL INTERNATIONAL CIRCUITS

MILLION
T-TELECOMMUNICATION STATUS IN BANGLADESH
PARTICULARS

NCBS

INTERNET BANKING

PCBS

FCBS

15

COMPUTERIZED BRANCHES
NO
OF
BRANCHES
LINKED
WITHIN
BRANCHES
NO OF BRANCHES LINKED WITH OTHER
BRANCHES

37
7

51
12

100
26

1058

39

81

T-COMPUTERIZED BRANCHES IN DIFFERENT TYPES OF COMMERCIAL BANKS

Sonali Bank is the largest among the NCBs while pubali is leading in the private ones. Among
the 12 foreign banks standard chartered bank has become the largest in the country. Besides, the
scheduled banks, Samabai (cooperative bank), Karmasansthan (employment) Bank and Grameen
Bank are functioning in the financial section. The number of scheduled commercial banks is
6,271 as of december 2002. Of the branches, 39.95 per cent are located in the urban and 60.05
per cent in the rural areas. Of the branches, NCBs hold 3,608, PCBs 1,331 and specialized banks
1,298 (annual report, bb, 2002-2003).
Bangladesh Bank (BB) has been working as the central bank since the country's independence. It
has legal authority to supervise and regulate all banks. It performs the traditional central banking
roles of currency issuing and of being banker to the government and banks. It formulates and
implements monetary policy manages foreign exchange reserves and supervises banks and nonbank, financial institutions. Its prudential regulations include: minimum capital requirements,
limits on loan concentration and insider borrowing and guidelines for asset classification and
income recognition. BB has the power to impose penalties for non-compliance and also to
intervene in the management of a bank if serious problems arise. It also has the delegated
authority of issuing policy directives regarding the foreign exchange regime.
Under the light of the above discussion it is clear that in Bangladesh internet banking in
Bangladesh is in infancy state and used on very limited banks.
2.6. CONSUMER BEHAVIOR OF INTERNET BANKING:
This study reveals that two types of consumers of the internet banking in Bangladesh; one group.

REASONS

USAGE RATE (%)

INTERNET BANKING

16

NOT ADEQUATE SERVICE

45.8

DONT NEED TO ACCESS ONLINE BANKING

29.2

UNABLE TO OPERATE

12.5

NOT AWARE

12.5
T-REASON BEHIND NOT USING ONLINE BANKING

who uses the internet banking services and another group who doesnt use the online banking
First group consists 84% and second group consists 16%.
From the above table we see that 45.8% respondents informed that internet service is not
adequate and 12.5% of the respondents are not aware about internet banking. So we may
conclude that internet banking is now in the primitive stage but has an acceleration growth.
ONLINE SERVICES

USAGE RATE (%)

ANY BRANCH

7.2%

ONLINE SERVICES
PROVIDE LC

USAGE RATE (%)

A

TRANSACTION
CHANGE OF PASS

POS

33.3

99.6

UTILITY BILL

7.9

WORD OR ID
ATM

PAYMENT
BANK STATEMENT

SMS BANKING

7.9

EFT

9.9

WEB SHOPING ON

INTERNET
INTERNET BANKING

15

PHONE BANKING

T-SERVICES USED BY USERS

NOTES: (A) DENOTES SERVICE NOT AVAILABLE

Out of 300 consumers of online banks 252 (85.3%) are male and 48 (14.7%) are female. in
comparison of user and non-user based on gender, female 22.9% are found non user which is
nearly 10%greater than users family.

INTERNET BANKING

17

VARIABLES

CATEGORYS

COMBINED
FREQUE

NCY
GENDER

PROFESSION

USERS
FREQUE

NON USERS
%

FREQUEN

NCY

CY

MALE

256

85.3

219

86.9

37

77.1

FEMALE

44

14.7

33

13.1

11

22.9

BUSINESS

93

31

82

32.5

11

22.9

SERVICE

123

41

95

37.7

28

58.3

STUDENT

70

23.2

64

25.4

12.5

HOUSE WIFE

14

4.4

11

4.4

6.3

T-DEMOGRAPHY OF USERS AND NON-USERS OF ONLINE BANKING SERVICES.

Business & service groups are the dominant users of internet banking among the professionals
that belongs to 32.5% and 37.7%.We may expect that with in very near future the using rate will
be reached in a satisfactory level.
2.7. FACTORS AFFECTING ADOPTION OF INTERNET BANKING:
Factors promoting or hampering the adoption of IT applications are numerous and have been a
prime concern for many researchers and practitioners. In this rich variety of literature adoption
fact ors were sometimes examined in the specific context. Both internal and external factors must
be taken into account when tying to understand a firms criterion for deciding about technology.
CONSUMER AWARENESS:
One of the more important characteristics for adoption or acceptance of any innovative service or
product is the creation of awareness among the consumers of the product or services. Consumer
go through a series of process in knowledge , conviction, decision, confirmation before they are

INTERNET BANKING

18

ready to adopt the product or service and the adoption or rejection begins when the consumer
becomes aware of the product or service.
EASE OF USE:
However awareness alone is not sufficient since consumers would reject an innovation if it was
very complex and not user friendly. In this context ease of use of innovative product or service as
one of the three important characteristics for adoption from the consumer perspective. First one ,
complexity-the degree to which the innovation is relatively difficult to understand or use. The
user friendliness of domain names as well as the navigation tools available in the website is an
important determinant for ease of use. The design of the web sites with appropriate use of
graphical user interface is also considered as an important determinant.

INTERNET BANKING

19

CONSU
MER
AWARE
NESS

DEMOG
RAPHIC
S

EASE
OF USE

DEALIN

ACCESS
IBILITY,
AVAILA
BILITY

G WITH
ERRONE
OUS

A D O P TI
ON OF
IN TER N
ET
B A N K IN
G

TRANSA
CTION
ACCUR
ACY

TECHN
O
PHOBIA

TRUST,
SECURI
TY AND
PRIVAC
Y

COST

RELUCT
A-NT

Preferen
ce for
personservice
s

Personal
Banking
Experien
ce

TO
CHANG
E

F-FACTORS AFFECTING ADOPTION OF INTERNET BANKING

TRUST, SECURITY AND PRIVACY:

These are very important factor for adoption of a new technology. Kenneth C. Laudon and Jane
P. Laudon had said
INTERNET BANKING

20

E-commetrce can not flourish unless there is an atmosphere of trust among buyers, sellers and
other related person involved in the online transaction.
TECHNO PHOBIA:
Consumers lacking of technological knowledge trust human beings more than the computers and
machines. Their fear for computers and technology generally grows and eventually develops into
a phobia for a technology. Thus technology phobia can also be a factor affecting the customers
reluctance to opt for internet banking.
ECHNOLOGY EXPERIENCE:
Prior technology experiences, especially prior computer experience have been found to impact
consumers beliefs about related systems and information technology. The more experience
consumer has about technology, the better will she understand new technologies and their
ramifications. Thus, consumers familiarity with technologies general facilities her appreciation
of the potential added value which is inherent in a technology.
PERSONAL BANKING EXPERIENCE:
Satisfied bank customers have more positive perception also about internet banking and, thus,
are to move more likely to online. A dissatisfied branch office customers may try internet
banking but only a satisfied customers adopt internet banking as their regular bill payment code.
RELUCTANCE TO CHANGE:
For customers to change their presents ways of operating and to take up new technology, it must
fulfill a specific need .unless such a need is fulfilled, consumer may not be prepared to change
the present ways of operating.
PREFERENCE FOR PERSONALIZED SERVICES:
A vast majority of bank customers would still like to opt for personal interaction when doing
their bank transactions. The personal touch of officers and managers adds value to each

INTERNET BANKING

21

transaction. In the context of Bangladesh, a personal relationship between customers and bankers
transcends many boundaries especially so in the rural areas.
COST OF ADOPTING THE INNOVATION:
In internet banking, two types of costs are involved. First, the normal costs associated with
internet access fees and connection charges and secondly the bank fees and charges. If
consumers are to use new technologies, the technologies must be reasonably priced comparative
to alternatives. In view of the Bangladeshi governments encouragement towards the digital era
essential costs have been kept at a minimum level.
AVAILABILITY:
The more widespread the access to computers and the internet, the greater the possibility of
internet banking.
WEB CONTEXT AND DESIGN:
Product information content, the amount of product information, product information format,
language and layout features affect customers satisfaction.
REFERENCE GROUP INFLUENCE:
The consumption of banking services may be influenced by several reference group of the
customers such as the personnel of the bank and the traditional ones such as friends and family.
Reference groups do influence the adoption of internet banking.
DEALING WITH ERRONEOUS TRANSACTION:
In addition, internet bank customers would also be curious to find out how the bank would
generally deal with erroneous transactions occurring in online transactions. Will the burden of
proof be on the customers or on the bank would be willing to settle the issue up front and
investigate the problem latter.
TRANSACTIONS ACCURACY SPEEDINESS:

INTERNET BANKING

22

There is a significant correlation between web-site down load speed and web user satisfaction. In
this context, the use of high resolution graphics and inefficient web servers has a significant
negative impact. As Bangladesh web services are at infancy state, this factor may not play a
major role in adoption decision.
DEMOGRAPHICS:
High income, relatively young age and good education have been found explaining the
acceptance of internet banking. Older consumers are found to have problems with new
technologies, and hence, are expected to have negative attitudes toward innovations. some
studies argue that the internet is male dominated.
2.8.) MOMENTOUS OF INTERNET BANKING OVER TRADITIONAL BANKING:
The internet banking gets momentous over traditional banking due to following conspicuous
dimension on IB

The transformation from traditional, bricks and mortar to e-banking has been
momentous. The facility of accessing their accounts from anywhere in the world by using
home computer with internet connection, is particularly fascinating to Non-resident
Bangladeshi and High net worth individuals having the multiple bank accounts

When it comes to cost aspect, cost per transaction through internet is less than that of
telephone transactions or that of physical branch transactions.
According to a study of Booz, Allen and Hamilton (1997), - The cost of a full-service teller
transaction is $1.07; a telephone transaction is 154 cents; an automated teller machine
transaction is 27 cents & a software based PC transaction is 1.5 cents. But internet based
transactions cost banks only a penny.
YAKHLEF (2001) REPORTS A TRADITIONAL PAYMENT COSTS $1.08, WHEREAS ON THE INTERNET THE
COST IS 13 CENTS OR LESS.

INTERNET BANKING

23

 The internet also offers banks the opportunity to better meet customer needs through
enhanced interaction, data mining and customization.

It does not require any human interaction at the bank end.

The advent of smart cards has made it possible to enable transactions in the virtual world
as well as physical world using electronic cash. the motto of the internet bank is
Any time banking, anywhere banking, any place banking.

Each internet users would be 50%-250% more profitable than the average banking
customers and internet customers will be some of the banking systems more profitable
customers representing close to30% of all retail banking profits.

INTERNET BANKING

24

3.1) COMPANY PROFILE

DBBL AT A GLANCE

3.2) MISSIOM
3.3) VISION
3.4) CORE OBJECTIVES

3. DBBL AT A GLANCE
3.1. PROFILE OF THE COMPANY:

INTERNET BANKING

25

Dutch-Bangla Bank Limited (the Bank, DBBL) is a scheduled joint venture commercial bank
between local Bangladeshi parties spearheaded by M Sahabuddin Ahmed (Founder & Chairman)
and the Dutch company FMO. DBBL was established under the Bank Companies Act 1991 and
incorporated as a public limited company under the Companies Act 1994 in Bangladesh with the
primary objective to carry on all kinds of banking business in Bangladesh. The Bank is listed
with the Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited.
DBBL commenced formal operation from June 3, 1996. The head office of the Bank is located at
Senakalyan Bhaban (4th floor),195, Motijheel C/A, Dhaka, Bangladesh. The Bank commenced
its banking business with one branch on 4 July 1996.
The bank is often colloquially referred to as "DBBL", "Dutch Bangla" and "Dutch Bangla Bank
DUTCH-BANGLA BANK LIMITED

TYPE
FOUNDED
HEADQUARTERS
KEY PEOPLE
INDUSTRY
PRODUCTS
EMPLOYEES

Private (Non-Government), DSE DUTCHBANGL

Dhaka, Bangladesh (1995)
Dhaka, Bangladesh
M Sahabuddin Ahmed -Founder & Chairman; Financierings-Maatschappij
voor Ontwikkelingslanden (FMO)
Banking
Banking services
1600

3.2. MISSION
Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a
commitment to social responsibility. "Profits alone" do not hold a central focus in the Bank's
operation; because "man does not live by bread and butter alone".
3.3. VISION

INTERNET BANKING

26

Dutch-Bangla Bank dreams of better Bangladesh, where arts and letters, sports and athletics,
music and entertainment, science and education, health and hygiene, clean and pollution free
environment and above all a society based on morality and ethics make all our lives worth living.
DBBL's essence and ethos rest on a cosmos of creativity and the marvel-magic of a charmed life
that abounds with spirit of life and adventures that contributes towards human development.
3.4. CORE OBJECTIVES
Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and
satisfaction and to become their first choice in banking. Taking cue from its pool esteemed
clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and
epitomizes its vaunted marques "Your Trusted Partner".

F-CORE OBJECTIVES OF DBBL

4.1) SEGMENTS OF DBBL IB

4.1.1) A/C OPENINIG AND ACCESSING INTERNET BANKING
4.1.2) INTERNET BANKING FEATURES

INTERNET BANKING

27

4.1.3) TERMS AND CONDITIONS OF INTERNET BANKING

4.1.4) SECURITY WITH INTERNET BANKING
4.1.5) INTERNET BANKING USERS MANUAL
4.1.6) BANGLADESH GOVERNMENT APPROVES OF INTERNET
BANKING
4.2) CARD PRODUCTS AND CHARGES
4.3) DBBLS ATM SERVICES
4.3.1) ATM NETWORK/DBBL NEXUS PARTICIPATING BANKS
4.3.2) DBBLs ATM LOCATION

INTERNET
BANKING OF
DBBL

4.3.3) HOW MUCH MONEY DBBL KEEPS IN EACH ATMs

4.4) DBBLS POS
4.4.1) POS SERVICE
4.4.2) POS LOCATION
4.5.STEPS OF DBBL TO PROVIDE SECURITY TO THE CUSTOMERS
4.5.1) DIMENSION OF SECURITIES DEMAND BY THE
CUSTOMERS
4.5.2) SECURITY THREATS
4.5.2.1) IT RELATED THREATS
4.5.2.2) NON-IT RELATED THREATS
4.5.3) SCURITY COUNTER MEASUREMENTS
4.5.4) DBBLS SECURITY COUNTER MEASUREMENT
4.5.4.1)PREVENTIVE MEASURE NT
4.5.4.2) DETERRENT MEASUREMENT
4.6) CONSEQUENCE OF DBBL IB
4.7)DEMOGRAPHIC FEATURES OF DBBL INTERNET BANKING
4.7.1) GENDER
4.7.2) PROFESSION
4.7.3) EDUCATION
4.8) SWOT ANALYSIS OF DBBL IB
4.9) ADOPTION THEORY & SBBL IB
4.10) PORTERS FIVE FACTORS MODEL & DBBL IB

4. DBBL INTERNET BANKING

DBBL Internet banking enables customer to access his/her personal or business accounts
anytime anywhere from home, office or when traveling. Internet Banking gives customer the
freedom to choose his/her own banking hours. It can save time, money and effort. It's fast, easy,
secure and best of all.

INTERNET BANKING

28

4.1. SEGMENTS OF INTERNET BANKING:

Major segments of DBBL internet baking are:
1. Internet banking features
2. A/c opening & accessing internet banking
3.

Terms & conditions of internet banking

4. Security with DBBL inter banking

5. Internet banking users manual
6. Bangladesh government approves of internet banking
4.1.1) A/C OPENING & ACCESSING INTERNET BANKING:
HOW TO OPEN ACCOUNT WITH DBBL
Opening of savings, current or FC account is not available in online. However the account
opening forms are available in this website. You need to download the required forms from this
websites and fill-in the forms, signature and attach photograph with the account opening form
and sent to us by courier at the following address (only for non-resident Bangladeshi)
The Executive Vice President and Head of IT
DBBL Data Center
Peoples insurance Bhaban (18th floor)
36, Dilkusha C/A, Dhaka-1000
Bangladesh
We will open the account with any of the branches of the bank and inform you immediately.
Once you have an account with us, you can open FDR on-line through internet banking and
enjoy a full range of services through internet, POS terminals & ATM.
HOW TO GET PASSWORD FOR INTERNET BANKING:
If you check the logon to internet banking link given in the menu list of this website you will be
asked to enter log in ID and Password.

INTERNET BANKING

29

F-1
F-1

INTERNET BANKING FEA

INTERNET BANKING FEA
TURES
TURES

A/C OPENING & ACCESSING INTERNET

A/C OPENING & ACCESSING INTERNET
BANKING
BANKING

TERMS & CONDITIONS OF INTERNET BANKING

TERMS & CONDITIONS OF INTERNET BANKING

SECURITIES WITH DBBL INTERNET BANKING

SECURITIES WITH DBBL INTERNET BANKING

BANGLADESH BANK APPROVES INTERNET BANKING

BANGLADESH BANK APPROVES INTERNET BANKING

INTERNET BANKING USER MANUAL

INTERNET BANKING USER MANUAL

The login is your customer ID which you can from your home branch. However you need to
Password from the data centre of the bank. Without Password you can not enter into the
Internet Banking system.
If you have an account with DBBL, you are eligible to get the password for accessing internet
banking. To get the Password you have to apply for it through your branch. the application form
obtaining the Password of internet banking is available in the FORM menu of this website.
You have to fill in the application form and send your branch for verifying signature and
onward submission to the data center. The data center will generate a password for you and print

INTERNET BANKING

30

in a secured Pin Mailer. The pin mailer will send to you. Once you get the pin mailer, open it to
get Password. When you will login the internet banking for the first time with this Password,
the system will force you to change it. You have to given a new password of your choice. We
recommend that you change your password frequently.
HOW TO OPERATE INTERNET BANKING
When you will access the internet banking. You will get the screen that contains the menu at the
left hand site. The contains My Account menu has 4 sub-menus such as Account Summary
Account Activity Account Details and Uncleared Funds. These can be used for the following
purpose:
Account summary
You will be able to view the list of your current, savings, term deposit and retail loan accounts
held and the current balances in each account in the account currency.
Account details
You can choose a particular account and see the account details depend on the type of the
account.
Account activity
You can see the transaction activity in a given account for the current period or a specified
period.

TRANSFER FUNDS
The Transfer Funds menu has 3 sub-menus such as Funds Transfer, Third Party Transfer and
Bankers Cheque Request. These can be used for the following purposes
TRANSFER FUNDS
You can transfer your fund from one your account to another your account with the DBBL
THIRD PARTY TRANSFER
This option will be disabled for the customers.

INTERNET BANKING

31

BILL PAYMENT MENU

The bill payment menu has only 1 sub-menu such as Pay Bills. This can be used for the
following purpose
PAY BILLS
You can make payment of your telephone, mobile, gas, water, internet service provider and
electricity bills, payments of fees for schools and universities. Before you get this service, you
have to inform us the name of the bills pay companies with your account / mobile number
provided by that company to you. We will link this company with your internet user ID. Once we
link them with your ID you will find them in the pay bill screen and can choose any one of them
for payment of your bill / fee. Your application form for internet banking contains a list of such
companies where you have to tick and provide account number / mobile number. If you have
already login ID and want to add additional company as bills pay company, please write to the
branch manager who will verify your signature and forward your application to the data centre.
The data center will link the company with your user ID.
The Standing Instructions menu has 4 sub-menu such as Standing Instruction View, SI Delete,
SI Initiate and SI Modify. These can be used for the following purpose

A Standing Instruction (SI) can be used to transfer a fixed amount your money from your one
account to another account in a pre-defined day of every month/quarter/year etc. Before you get
this service, you have to perform payee maintenance from the customer service menu.
In the user reference number type a reference like Payee-1, then type payee name, account
number with DBBL (any branch) and payment details. Then press submits and finally confirms
to link a payee with your account. This needs authorization from the data center before the payee
accounts appears in the pick list of the SI initiate screen. For authorization first maintain the
payee as mentioned the above in the internet banking system and then send a letter to your

INTERNET BANKING

32

branch manager with a request that you have maintained a payee. The list in the system for
initiating SI on their account as beneficiary with reasons, who will forward the same to the data
center for authorization.
We will link this payee accounts with your internet user ID. Once we link them with your ID you
will find them all in the 4 sub-menus of the standing instruction and can choose any one of them
for viewing /initiating/modifying the SI.
You can now
1. Set up a new standing instruction from the internet
2. inquire on an existing instruction
3. modify an existing standing instruction
4. delete an existing standing instruction
You can set up multiple instructions for each account and define the priority in which they
can be executed. The instruction can be set up for the recurring transfer at a pre-defined
frequency.
To initiate a SI, first choose source account from the list, then to account or
beneficiary account number. Destination account will appear automatically.
Now provide transfer account. Transfer currency will appear automatically.
Choose SI Execution Frequency from the list and set SI priority to 1, 2, 3 etc.
The first execution date is one on which the day will be executed at every
frequency. After the final execution date the SI will not be executed any
more. Against narrative field you can type a narration which will appear on
the account statement. it may be mentioned here the SI will retry 5 times for
the execution and if fails to get money will not try any more for the current
frequency.
The term deposits menu has 2 sub-menus such as Open Deposit and Modify
Deposit. These can be used for the following purpose
OPEN DEPOSIT:

INTERNET BANKING

33

The customer can open a term deposit (FDR) by transferring funds from one
of his current or savings accounts with the bank. He will get the TD number
online.
MODIFY DEPOSIT
The customer can modify the maturity and interest instruction details of the
existing term deposit accounts.
4.1.2. INTERNET BANKING FEATURES:
The following are the Internet Banking Features for DBBLs Retail and Corporate
Customers:

Account Summary: The Customer will be able to view the list of Current, Saving, Term
Deposit and Loan accounts with the current balance.

Account Details: The Customer can choose a particular account and see the account details
including unclear fund, limit, interest accrued etc.

Account Activity: The customer can see or print his transaction activity in a given account
for a particular period.

Transfer Funds: The customer can transfer funds from one of his accounts to another of his
accounts within the bank.

Third Party Transfer: The customer can transfer funds from one of his accounts to another
customers account within the bank.

Pay Bills: The customer can pay his utility bill (like Electricity, WASA, GAS, Telephone,
Mobile, ISP etc.)

Standing Instructions: The customer can setup, modify or delete standing instructions for
transferring fund from one of his account to another account (his account or 3rd party).

INTERNET BANKING

34

Open/Modify Term Deposit: The customer can open a term deposit by transferring funds
from one of his current or savings accounts with the bank. He can also modify the TD and
redeem / part-redeem it.

Loan Repayments: The customer can make payment of the loan installment from his CASA
account.

Statement Request: The customer can make a request for account statement for a required
period. The bank will manually service this request.

Cheque Book Request: The customer can make a request for a Cheque book.

Cheque Status Inquiry: The customer can choose an account and enter the Cheque number
for which the status should be viewed.

Stop Payment Cheque: The customer can mark his Cheque leaf as stop payment.

Interest Rate Inquiry: The customer can query on the interest rates on CASA & Term
Deposit Products.

Foreign Exchange Rate Inquiry: The customer can query on the Foreign Exchange (FX)
Rates using this function.

Refill Pre-Paid Card: The customer can buy a refill number for his pre-paid mobile phone
or ISP link.

Change Password: The customer can change his Internet Banking Password using this
function.
Extra Features for Corporate Customers:

Letter of Credit: The customer can initiate the LC application through Internet Banking.

Bank Guarantee: The customer can initiate the Bank Guarantee through Internet Banking.

Limits Query: The customer can view his Loan Limits and Limits Utilization through
Internet Banking. * 3rd Party transfer is not allowed as per Bangladesh Bank permission

INTERNET BANKING

35

4.1.3. TERMS & CONDITIONS OF INTERNET BANKING:

These terms and conditions provide information about the DBBL internet banking service
provided to User by DBBL and set out the rights and obligations of the users and DBBL, in
connection with the use of the DBBL internet banking service. In the event of any conflict
between these terms and conditions and Rules and Regulations governing the Users account
with DBBL, these term and conditions shall prevail
.
For the purpose of this document, Internet Banking refers to the internet banking services
provided by DBBL such as balance enquiry, details about transactions in the account, statement
of account, utility bill payment services etc. User, he/she and /or his/her means DBBL
customer using DBBL internet banking and DBBL means Dutch Bangla Bank Limited, a
company duly incorporated under the companies act 1994,having its registered office at Sena
Kalayan Bhaban(3rd ,4th ,5th and 10th floor) 195 Motijheel C/A,Dhaka-1000; and its branch or its
assigns in respect of which the service will be available.
APPLICATION FOR DBBL INTERNET BANKING
1.1.

These terms and conditions form the contract between the user and DBBL for using

internet banking. The user can apply in the prescribed form for use of internet banking.
DBBL at its sole direction to accept or reject any such applications.
1.2.

By applying for internet banking for the first time, the users acknowledge and accept

these terms and conditions. Notwithstanding anything contained herein, all terms and
conditions pertaining to the accounts shall continue to apply.

INTERNET BANKING USERS LOG IN ACCESS, PASSWORD AND SECURITY

PROCEDURE

INTERNET BANKING

36

1.

DBBL will pro vide the customer with unique customer identification and a temporary PIN
in the first instance

2.

As a safety measure, the user, as a customer should immediately change password upon
his /her first login. User is requested to change her/his password frequently thereafter as far
as possible.

3.

The customers acknowledge that the login ID and the password selected act as users
unauthorized signature. This signature authorizes and validates direction given just as an
actual written signature does.

4.

User is responsible for maintaining the confidentiality of his/her login ID and password.
User should agree that he/she will not under any circumstances disclose his or her password
to anyone, including anyone claiming to represent the bank or to someone giving assistance
on a technical help desk in connection with the service. It should be clear under stood that
bank employees do not need users password for any reason whatsoever.

5.

If user gives his/her password to anyone or fails to safeguard the secrecy, he/she does so at
his/her own risk because anyone with user password will have access to his / her accounts.

6.

If user forgets the internet banking password. he/she has to request for issue of a new
password by sending a written request to the Information Technology Division of DBB

7.

If customers password is lost or stolen, or is known by another individual, he/she must

notify DBBL immediately.

8.

The users agree and ac knowledge that DBBL shall in no way be held responsible or liable if
the users incur any loss as a result of information doing disclosed by DBBL regarding his
account or carrying the instruction of the user pursuant to the access of the internet banking
and the user shall fully indemnify and hold harmless DBBL in respect of the same.

SERVICE SOFTWARE AND HARDWARE REQUIREMENTS

INTERNET BANKING

37

1.

User is solely responsible for the maintenance, installations and operation of users
computer and the software used in accessing internet banking.

2.

DBBL shall not be responsibility if the internet banking system does not work properly due
to the failure of electronic or mechanical equipment or communication links, telephone or
other interconnect problems, normal maintenance, unauthorized access, theft, operator
errors, server weather, earthquakes, floods and strikes or other labor problems.

3.

DBBL will not be held responsible for any computer virus that affects customers computer
& the software while using internet banking or accessing internet banking through the
WWW.

CHARGES
1.

Charges are subjected to change from time to time at DBBLs direction.

2.

DBBL reserves the right to change and recover from the user relevant service charges, as
may be fixed time to time. The user hereby authorizes DBBL to recover such charges from
his/her account.

UNAUTHORIZED/FRAUDULENT ACTIVITIES
1.

Upon obtaining customers ID and password, user is requested to check the list of his / her
accounts with DBBL. If any of user account is missing, please inform this to DBBL
immediately. If a third party account is linked to users ID, please inform this to DBBL also.
Do not access it or do not perform any transaction on that account such activity if done, will
be treated as fraudulent activity.

2.

If user believes unauthorized transactions are made with his/her account, he or she should
change the password immediately and notify the DBBL

INTERNET BANKING

38

3.

The user should check the all statements for all of his/her accounts for any unauthorized
transaction.in case of any discrepancy in details of any transactions carried out in respect of
the account, in that event user should immediately inform DBBL in writing.

ON-LINE TRANSACTIONS AND UTILITY BILL PAYMENT:

1. User shall be responsible for all transfers transactions, opening time deposit account
and SI initiated through internet banking.
2. No third party transaction is allowed except utility bill payment through DBBL internet
banking.
3. The utility bill payment services is only available to customers of the DBBL internet
banking service and shall cover all the utility bill payments of different utility service
provider as mutually agreed between DBBL and the utility service provider.
4. The user should accept that he/she will be responsible for putting in the current account
number and transaction amount for the fund transfer request. In such case DBBL will
not be liable for any erroneous transactions incurred arising out or relating to the
customer entering wrong account number and amount.
5. Upon DBBL decision, there will be a transaction amount limit through internet
banking. Maximum amount of transaction limit can be subjected to change from time to
time at DBBLs discretion.
6. Any transaction made after the working hours or on public or bank holidays, the
transaction value date will be the next working day.
7. No transaction is allowed from a non-convertible taka account to a convertible account.
8. Any conversion rate of any foreign currency shown and interest rate are only for
customers convinced. It can not be taken as price quote from banks end.

MAINTENANCE OF SUFFICIENT FUND

1. The user shall ensure that there are sufficient funds in his/her account for transactions
through the internet banking.

INTERNET BANKING

39

2. DBBL shall not be liable for any consequences arising out of its failure to carry out the
instructions due to inadequacy of funds and/or credit facilities.
ANTI MONEY LAUNDERING
1. Customer should agree and confirm that he will not use this internet banking facility for
money laundering or violent any law related to the money laundering.
2. DBBL reserves the right to demand the explanation from the user regarding any matter
pertaining to money laundering law of the country.
PROPRIETARY RIGHTS
1. The user acknowledge that the software underlying the internet banking as well as other
internet related software which are required for accessing internet banking are the legal
property of the respective vendors.
2. The permission given by DBBL to access internet banking will not convey any
proprietary or ownership rights in such software.
3. The user shall not attempt to modify, translate, disassemble, decompile or reverse
engineer the software underlying internet banking or create any derivative product
based on the software.
GOVERNING LAW
1. These terms and / or the operations in the accounts of the user shall be governed by the
laws of Bangladesh, in force
2. DBBL may, in its absolute discretion, commence any legal action or proceedings
arising out of the terms for internet banking in any other court, tribunal or other
appropriate forum and the user hereby consents to that jurisdiction.
3. Any provision of the terms for internet banking which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of prohibition
or unforceability but shall not invalidate the remaining provision of the terms or affect
such prohibition in any other jurisdiction.

INTERNET BANKING

40

CHANGES OF TERMS
1. DBBL shall have the absolute discretion to amend or supliment any of the terms at any
time. Such change to the terms shall be communicated to the user. By using any new
services as may be introduced by DBBL, the user shall be deemed to have accepted the
changed terms.
TERMINATION ON INTERNET BANKIN
The user may request for termination of the internet banking any time by given a written
notice of at least 15 days to DBBL. The termination shall take effect on the completion of
the fifteenth day.
BREACH OF TERMS AND CONDITIONS:
User must compensate for any loss that occurs as a result of his breaking any term of these
agreements.
PRECAUTIONARY NOTES
In order to prevent unauthorized transaction through internet banking service, users are
advised to strictly maintaining the following
1. The password should not be written any where.
2. User should make sure that no one is physically watching his passwords when he is
logging in.
3. It is important to remember to click log out after completing her internet banking
session.
4. User should not leave his PC unattended with the browser running and a valid user
name and password cached ad in such case anyone can gain access to the account.
4.1.4. SECURITY WITH INTERNET BANKING:
DBBL Data Center is equipped with worlds number one networking equipment from
CISCO, such as switch, router and PIX firewall. The internet user will only be able to access the

INTERNET BANKING

41

Internet Banking if he is allowed by two firewalls- such as Check Point Firewall and CISCO
Firewall. These firewalls will only allow the http and https traffic.
DBBLs Internet Banking web server is certified by 128 bit data encryption SSL (Secure
Socket Layer) server certificates issued by Verisign. Inc, USA. So when a customer hits our web
site, the web browser automatically checks that the certificate of the server and the public ID are
valid. Then his request will be executed with high level encryption.
Login ID of internet banking is mapped with the Customer ID, so there is no change to get
other account with his Login ID.
Transaction Limit has been set with each Login ID. So customer can do daily certain amount
of transaction which has been specified in the account product.
Customers Login ID of the Internet Banking and his password will be printed in security PIN
mailer and sent to the customer, so that he could only access his account with proper
authentication.

4.1.5. BANGLADESH BANK APPROVES INTERNET BANKING:

Bangladesh Bank
Head Office (Regulatory and Policy Department)
Po.Box.No-325

INTERNET BANKING

42

Dhaka
Source No-BPRPD (P) 760/29/2004-3510

Dated-05-09-2004

Managing Director
Dutch Bangla Bank Ltd
Head office
Dhaka
Request for No Objection Certificate for DBBLs Truly Online Banking with
Internet Banking Facility and ATM/POS Services.
Honorable Authority,
01. We would like to draw your attention in reference No DBBL/100/13/2004/585, regarding
your application for request for No Objection Certificate for DBBLs Truly Online Banking
with Internet Banking facility and ATM/POS Services
02. You have given permission to deliver internet banking services under the following terms and
conditions:
-You will not transfer any third party funds except utility bill payment
-You must sign a bond as early as possible and submit citing that you will abide by the guidance
notes on prevention of money laundering act.
-You are to taken proper initiatives so that account from nonconvertible taka can not transfer into
the account of convertible taka
-You must be careful so that internet banking functions do not deface the existing rules.
-You must make understand the customers regarding the risk associated with internet banking.
03. We have no claim to provide ATM/POS services.

INTERNET BANKING

43

4.1.6. INTERNET BANKING USER MANUAL:

DBBLs user manual is given in the following table

CONNEC
TING TO
INTERNE
T
BANKING

MY
ACCOUNTS

TRANSFER
FUNDS

BILL
PAYM
ENTS

STANDING
INSTRUCTI
ONS

TERM
DEPOSITS

CUSTOMER
SERVICES

-Logging

-Account

-Funds

-Pay

-Standing

-Open

-Cheque status

in

summary

transfer

bills

instruction

term

inquiry

-Logging

-Account

-Third party

initiate

deposits

-Stop Cheque

out

details

funds

-Modify

-Interest rate inquiry

-Account

transfer

term

-Foreign exchange

deposits

rate inquiry

activity
-Uncleared

-Payee maintenance

fund

-Change password
-Updating profile
-Refill prepaid card

4.2. CARD PRODUCTS AND CHARGES

The card products of DBBL are given in the table
CARD PRODUCTS
1

DBBL-NEXUS CLASSIC CARD (DEBIT)

DBBL-NEXUS MAESTRO CARD (DEBIT)

DBBL-NEXUS VISA ELECTRON CARD (DEBIT)

INTERNET BANKING

44

DBBL-NEXUS SILVER OD CARD (CREDIT)

DBBL-NEXUS GOLD OD CARD (CREDIT)

The charges of each card is represented in the following table

CHARGES & FEES FOR DEBIT CARD (TK)
TYPE OF
SERVICES

VISA

CLASSIC

SILVER

GOLD

MAESTRO

FREE

1000

1500

500

500

200

1000

2000

500

500

200

500

700

500

500

200

200

200

200

200

ELECTRON

ISSUANCE
FEE(1ST YEAR
ONLY)
ANNUAL
FEE(2ND YEAR
ONWARD)
REPLACEMENT
FEE
PIN CHANGE
FEE

In the following table I see that DBBL charges for card products are higher than TBL but
somewhat less than EBL

DBBL

ISSUANCE
FEE
REPLACEMENT
FEE
PIN CHANGE
FEE

EBL

TBL

CLASSIC

GOLD

VISA
ELECTRON

CLASSIC
(LOCAL)

CLASSIC
GOLD

DUAL
GOLD

CLASSIC

GOLD

VISA
ELEC
TRON

FREE

1500

500

1300

2500

2500

30

60

500

200

700

500

150

300

200

30

60

500

200

200

200

150

300

400

10

10

300

T-CHARGES OF VARIOUS BANKS PRODUCTS

4.3. DBBL's ATM SERVICE:

INTERNET BANKING

45

Dutch Bangla Bank is the first and only local bank in Bangladesh to have an automated banking
system. This automation took place in 2003 whereby services of the bank were available
uniformly though any branch, ATM and internet. Currently only foreign banks in Bangladesh
have this feature. Banking was a paper based operation until DBBL. With its wide local network,
delivered banking automation and modern banking services to the masses. This effectively
introduced the 'plastic money' concept into the Bangladeshi society.
The ATM count stood at 140 eclipsing other networks by a large margin. This rapid increase in
DBBL's ATM network has led the majority of other banks to sign sharing agreements instead of
pursuing their own ATM network.
In 2006, Dutch Bangla Bank ventured into the realm of personal credit by offering automatic
credit facilities to its Debit card (DBBL Nexus) holders. It also continued expanding its ATM
network with the intension of installing more than 400 machines.
In 2007 the bank entered a strategic alliance with Citibank NA, where both parties will provide
retail banking services of DBBL for its employees and owners of Citibank corporate customers
in Bangladesh. In the same year DBBL became the first bank in Bangladesh to offer SMS
Banking services.
DBBL maintained a proprietary policy on its ATM network until 2007. This was changed when
DBBL and Standard Chartered Bank (SCB) signed an agreement that will let SCB use DBBL's
ATM network. This sharing invitation was extended to all other banks shortly after.
4.3.1. ATM NETWORK/DBBL NEXUS PARTICIPATING BANKS:
DBBL has over 180 ATM's installed all over Bangladesh. Banks that have signed agreements to
use DBBL's ATM network (as of 24 September 2007):

Citibank (locally known as "Citibank NA")

Hong Kong Shanghai Banking Corporation (HSBC)
Standard Chartered Bank (SCB)
INTERNET BANKING

46

 Commercial Bank of Ceylon

Mutual Trust Bank
Bank Asia
National Credit and Commerce Bank Limited (NCCBL)
Prime Bank
United Commercial Bank Limited (UCBL)
Southeast Bank Limited (SEBL)
4.3.2. ATM LOCATIONS:
You can find DBBL ATMs beside your home, in your office premise, nearby market, kacha
bazar, university, college & school premises, Airport, Railway stations etc., throughout the
country. All the ATMs can accept DBBL-NEXUS ATM / POS card, DBBL-Maestro/Cirrus Debit
card and DBBL Credit card.
Using any of the DBBL ATM pools any where in the country, you can perform the following:

Account balance enquiry

Cash withdrawal 24 hours a day, 7 days a week, 365 days a year
Cash deposit to a certain number of ATMs any time
Mini statement printing
Statement request
PIN (Personal Identification Number) change
Request for Cheque Book
Fund transfer within your own accounts
Payment of mobile/T&T phone, Gas, Electricity, Water, Internet, Credit Card bills from your
savings/current account

Payment of School/College/University fees by debiting your savings/current account

Purchase of activation number for mobile/internet prepaid cards

INTERNET BANKING

47

DBBL ATM'S LOCATED AT

Dhaka

Chittagong

Rajshahi

Savar

Khulna

Comilla

Gazipur

Sylhet

Feni

Tangail

Moulvibazar

Cox's Bazar

Narayangonj

Bogra

Narsingdi

Barisal

4.3.3. HOW MUCH MONEY DBBL KEEPS IN ATM PER DAY

The total amount of money has to be kept in the ATMs daily can be calculated by the following
formula

A = (c X p X u X f X w)/ 7
Here, A = total amount of money to be kept in the ATMs per day
C = no of consumer of the bank
U = portion of online consumers who use ATM services
P = portion of consumers who use online services
F = average ATM usage per week
W = average withdrawal amount
FOR EXAMPLE:
Let a bank has consumer base of 300. the study reveals portion of consumers who use online
services is 84%.from this online users 97.6% consumers take ATMs service for an amount of
tk2000 on an average at 2 times per day.
SOLUTION:
A = (300X0.84X0.976X2X2000) / 7
= tk134000 (app)

INTERNET BANKING

48

Now the question arises, should the bank keep the same amount for each ATM. This can be
solved by the following formula
S=wXh
Here, h = number of hit received by a particular ATM on an average
w = average withdrawal amount
If a particular ATM received 20 hits in a day, then the bank has to keep
= 2000 X 20
= tk40000
4.4. DBBLS POS
4.4.1. DBBL'S POS SERVICES:
All the POS terminals can accept DBBL-NEXUS Debit card, DBBL-Maestro/Cirrus Debit
card and DBBL Credit card.
You can use DBBL-Maestro/Cirrus Debit card from any Maestro/Cirrus network worldwide.
This would open access to more than 300,000 Cirrus ATMs in around 100 countries. You can
make payments for purchases in more than 800,000 Maestro outlets (POS terminals) worldwide
Merchant, being customer of DBBL, will get his bills credited to his account automatically.
Submission of bill is not required.
You will enter into the era of Plastic money through DBBL card services. This will eliminate
the risk and hazard of carrying cash.
Low annual/replacement/renewal fee for DBBL cards.
Low commission for the merchant for all types of transactions by DBBL cards.
All the POS terminals and ATMs are controlled by the world famous, secured & robust
switching software IST/Switch of Oasis Technology Ltd., Canada.
4.4.2. LOCATION OF DBBLS POS
You can find DBBL POS terminals in almost all the district towns/cities, your nearby shops,
restaurants, hotels, schools, colleges, universities, bus terminals, railway stations, travel agencies,
etc., throughout the country.

INTERNET BANKING

49

GULSHAN

SHANTINAGAR/BAILY ROAD

BANANI

MOGHBAZAR/MOUCHAK/PALTON

UTTARA

MIRPUR/KAFRUL

DHANMONDI

BAITUL MUKUARAM

ELEPHANT ROAD

STADIUM MARKET/BIJOY NAGAR

HATIRPUL

CHITTAGONG

K.BAZAR

SYLHET

4.5. STEPS OF DBBL TO PROVIDE SECURITY OF THE CUSTOMERS

4.5.1. DIMENSION OF SECURITIES THAT CUSTOMERS DEMAND
Security is a vital issue for all financial institutions. Banks that provide
services to customer must ensure security so those customers are satisfied
about bank. In a sense, bank is a business organization so it is also their
responsibility to maintain everything securely. The following heads of the
security demanded by the customers:
AUTHENTICATION
Authentication is the process by which two parties involved in a dialogue are
given a guarantee that they are indeed interacting with whom they think
they are interacting. Authentication might be from both sides- server
authentication and client authentication.
.
CONFIDENTIALITY
Confidentiality deals with protecting the contents of message or data
transmitted over the internet from unauthorized people. For example, one
wants to protect his/her credit card information when he/she purchases over
the Internet.
INTEGRITY
Data integrity is related to preventing data from being modified by an
attacker. For instance, only the credit card number is protected while the

INTERNET BANKING

50

contents of the order (online) are not. Then, the attacker could potentially
modify your order while it is being transmitted over the network by adding or
deleting contents from the order or even changing the delivery address.
AVAILABILITY
It is also important to guarantee that authentic users of an e-banking site
expect to get his service when he needs it. Sometimes an attacker might set
up a program that continuously attempts to be authenticated by the bank.
But the authentication will repeatedly fail. However, attacker would occupy
precious resources of the site. These resources become unavailable to the
legitimate customers of the bank.
NON-REPUDIATION
Non-repudiation is an attribute of secure systems that prevents the sender of
a message from denying having sent it. This might very costly for ebusinesses such as online trading which want to ensure that a customer will
not be able to deny having requested to buy or sell securities.
4.5.2. SECURITY THREATS
Security threats can be divided into two types1) IT related threats
2) Non-IT related threats
4.5.2.1. IT RELATED THREATS
IT related threats are those involving software, hardware, data and network
4.5.2.2. NON-IT RELATED THREATS
Non-IT related threats are those related to personnel, administration and
physical/environmental facilities
4.5.3. SECURITY COUNTERMEASURE

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51

A security countermeasure is a risk mitigating measure that detects,

prevents or minimizes loss from a specific information system (IS) threats or
category threats. The measurement can be two types which are

1. PREVENTIVE MEASUREMENT
Preventive measurement includes deploying advanced security
software or control, such as advanced access control, intrusion
detection, firewall, and surveillance mechanisms, to protect IS
assets.

2. Deterrent Measurement:
Deterrent

Measurement

includes

developing

security

policy

statements and guidelines; educating users about what constitutes

legitimate use of IS assets and the consequences of illegitimate use
of IS assets and training experienced auditors to audit IS assets
usage.
4.5.4. DBBLS SECURITY COUNTERMEASUREMENT
4.5.4.1. PREVENTIVE MEASUREMENTS

DBBL Data Center is equipped with worlds number one networking equipment from
CISCO, such as switch, router and PIX firewall. The internet user will only be able to
access the Internet Banking if he is allowed by two firewalls- such as Check Point
Firewall and CISCO Firewall. These firewalls will only allow the http and https traffic.

DBBLs Internet Banking web server is certified by 128 bit data encryption SSL (Secure
Socket Layer) server certificates issued by Verisign. Inc, USA. So when a customer hits
our web site, the web browser automatically checks that the certificate of the server and
the public ID are valid. Then his request will be executed with high level encryption.

INTERNET BANKING

52

 Login ID of internet banking is mapped with the Customer ID, so there is no change to
get other account with his Login ID.

Transaction Limit has been set with each Login ID. So customer can do daily certain
amount of transaction which has been specified in the account product.

Customers Login ID of the Internet Banking and his password will be printed in security
PIN mailer and sent to the customer, so that he could only access his account with proper
authentication

Digital signature can be used to support authenticity, unforgeable, integrity, not

reusable t except confidentiality. It is a protocol that has same affect as real signature
and maintains the properties mentioned above and it uses the public key
cryptography. In this process, signer signs the message and sign can
be verified by anyone that it really comes from signer, so signer can
not forge later and nobody can modify the message while in transit. To
ensure authenticity, receiver can verify the signature and understand
that the message really comes from sender. Hash algorithm and
asymmetric encryption is used to perform this operation.
4.5.4.2. DETERRENT MEASUREMENTS
DEVELOPED POLICY
The authority has developed their security policy to safe the customers
interest.
TRAINING THE EMPLOYEES
The employees of DBBL have been trained in light of the ICT perspective.
APPOINTED EXPERIENCED AUDITOR

INTERNET BANKING

53

Experienced auditors are appointed as an internal auditor to discern the

mistakes done by the employees.

4.6. CONSEQUENCE OF DBBL INTENET BANKING

DBBL published their management review, 2004. Report showed the
immense improvement of every sector of bank. Of course many factors are
involved

with

such

improvement.

One

of

the

factors

is

must

IT

implementation. The improvements are as shown bellow:

The banks net interest income in 2004 increased by 32 percent over 2003.
Investment income increased by 30.88 percent over 2003.
Salary and allowances to employees increased by 21.17 percent over 2004.
As the business side is expanding like IT exploration, so lot of employees are
needed to serve that purposes.
PARTICULARS
NET INTEREST INCOME
INVESTMENT INCOME
SALARY AND ALLOWANCES
GENERAL AND ADMINISTRATIVE EXPENSE
LOANS AND ADVANCES
EXPORT AND IMPORT BUSINESS

2004
37%
33.88%
17.17%
25.41%
30.65%
25.37%

T- VARIOUS SECTORS IMPROVEMENT AFTER IMPLEMENTING IB

General and administrative expenses increased by 20.41 percent. Payment
of insurance premium on deposit was mainly responsible for this.
Loans and advances increased by 16.65 percent to taka 9282.20 million
compared to taka 7957.04 million in 2003.
DBBL bank also provides micro credit for the poor people of Bangladesh for
the awareness of Information technology. At the end of 2003, the total

INTERNET BANKING

54

outstanding amount was taka 181.00 million while the corresponding fig was
186.20 million in 2004.
The bank handled total export business of taka 6523.00 million and import
business of taka 8930.50 million in 2004. The export and import business
grew by 17.37 percent 3.03 percent respectively.

4.7. DEMOGRAPHIC FEATURES OF DBBL INTERNET

BANKING
I have considered the following variables to analyze the demographic
features of DBBL
1. Gender

Male
Female
2. Profession

Business
Service
Student
House wife
3. Education

HSC
Graduate
Post Graduate.
VARIABLES

CATEGORYS

PERCENTAGE

GENDER

MALE

90%

FEMALE

10%

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55

PROFESSION

EDUCATION

BUSINESS

38%

SERVICE

52%

STUDENT

5%

HOUSE WIFE

3%

HSC

2%

GRADUATION

3%

POST-GRADUATION

95%

T-DEMOGRAPHY OF DBBL IB

F-DEMOGRAPHY OF DBBL IB
PROFESSIO
N

GENDER

D EM O G R A P H Y
O F D B B L IB

EDUCATION

4.7.1. GENDER

INTERNET BANKING

56

From the gender perspective, 90% of the total users are male and the rest of
10% are female. So the participation of female users is out of the place in the
age of information.
4.7.2. PROFESSION:
Service holders and business men are the imperial position in the profession.
Service holders occupy 52% and business men take 38% of the total users.
Student and house wife hold 5% and 3% of the total users. So it is clear that
DBBLs strategy is to catch up the attention of business and service holder.
4.7.3. EDUCATION:
95% of the total users are post graduate holder, 2% HSC pass and 3% are
graduate holder. So it is distinct that DBBL looks the educated customers as
educated customers are very much optimistic about the innovative and well
know to IT knowledge.

4.8. SWOT ANALYSIS of DBBL IB

SWOT analysis is one of the most acceptable yardsticks to measure the
gigantic performance of the management and provides notion about the
opportunity and threat of the company or companys project. SWOT analysis
of DBBLs IB is

INTERNET BANKING

57

S TR EN G
TH

F- SWOT OF DBBL
TH R EAT
S

SWOT OF
DBBL IB

W EA K N E
SS

O PPO RT
U N ITIES

STRENGTH

Strong security counters measurement to provide 99.99% security about customers

privacy. DBBL Data Center is equipped with worlds number one networking
equipment from CISCO, such as switch, router and PIX firewall.

Well trained employees

It has already covered about to all corners of the country.
Large number of ATM booth and POS centers and situated near the customers hand.
DBBLs Internet Banking web server is certified by 128 bit data encryption SSL (Secure
Socket Layer) server certificates issued by Verisign.

Educated customers whose have positive notion about the changing technology.
WEAKNESS:

INTERNET BANKING

58

DBBLs focus more now increasing the number of customers. But the authority has no

headache to increase the capacity of the server. So their system may collapse due to overload
any time.

Due to large number of customers they may face security problem

There is no ATM booth in the University campus as NBL has. But student may be

profitable customers in near future.

OPPORTUNITIES:

Customers psychological impression to use debit and credit card will be positive
aspects of exploring internet banking.

Of late expansion of fiber optic cable in Chittagong intensifies this opportunity

much more.

Tejari, a Dubai based online marketplace, is to open offices in Bangladesh to offer

e-commerce services to exporters and so banking application will be aloofted.

Expansion of mobile network over the country creates scope for online business
applications. Some companies already provided mobile internet services in the
country.

The number of ISPS (Internet Service Protocol System) has grown to 195 with
individual band with ranging from 34 KBPS to 2 MBPS, offering broad band internet
services through DSL/HDSL.

All 64 districts and 35% Thanas in Bangladesh have been brought under internet
coverage by BTTB through dial up connections.

The number of computers in the country is about 0.5 million with about 0.1 million
internet users that is increasing at an increasing rate.

Shopping malls and air lines are transformed into digital one.

THREATS

Now NCBs as well as PCBs are going to provide internet banking services. So
this is the main threat for DBBL internet banking.

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59

As internet banking is wholly IT based, software as well as server capacity has

been updated over the period. The installation cost is also high. So its a technological
threat for DBBL internet banking system because the end users take the updated
technological advantage.

4.9. ADOPTION THEORY AND DBBL INTERNET BANKING

ADOPTION THEORY
Davis (1989) used the Theory of Reasoned Action (TRA) and developed the
Technology Acceptance Model (TAM) and TAM based studies posit that two
sets of beliefs
-Perceived Ease of Use (PEOU): PEOU refers to the degree to which an
individual beliefs that using a particular system would be free of physical and
mental effort
- Perceived Usefulness (PU): PU determines individuals acceptance of a
technology. PU is related to users perception of the degree to which using a
system will be beneficial.
Another related work, AZIN (1985) developed the Theory of Planned
Behavior (TPB) which was later decomposed by Taylor and TODD (1995) and
posits that intention to adopt and use a technology is affected by attitude,
subjective norms and perceived behavioral control.
So from the above discussion, it is clear that the adoption process depends
not only on some mental factor i.e. ease of use; perceived usefulness; but
also on some behavioral factors i.e. attitude, subjective norms and perceived
behavioral control.
PEOU AND DBBL IB
DBBLs IB followed the PEOU Theory as all functions are done with out human
interaction of the bank end.

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60

PU AND DBBL IB
DBBLs IB has already been accepted by the customers that the system is
beneficial. So it could able to throw the notion of the PU theory to the
customers.

PU

F-ADOPTION THEORY

ADOPTON THEORY

PEO
U

TAB

TPB AND DBBL IB

Customers show their positive attitudes towards this innovative product. As
most of the customers are higher educate there are very much sanguine
about the changing techno logy.

4.10. PORTERS FIVE FACTORS MODEL AND DBBL IB

RIVALRY IN THE INDUSTRY
The mountainous competition exists among the rival in this industry. So it is
very tough to loot the profit.
THREAT OF NEW ENTRY:

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61

Threats new entry is also high as banking business more profitable and the
industry is now in the growing industry.
BURGAINING POWER OF CUSTOMERS:
Bargaining power of customers is also intense as most of the bank has
already been introduced internet banking.
BURGAINING POWER OF SUPPLIERS:
Bargaining power of suppliers is low in the industry. Because many suppliers
prevail in the market to provide the service.

TREATS
OF NEW
ENTRY

BARGAINING
POWER OF
BUYYERS

TREATS
OF
SUPPLIER
S

P O R TER
S
M O D EL

RIVALRY
IN THE
INDUSTRY

TREATS
OF
ALTERNATI
VE

F-PORTERS FIVE FACTORS MODEL

VARIABLES

STATUS

INTERNET BANKING

COMMENT

62

RIVALRY IN THE INDUSTRY

BURGAINING
POWER
OF
CUSTOMERS
BURGAINING
POWER
OF
SUPPLIERS
THREAT OF NEW ENTRY
THREAT OF ALTERNATIVE
SYSTEM

HIGH
HIGH
LOW

TOUGH TO MAKE A
PROFIT

HIGH
HIGH

THREAT OF ALTERNATIVE SYSTEM:

Threat of alternative system is also high. Because NCBs and some PCBs have
not yet started such system.
CONCLUDING REMARK:
Introducing internet banking services by DBBL is not the profit raising
strategy. It is now the demand of the twenty first century to cope with the
changing technology keeping in mind to throw the immense taste of
innovative products of IT to the customers. Simultaneously to secure the
position in the competitive domestic and global market as well as thrust the
bottom line of the income statement insinuately.

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63

5.COST BENEFIT ANALYSIS OF IB

6. PROSPECTS OF IB IN BANGLADESH
7.GOVERNMENT POLICY FOR IB

INTERNET BANKING

64

5. SOCIAL COST-BENEFIT ANALYSIS OF INTERNET BANKING

Cost-benefit analysis is mainly, but not exclusively, used to assess the value for money of very
large private and public sector projects. This is because such projects tend to include costs and
benefits that are less amenable to being expressed in financial or monetary terms (e.g.
environmental damage), as well as those that can be expressed in monetary terms.
5.1. DEFINITION OF CBA
Cost-Benefit Analysis (CBA) estimates and totals up the equivalent money value of the benefits
and costs to the community of projects to establish whether they are worthwhile.
5.2. PRINCIPLES OF COST BENEFIT ANALYSIS
One of the problems of CBA is that the computation of many components of benefits and costs is
intuitively obvious but that there are others for which intuition fails to suggest methods of
measurement. Therefore some basic principles are needed as a guide.

INTERNET BANKING

65

1. There Must Be a Common Unit of Measurement

2. CBA Valuations Should Represent Consumers or Producers Valuations As Revealed by
Their Actual Behavior
3. Benefits Are Usually Measured by Market Choices
4. Some Measurements of Benefits Require the Valuation of Human Life
5. The Analysis of a Project Should Involve a With Versus Without Comparison
6. The Analysis of a Project Should Involve a With Versus Without Comparison
7. Double Counting of Benefits or Costs Must be avoided
8. Decision Criteria for Projects

5.3. EXAMPLES
For SCBA I consider the following variables

Transferring fund from remote area

Letter of credit(LC)
Reduce Charge
CIB report generation
Connectivity with the port authority
Assuring exchange rate
5.3.1. ACCESSING OR TRANSFERRING FUND FROM REMOTE AREA
These are one of the most vital activities of bank. It is particularly very
important for businessmen.
For example, a person having an account in branch X at capital city (C) wants
to draw cash from branch Y located at some remote area (R).In the case of
existing system followings are steps followed for the above service.
-Branch Y receives application from customer and prepares required papers.

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66

-Then branch Y sends those papers to branch X (at C) usually by courier

service.
-Branch X then receives papers, checks them and finds correct.
-Branch X finally sends OK report (by courier service) favoring the person.
-Branch Y then transfer cash to the customer.
In case of transferring fund from a bank to another bank requires some sort
of steps plus the overhead of clearing house, which is governed by
Bangladesh Bank. Using the above steps roughly estimated time for inter
branch/bank fund transfer ranges from 3 days to 20 days depending upon
the efficiency of the bank and distance between two banks. To make the
calculation simple, we consider that each such transaction on an average
takes a period of 7 days.
It is to note that during this transferring period the fund is not being utilized
by any of the banks.
Now we consider the following real example to find out the benefit of the
proposed system. We consider that the above process comes under the
proposed e-banking infrastructure. So it performs all remittance functions in
real time. The long delay of 7 days is absorbed to nil. Assuming yearly
interest rate as 13% we can find out the net profit calculated over this delay
of 7 days.
Net profit = (7x13x25480) / (365x100)
= 63.52 (amount in lac TK.)
CONCLUDING REMARKS:

If the above function is done with the traditional banking system society will
incur a loss amount to tk 63.52 (lac).But under the internet banking system
society will gain by expediting the transaction. So from the social perspective
the internet banking project is acceptable.

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67

5.3.2. LETTER OF CREDIT (L/C)

In general an L/C operation consists of two parts. They are dealing with the
payments and other one is shipment of goods. The total process typically
takes 25 days (it is subject to change due to many factors) in the following
way (shown in figure 6.1)
(A) 6 days (pre-shipment)
(B) 4 days (goods delivery from ports)
15 days (goods shipment process)
Through internet banking delay due to pre-shipment and post-shipment process is fully
eliminated. That means only15 days requires to entire process. On an average, online L/C
processing reduces the total time period by 60%. Consequently, it increases the number of L/C
by the same ratio.
REDUCED CHARGE
Followings are the charges for L/C operation by the bank using traditional system: (amount in
TK)
1. Commission .5%
2. VAT 15% on commission
3. SWIFT charge 3500/=
4. Foreign Courier Charge 1000/=
5. Stamp 150/=
6. Securities & others 200/=
1 USD=taka 69(approx.)
Through the Internet, it can now send or receive any information in a secured way within a
fraction of seconds .As now the total process comes under electronic transfer there is almost no
need to prepare and scrutinize papers manually. So it becomes easier and convenient to process
an L/C operation. Therefore, bank now can lower its commission at least at .25% instead of .5%.
Foreign Courier Charge will be sharply reduced to TK.100/= (including some electronic message
transfer charge. Suppose other charges remain same.

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68

UNDER IB SYSTEM

TRADITIONAL BANKING
SYSTEM

Commission

.25%

.5%

VAT on commission

15%

15%

SWIFT charge

3500

3500

Foreign Courier Charge

100

1000

Stamp

150

150

Securities & others

200

200

T- CHARGES FOR LC UNDER THE BOTH SYSTEM

Let a business man needs LC to import rice amount to tk 7500000.The cost of the businessman
under the both system will be:
UNDER IB SYSTEM

TRADITIONAL BANKING SYSTEM

=(7500000X.25%)+(18750X15%)

(7500000X.5%)+(37500X15%)

+3500+100+150+200)

+3500+1000+150+200

=18750+2812.5+4850

=37500+5625+4850

=25512.5

=479750

CONCLUDING REMARKS:

I may conclude that internet banking could able to provide optimum benefit to the members of
the society. As a whole society is benefited insinuately and the extra amount that was charged
under traditional banking system can be invested to the productive sectors and benefits derive
from that project to the society.
So, internet banking project is viable for the society.
5.3.3. CIB REPORT GENERATION
Bangladesh Bank has the access to all other banks so it is very easy task to maintain an
integrated database of all customers specifying their credit and debit information with each bank.
At present one wishing to go for any project first seeks bank for loan. The bank then first verifies
the viability of the project from different points of view. Then the bank contacts Credit
Information Bureau (CIB) at central bank .CIB checks all related papers and other documents

INTERNET BANKING

69

regarding the person and finally send a reply stating the summery of his past transactions.
Depending upon the report sent from CIB the bank either accepts or rejects to sanction loan for
the person/persons. Above process of generating CIB report requires on an average of 20 days.
This delay is due to the manual procedure of verification. By contrast the proposed electronic
banking system is capable to do same job in an efficient way. The Central Bank can generate the
CIB report within seconds using its integrated database for the customers.
Mr X wants to take a car loan from DBBL in Barisal branch. The car will move in Amtali to
Kukua in where rickshaw is the only and main means of communication. After completing the
application form, DBBL will send it to the CIB to discern the application that will take one
month due to the manual procedure of verification. The social cost of that community will be like
this:
Assumptions
-The people have to expend an hour and to pay tk25.
-If car moves the cost would be tk5 per person and take 15 minutes.
-Every day 100 people travel from Kukua to Amtali
So the amount paid by 100 people is = (25 X 100X30) = tk75000
Time required = (100X1X30) = 300 hours
But the Central Bank can generate the CIB report within seconds using its integrated database for
the customers. If all things are positive it will take two days to provide the loan by the DBBL.
So the amount paid by 100 people is = 5 X 100X30 = 15000
Time required = 100X15X30 = 4500/60=75 hours
Social cost = (75000 15000) = tk50000
Time lost = (100-75) = 25 hours
CONCLUDING REMARKS:

If internet banking services are available the social benefit would be tk50000 and time saved 25
hours. No doubt about the social benefit of the internet banking.
5.3.4. CONNECTIVITY WITH THE PORT AUTHORITY
Under the proposed configuration every bank is directly connected with the ports authority ( sea
and air). Currently, disbursement of goods from ports requires much time due to

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processing and clearing of required papers. The trader now sometimes gets
the papers from his bank and deposits them to the port authority. The
unexpected delay will be removed using a direct communication channel
with the port authority.
Suppose, Lack of proper documents the fossil fuel has not been released by
the ports authority of Chittagong. And it will take 7 days to submit the
necessary documents as no internet banking services are present in the
country. Result is that the price of fossil fuel will rise from tk48 to tk 55 due
to more demand over supply. So society suffers tk 7 more in per litter.
CONCLUDING REMARKS:

If internet banking facility prevails in the country, the importer could submit
their documents properly and society could enjoy the fruits. So there is no
debate regarding internet banking from the societys view point.
5.3.5.ASSURING FLOATING EXCHANGE RATE
This is one of the important role that the proposed system will play currently
the Central Bank, the beginning of the day, declares major exchange rate.
Each Head Office (HO) collects that information from the Central Bank
usually over the telephone. After some interval the rate might change but
due to the lack of online connectivity with the Central Bank each HO gets the
changed exchange rate information with some significant delay. This delay
might cause heavy loss for the bank or for the customer. Here lies the
necessity of assuring floating point exchange rate. The proposed system can
very well establish the requirement of the floating exchange rate using
online message broadcast from the central bank.
Let an example, X, an importer of Barisal, has made a contract to Y an
exporter of India, to purchase 1000 metric ton rice at the current exchange
rate. When X is going to make payment, he knows the exchange rate is $1=

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tk 68 from the bank by which he will make his transaction. Under this state
the scenario will be
Total rice = 1000X1000 = 1000000 KG
Total Price = 1000000 X 32 = tk 32000000
Importer pays to exporter = 32000000/68
=$470588
Now assume that the importer will charge per kg at tk 36 after considering
all costs.
But within mean time the exchange rate has been changed from tk 68 to tk
69.5 that was not available to the office of Barisal due to lack of information
system. Under the new exchange rate importer will pay to exporter =
32000000 / 69.5 = $460432 and the rice per kg would be priced to tk 40 by
the importer adding all costs. So the common people would have to pay
more tk 4 (40-36) per kg now.
CONCLUDING REMARKS:

If internet banking services are available in Barisal, the fluctuating exchange

rate will reach in time. And the society is benefited by paying tk 4 less per
kg.
So internet banking again proves itself healthful to the society.

6. PROSPECTS OF THE INTERNET BANKING IN BANGLADESH

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A magnificent prospect of dispelling the internet banking in Bangladesh prevails due to the
following foreheads:
EXPANSION OF MOBILE NETWORK
Expansion of mobile network over the country creates scope for online business applications.
Some companies already provided mobile internet services in the country.
EXPANSION OF ISPS
The number of ISPS has grown to 195 with individual band with ranging from 34 KBPS to 2
MBPS, offering broad band internet services through DSL/HDSL.
INTERNET COVERAGE BY BTTB THROUGH DIAL UP CONNECTIONS
All 64 districts and 35% Thanas in Bangladesh have been brought under internet coverage by
BTTB through dial up connections.
No OF IT EDUCATED PEOPLE INCREASED
The number of computers in the country is about 0.5 million with about 0.1 million internet
users that is increasing at an increasing rate.
EXPANDING BANKING BUSINESS
As no of private as well as foreign banks are increasing continuously, NCBs are compelled to
introduce online banking to sustain in the market.
DIGITIZED SHOPPING MALL AND AIR LINES
Shopping malls and air lines are transformed into digital one.
REGULATORY SUPPORT
Certain regulations such as IPR bill, the evidence act have the capability of facilitating the
scope of internet banking in Bangladesh.
EXPANSION ICT
A considerable number of manpowers are available who have a potent ICT knowledge.

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Some others clues are:

o Customers psychological impression to use debit and credit card will be positive aspects
of exploring internet banking.
o Of late expansion of fiber optic cable in Chittagong intensifies this opportunity much
more.
o Tejari, a Dubai based online marketplace, is to open offices in Bangladesh to offer ecommerce services to exporters and so banking application will be lofted.
o Citis global transaction services business announced a set of cross border remittance
services for the corporate and banking markets.

7. GOVERNMENT POLICY
In order to expansion of internet banking, in august 2001, center for policy dialogue (CPD)
articulated several principles that could be the foundation for government policy in Bangladesh,
includes:

* Promoting and preserving competition by introducing competition to monopoly phone

markets, and ensuring interconnection at fair prices.

* Guaranteeing open access to networks on a discriminatory basis, so that users have access to
the broadest range of information and services.

* The automation of Bangladesh and other financial institutions should be based on

comprehensive strategic plan.

* Central bank should provide some market incentive for the banks to implement ICT in the
financial sector. Bangladesh bank may set a time line for brining the Upazilla level branches of
the banks under network within year 2006. For this achievement Bangladesh bank can reward
the banks with appropriate market incentives.

* Bangladesh bank can set up mandate for the banks to recruit new entrants with compulsory
ICT education.

* The pay structure for NCBs should be separate to attract competent ICT specialists in banks
under contractual agreements.

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* There should be a comprehensive plan to modernize the operation of the central bank to
support automated clearing service and update supervisory and regulatory rules for absorbing
ICT-based banking.

* An awareness campaign should be organized through workshop and seminar on the importance
and business value of ICT in financial institutions for creating awareness among the top
management.

* Bangladesh bank should work out an efficient information infrastructure for banks using
different technology to ensure network connectivity among the commercial banks and financial
institutions in Bangladesh.

* A pilot project should be undertaken immediately to set up a payment server within country for
receiving payment for e-commerce.

* For attracting foreign currency through e-commerce and internet banking Bangladesh bank
should undertake a pilot project to experiment the crosscutting issues.

* Permit low limit international credit card (ICC) for individuals against passport. Educational
institutions will be facilitated to procure books and other educational materials using ICT.

* Legal infrastructure is a must for implementing ICT-based banking services. Bangladesh bank
along with the concerned agencies should work out a plan to develop and enact the following
regulatory documents: e-banking regulation, digital signature law, dispute settlement law,
amendment in evidence act, etc.

* Central bank may form a "center for internet banking technology and management" to support
the banks with latest technological development in the banking world and provide expert support
for ICT implementation.

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FINDINGS:
The findings of my study are
In the context of Bangladesh, both educated and uneducated people are very much
unaware about the IT .this unconsciousness creates the other hindrances like techno
phobia, lack of security and privacy.
Most of the people of our country are reluctant to change the traditional personalized
procedures.
Sometimes people are aware and interested enough to replace the traditional method with
the IT, but do not have enough money and infrastructure support.
Internet network is not available over the whole country.
Though the internet banking in Bangladesh is infancy stage, it is expanding rapidly.
In DBBL, there is no ATM booth in the University campus as 3% of the total users are
student.
If we observe the consumer behavior of online banking either Bangladesh perspective or
DBBL perspective, we see that female participants are very poor and needless to say of
rural and most of the urban housewives.
No initiatives has been taken to attract the female users
DBBL has provided internet banking services only the divisions, major city corporations
and port area.
DBBL internet banking charges are higher compare to Trust Bank Ltd, NBL, and SJIBL.
It is clear that there is no room for the lower income people.
Conspicuous aspects of DBBL internet banking consumers are highly educated who are
very much optimistic about change.
The server capacity is not the latest version.

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RECOMMENDATIONS
Creating awareness among the NCBs and local PCBs management regarding
internet banking is essential. Bangladesh bank can play a major role at this
juncture by highlighting the benefits of internet banking to the schedule banks and
encourage them to use customized software for their day to day operations
Technological and infrastructural barriers can be overcome if existing laws and
regulations are implemented.
Barrier of cost can be resolved through lessening the dependency on imported
technology from foreign countries.
Both NCBs and PCBs should extend their internet banking services.
Government policy should be favorable for the internet banking expansion.
CONCLUSION
Online banking means today, web based banking. Today banks are embracing web technology to
offer more services at a cost effective rate. Although in late Bangladeshi commercial banks put
forward themselves to gain that competitive advantage. If these recommendations are followed
perfectly by the concerned, it is not so far that Bangladesh will embrace the benefits of IT in the
full extent and get one of highest rates in the adoption of IT as well as IB through out the world.

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