Financial Management

Assignment
On

“Internet Banking in Bangladesh”- Study on a specific Bank

Assignment
On

“Impact of Internet Banking in Bangladesh”, with the discussion of a Commercial Bank

Financial Management

Prepared for

Zahir Raihan

Assistant Professor

Finacial Management

MBA

International Islamic University Chittagong

Prepared by

Group: C

Tahsin Akter Bipasha, M111902 (Group Leader)

Sharmin Jahan, M112910

Alhamra Yasmin, M112902
Rina Akter, M112908

Date: 20 April, 2012

Letter of Transmittal

20 April, 2012

To,

Zahir Raihan

Assistant Professor, Financial Management

MBA

International Islamic University Chittagong

Subject: “Impact of Internet Banking in Bangladesh”, with the discussion of a Commercial Bank

Dear Sir,
With immune pleasure, we present herewith the assignment on “Impact of Internet Banking in Bangladesh”, with the discussion of a Commercial Bank gives us opportunity to learn about Internet Banking. We hope that you will appreciate our endeavor & will find the assignment useful. We shall be glad to clarify any point mentioned in this assignment.

Thanks & regards.
Sincerely yours

Group: C
Course: Financial Management
Program: MBA
International Islamic University Chittagong
Dhaka Campus

Acknowledgement

Assalamualaikum
First we thanks to Almighty Allah for giving us the scope and capacity of presenting and completing the assigning task within the given time.

We also thankful to our honorable faculty Zahir Raihan

Assistant Professor, Finacial Management, MBA Program, International Islamic University Chittagong, Dhaka Campus for his faithfulness and enthusiastic attentiveness in our course.

Group: C
Course: Finacial Management
Program: MBA
International Islamic University Chittagong
Dhaka Campus

Background of the Assignment

The definition of e-banking varies amongst researches Hasan et al. 2719 partially because electronic banking refers to several types of services through which bank customers can request information and carry out most retail banking services via computer, television or mobile phone (Daniel, 1999; Mols, 1998; Sathye, 1999). Burr (1996) describes that it as an electronic connection between bank and customer in order to prepare, manage and control financial transactions.

E-banking is form of banking, where funds are transferred through an exchange of electronic signals between financial institutions, rather than the exchange of cash, checks, or other negotiable instruments. The ownership of funds and transfers of funds between financial institutions are recorded on computer systems connected by telephone lines. Customer’s identification is by access code, such as a password or Personal Identification Number (PIN), instead of a signature on a check or other physical document. E-banking involves individual and corporate clients, and includes bank transfers, payments and settlements, documentary collections and credits, corporate and household lending, card business and some others (UNCTAD, 2002). Banking has never been more important to our society than it is today. The advance of communication and computer technology and the availability of the Internet have made it possible that one can do most banking transactions from a remote location even without stepping into a physical financial structure - that is, the emerging of e-banking (Bruene, 2002). The way Bill Gates (2008) announced, “Banking is essential, banks are not”. This quotation means that the traditional bank branch is going to vanish in order to be surrogated by electronic banking, which continues to attract new users. The banking industry believes that by adopting new technology, the banks will be able to improve customer service level and tie their customers closer to the bank.

Larger banks that maintain expensive branch networks tend to have the greatest incentive to adopt E-banking services. In comparison, smaller banks have higher start up costs and tend to have a high initial technological cost in developing e-banking services. Many banks quickly realized that there are a momentous number of customers like to do banking electronically. The application of E-banking has been proven as an effective way to reduce the costs of operation for the financial institutions. For instance, E-banking services will allow banks to reduce expenditures on physical structures. It is believed that the E-banking will help banks to cut costs, increase revenue, and become more convenient for customers (Halperin, 2001). Another important benefit from E-banking is a more effective information collection and management. A combination of a low percentage of customers using e-banking services on a consistent basis and a relatively low start-up cost in developing e-banking services in the banking industry will make the impact of e-banking (positive or negative) quite limited on financial institutions.

Finally, the development of e-banking service has encouraged the adoption of a decentralized approach to give banks more needed flexibility to distribute Internet access to a much larger number of employees and potential customers.

Methodology And Limitation

Methodology

The study in descriptive in nature. Data used in this study are collected from the secondary sources. Primary data are also collected through personal interview method conducting the persons who are supposed to have knowledge about the problem. Secondary data were derived from various sources including the annual reports of Citigroup, Citigroup website, the Financial Statement of Citibank N.A. Bangladesh etc. for the comparison of the products, website of different Banks offering Internet Banking and some bankers working on those particular banks were consulted. For some specific information, officials of Bangladesh Computer Council and Bangladesh Institute of Bank Management provide necessary inputs.

Limitation

Bangladesh is lacking behind to use internet banking in banking transaction-comparing most of the SAARC Countries. So collecting data is very much difficult in Bangladesh where banks are still thinking EPC operation is a competitive advantage in banking business. Banks are not interested to disclose their business secret. In addition to this, journals, periodicals and published data are not available on this issue.

Table of Content

|Topics |Page No. | |Objective of the Report |08 | |Abstract |08 | |Introduction |09 | |Growing E-bank |10 | |E-banking products and services |10 | |Online Banking vs. Traditional Banking |11 | |The Risks & Advantages of Online Banking |12 | |Reasons to Use Online Banking |13 | | | | |Limitations to Online Banking |14 | | | | |Intern...

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