1.1 Introduction :
Global banking scenario has been changed; Cheques are now passing away and e-banking are widely welcomed as well as the statutory reforms has also been implemented in this regard for check and balance in this regard. E-Banking redeemed us a new metamorphose banking system and the advent of such banking propelling the status of business in a wide range. Globalization creates an environment where Bangladesh’s banks are to stay within the competition, they will have to move forward and that’s why e-banking system adapted by most of the banks. According to oxford dictionary, e-banking a method of banking in which the customer conducts transactions electronically via the Internet. Today e-banking play a key role in the national economy. ATMs, telephone banking, PC banking to internet banking are rapidly being introduced in Bangladeshi’s bank and that why without the authorization of Bangladesh. Bank no bank can remove any business document or record from their network. E-banking reduces costs and improving competitiveness by developing alternative distribution channels. It also increased the ability to enlarge their accessible customer stand. The widespread factors related with e-banking are simplicity of use, transaction security, expediency and speed. Presently, five basic services provided by online banking system worldwide. Users can view their account balance and transactions history, funds transfer between accounts, pay bills, request credit card advance and order cheques. Stock market transactions, submission of standardized accounting payment files for bank transfer are also provided by some banks.
1.2 Origin of the Report:
Dissertation is the partial fulfillment of BBA program, which is done after successful completion of the credit hours that are offered by the institute. This Dissertation report is the outcome of the Dissertation program that was designed for the students of BBA program. In consultation with both the organizational and academic supervisor this topic of “Electronics Banking of Dutch Bangla Bank Limited” was Selected and finally assigned by my academic supervisor Ahamed Karim, Department of Management Studies, Dhaka College.
1.3 Background of the study:
Banking sector is a very curtail part of a country. It plays a very much important role in the economy and always tries to make a sign on the economy. This institution is responsible for the financial stability of a country. Due to globalization of the market, all the industries have to face the competition. The foreign banks come in to the local market and the local banks have to fight most to gain the market share. And the present developing economy of Bangladesh demands immediate development of financial institutions which can make a good step to build up a strong economic infrastructure. In this view the banks have to drive their operation in such way which can make a contribution on the economy. And make a contribution into the economy; banks need efficient personnel with modern banking knowledge. This report has been prepared in the light of this view to gather practical knowledge and prepared under the guidance and supervision of the core teacher.
1.4 Objectives of the study:
The main objective of this report is to have an assessment about the “Electronics Banking of Dutch Bangla Bank Limited” How the Bank is providing facilities to its client and to suggest remedial measures for the development in future. The special objectives of the study are given bellow:
To gather comprehensive knowledge on Electronics Banking of Commercial Bank. Define electronic banking.
Describe several electronic fund transfer services.
Compare several types of electronic currency.
List consumer protections under the Electronic Funds Transfer Act. To explain the meaning and concept of Electronics Banking Management. 1.5 Scope of the Study:
In twenty-first century’s world without banking, any organization can’t run in any moments. Basically my topic is “Electronics Banking of Dutch Bangla Bank Limited” Here knowing scope is available but time is very short. There are many things, which are not invented yet. So there are many scopes for
further Thesis Paper.
1.6 Methodology of the study:
Methodology of the study is an essential part of the study. It is designed in a way so that it correspondent to achieve the objectives of the study. It includes designing samples, sources of data, collection procedure of data, analysis techniques data, etc. It was an exploratory study. So the methodology of this Dissertation report has used was observation and sometimes discussion with the executives of the bank. Besides the Dissertation have talked with various clients of the bank. For more clarification the Dissertation have discussed with top management of the bank. Beside the Dissertation has taken help from various papers made by Commercial Banks.
1.6.1 The “Primary Sources” are as follows:
Face to face conversation with the respective officers and staff of the branch. Face to face conversation with clients visited in the branch. Relevant field study as provided by the officer concern.
1.6.2 The “Secondary Sources” are as follows:
Annual report of DBBL
Website of the DBBL
Various books, articles regarding the Electronics Banking function of DBBL, News paper articles.
1.7 Limitation of the study:
Time Constraints: As dissertation period is only for four months, so it is a limited time to learn a more and prepare a report to submit. Inadequate of Information: The relative information not so sufficient to get ready for an extra ordinary report. Insufficient time of Bank Personnel: As the bank personnel are so much busy so it is hard to keep peace with them and get
overall support from them. Fear of Disclosure: There was fear of disclosure in bank personnel about their some confidential activities, which is a constraint in the way to make a good report.
Chapter Two
Organizational Profile of DBBL
2.1 History of Bank:
The first banks were probably the religious temples of the ancient world, and were probably established in the third millennium B.C. Banks probably predated the invention of money. Deposits initially consisted of grain and later other goods including cattle, agricultural implements, and eventually precious metals such as gold, in the form of easy-to-carry compressed plates. Temples and palaces were the safest places to store gold as they were constantly attended and well built. As sacred places, temples presented an extra deterrent to would-be thieves. There are extant records of loans from the 18th century BC in Babylon that were made by temple priests/monks to merchants.
2.2 Definition of Bank:
The definition of a bank varies from country to country. See the relevant country page (below) for more information. Under English common law, a banker is defined as a person who carries on the business of banking, which is specified as: conducting current accounts for his customers
paying cheques drawn on him, and
Collecting cheques for his customers.
2.3Banking History of Bangladesh:
At independence the value of the taka, Bangladesh’s unit of currency, was set between 7.5 and 8.0 to US$1. With the exception of FY 1978, the taka’s value relative to the dollar declined every year from 1971 through the end of 1987. To help offset this phenomenon, Bangladesh first used the compensatory financing facility of the International Monetary Fund (IMF–see Glossary) in FY 1974. Despite the increasing need for assistance, the Mujib government was initially unwilling to meet the IMF’s conditions on monetary and fiscal policy. By FY1975, however, the government revised its stance; declaring a devaluation of the taka by 56 percent and agreeing to the establishment by the World Bank of the Bangladesh Aid Group (see Foreign Assistance, this ch.). Between 1980 and 1983, the taka sustained a decline of some 50 percent because of deterioration in Bangladesh’s balance of payments. Between 1985 and 1987, the taka was adjusted in frequent incremental steps, stabilizing again around 12 percent lower in real terms against the United States dollar, but at the same time narrowing the difference between the official rate and the preferential secondary rate from 15 percent to 7.5 percent. 2.4 Brief History of DBBL
Dutch-Bangla Bank started operation is Bangladesh’s first joint venture bank. The bank was an effort by local shareholders spearheaded by M Sahabuddin Ahmed (founder chairman) and the Dutch company FMO. From the onset, the focus of the bank has been financing high-growth manufacturing industries in Bangladesh. The rationale being that the manufacturing sector exports Bangladeshi products worldwide. Thereby financing and concentrating on this sector allows Bangladesh to achieve the desired growth. DBBL’s other focus is Corporate Social Responsiblity (CSR). Even though CSR is now a cliche, DBBL is the pioneer in this sector and termed the contribution simply as ‘social responsiblity’. Due to its investment in this sector, DBBL has become one of the largest donors and the largest bank donor in Bangladesh. The bank has won numerous international awards because of its unique approach as a socially conscious bank. DBBL was the first bank in Bangladesh to be fully automated. The Electronic-Banking Division was established in 2002 to undertake rapid automation and bring modern banking services into this field. Full automation was completed in 2003 and hereby introduced plastic money to the Bangladeshi masses. DBBL also operates the nation’s largest ATM fleet and in the process drastically cut consumer costs and fees by 80%. Moreover, DBBL choosing the low profitability route for this sector has surprised many critics. DBBL had pursued the mass automation in Banking as a CSR activity and never intended profitability from this sector. As a result it now provides unrivaled banking technology offerings to all its customers. Because of this mindset, most local banks have joined DBBL’s banking infrastructure instead of pursuing their own. Even with a history of hefty technological investments and an even larger donations, consumer and investor confidence has never waned. Dutch-Bangla Bank stock set the record for the highest share price in the Dhaka Stock Exchange in 2008. 2.5 Profile of Dutch-Bangla Bank Limited : (As at 30 September,2012)
2.6 Vision of DBBL
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.
2.7 Mission of DBBL
Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a commitment to social cause. “Profits alone” do not hold a central focus in the Bank’s operation; because “man does not live by bread and butter alone”.
CHAPTER THREE
Electronic Banking System in DBBL
3.1 Electronic or Digital Banking System of Bangladesh Bank:
Bangladesh Bank (BB) has adopted advanced ICT to be digitized in all spheres of its functions including monetary policy, banking supervision and internal management. BB has already introduced e-commerce, e-banking, automated clearing house etc.; a historic move towards achieving higher productivity across all economic sectors including agriculture and SME through use of ICTs. Engineers could be pioneers innovating new applications of ICT, and reaching them to the doorstep of the common people. The universal role of Information and Communication Technology (ICT) is vital for socio-economic development of a developing country like Bangladesh. Availability of information helps increase productivity, ensures fair and competitive market and empowers marginal people. Digital technology makes doing things easily from any place — using mobile phone as a medium of money transfer and payment of utility bills, for example. Digital society means knowledge based society. Therefore, the government has placed the vision of 2021 — the year of Golden Jubilee of our independence. The vision envisages a digital Bangladesh with excellence in information and communication technology and high-performing inclusive economic growth. 3.2 Electronic Banking:
Dutch-Bangla Bank is the first bank in Bangladesh to be fully automated and introduce Electronic Banking. The automation was completed in 2003, but further additions and features are continuously being added and upgraded. DBBL has adopted the same exact automation solution used my many international banking giants. Although this was significantly more expensive than other solutions, it is a small price to pay for a client’s peace of mind. A DBBL client now has unrivaled access to banking from any DBBL branch, ATM and POS. All of these services are free-of-charge and are surprisingly affordable for everyone. Even though DBBL has invested more in Electronic Banking more than any other bank, the division was never intended to be profitable. It was undertaken with the same mindset DBBL undertakes its Corporate Social Responsibility tasks. This is why you pay barely anything even though these same services would cost you much more in other countries and other banks. Never has any bank given so much for free. DBBL also has the largest ATM network in Bangladesh. This gives DBBL clients full access to ‘anytime anywhere’ banking nationwide. All international and many local banks use the DBBL ATM network for their own clients. DBBL has installed over 800 ATMs nationwide. As with most things, ATM access to all DBBL ATMs is unlimited and free for all DBBL clients. If a client of a member bank (not DBBL) uses a DBBL ATM, the member bank may add a transaction charge.
3.3Electronic Banking Basics:
To most people, electronic banking means 24-hour access to cash through an automated teller machine (ATM) or paychecks deposited directly into checking or savings accounts. Electronic banking, also known as electronic fund transfer (EFT), uses computer and electronic technology as a substitute for checks and other paper transactions. EFTs are initiated through devices such as cards or codes that you use to gain access to your account. Many financial institutions use an automated teller machine (ATM) card and a personal identification number (PIN) for this purpose. The federal Electronic Fund Transfer Act (EFT Act) covers some consumer transactions.
3 .4Lost or Stolen EFT Cards:
If your credit card is lost or stolen, you can’t lose more than $50. If someone uses your ATM or EFT card without your permission, you can lose much more. If you report an ATM or EFT card missing before it is used without your permission, the EFT Act says the card issuer cannot hold you responsible for any unauthorized withdrawals. If unauthorized use occurs before you report it, the amount you can be held responsible for depends upon how quickly you report the loss to the card issuer. If you report the loss within two business days after you realize your card is missing, you will not be responsible for more than $50 for unauthorized use.
3.5 Limited Stop-Payment Privileges:
When you use an electronic fund transfer, the EFT Act does not give you the right to stop payment. If your purchase is defective or your order is not delivered, it is as if you had paid cash. That is, it is up to you to resolve the problem with the seller and get your money back. There is one situation, however, when you can stop payment. If you have arranged regular payments out of your account to third parties, such as life insurance companies, you can stop payment if you notify your institution at least three business days before the scheduled transfer. The notice may be oral or written, but the institution may require a written follow-up to be made within 14 days of the oral notice. If you fail to provide the written
follow-up, the institution’s responsibility to stop payment ends. Although federal law provides only limited rights to stop payment, individual financial institutions may offer more rights or state laws may require them. If this feature is important to you, you may want to shop around to be sure you are getting the best “stop payment” terms available.
3.6 Suggestions:
If you decide to use EFT, keep these tips in mind:
Take care of your EFT card. Know where it is at all times; if you lose it, report it as soon as possible. Choose a PIN different from your address, telephone number, social security number, or birth date. Choosing a different number will make it more difficult for a thief to use your EFT card. Keep and compare your EFT receipts with your periodic statements so that you can find errors or unauthorized transfers and report them. Make sure you know and trust the merchant before you provide any bank account information to pre-authorize debits to your account.
3.7 Internet Banking of DBBL:
Internet Banking Features: The following are the Internet Banking Features for DBBL’s 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 customer’s account within the bank.
3.8 DBBL’s ATM:
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 pre-paid cards
3.9 Debit / Credit Cards:
Dutch-Bangla Bank family, always believe that, as in everything else, you deserve the best in banking too. Therefore, we constantly strive to cater to all your financial needs with world class products to become your trusted partner. If you need any information or assistance about a service or a product, please let us know. We are here to assist you 365 days round the clock through our Customer Care Center. 1. Call our 24-hours Customer Service numbers: 9571902-3, 7170024-5, 9555145. 2. Click to send an e-mail to:
3. Visit the Help Desk at any DBBL Branch or
4. Write to us at:
Dutch-Bangla Bank Limited
Card Division, Head Office
People Insurance Building (4th Floor)
36, Dilkusha C/A
Dhaka-1000
Bangladesh
3.10 Internet Banking:
If you need help with the log in process of Internet Banking or have technical question, please call DBBL Internet Banking Help Desk at 880-2-7174095-7. Internet Banking Support can be reached via e-mail at
Or write to:
DBBL Internet Banking Help Desk
Dutch-Bangla Bank Ltd. (19th Floor)
36, Dilkusha C/A, Dhaka-1000
Bangladesh
3.11 SMS & Alert Banking:
If you need help for operation process of SMS & Alert Banking or have technical questions, please call DBBL SMS & Alert Banking Help Desk at 880-2-7174095-7. SMS & Alert Banking Support can be reached via e-mail at- [email protected] Or write to:
DBBL SMS & Alert Banking Help Desk
Dutch-Bangla Bank Ltd. (19th Floor)
36 Dilkusha C/A, Dhaka-1000
Bangladesh
3.12 ATM Card Products of DBBL:
DBBL-NEXUS Classic Card (debit)
DBBL-NEXUS Maestro card (debit)
DBBL-NEXUS Gold OD card (credit)
DBBL-NEXUS Silver OD card (credit)
DBBL-NEXUS VISA Electron card (debit)
3.12.1 NEXUSPRO CARDS:
Nexus PRO is a revolutionary card first and only offered by DBBL in Bangladesh. It is the most advanced card in the world. Unlike normal cards, Nexus PRO features a processor chip that makes the card the most secure and faster than any card worldwide. DBBL has worked with both Visa and MasterCard to bring this revolutionary card to the market. It took 3 years for DBBL to implement what Visa and MasterCard both deem as the future card standard. It encompasses the digital age and the new technologies that have emerged in the electronic age. Visa and MasterCard both realized that the normal card is 40 years old and the amounts of fraudulent transactions were losing customers billions. North America will be having Nexus PRO card compliant by 2016.But now DBBL already the only fully Nexus PRO compliant and certified. DBBL’s entire infrastructure (including ATMs) has had a costly upgrade to enable Nexus PRO to Bangladesh.
3.12.2 Debit Cards:
DBBL is the market leader in Debit Cards. All DBBL debit cards gives you unlimited and free access to all DBBL ATMs and POS nationwide. There are no transaction or hidden costs associated with DBBL cards and accounts. By default, when opening a DBBL account, all clients will receive the DBBL Nexus Classic card. A debit card is more advanced than a credit card. DBBL Debit cards also have more features than credit cards and are fully recognized by Visa and MasterCard. DBBL Debit cards are also more secure, convenient and cheaper than any credit card or debit card in the market. Debit cards can withdraw money from your account directly while a credit card has to issue a ‘loan’. DBBL debit cards come with the client’s photo printed on it and requires a secret PIN verification by the client. A credit card only requires a signature (which can be forged) and no PIN verification for a transaction. That is why, for day-to-day banking, DBBL recommends debit cards. Each card comes with a PIN number which must be protected at all times by the client. The PIN number is used as a password for withdrawing cash at DBBL ATMs and accessing DBBL banking services.
3.12.3 Credit Cards:
DBBL offers the most secure credit card in the market. A credit card offers greater flexibility for international travel in locations which do not accommodate DBBL Debit Cards. But a credit card is inherently less secure unless it is a Nexus-Pro credit card. The reason why DBBL entered the credit card market at such a late stage is because it did not want to compromise your security until DBBL itself implemented Nexus-Pro technologies. All credit card DBBL issues are Nexus-Pro credit cards.
3.12.4 Internet Banking:
DBBL allows you to do seamless internet banking. This allows you to review your account, statements, paying bills as well as making some transactions. Because of local banking regulations, DBBL is not allowed to provide some types of transactions even though it is fully capable.
Internet Banking Features
3.12.5 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 customer’s account within the bank. Pay Bills the customer can pay his utility bill (like Electricity, WASA, GAS, Telephone, Mobile, ISP etc.) Standing Instructions the customer can setup, modify or delete standing instructions for transferring fund from one of his account to another account (his account or 3rd party). Open/Modify Term Deposit The customer can open a term deposit by transferring funds from one of his current or savings accounts with the bank. He can also modify the TD and redeem / part-redeem it. Loan Repayments the customer can make payment of the loan installment from his CASA account. Statement Request The customer can make a request for account statement for a required period. The bank will manually service this request. 3.12.6 Foreign Remittance:
Remittance through Exchange House
At the beginning of the year 2005, our Bank has been exerting much emphasis on INWARD REMITTANCE. By this time the Bank established extensive drawing arrangement network with Banks and Exchange Companies located in the important countries of the world namely in the United Arab Emirates, State of Kuwait, State of Qatar, State of Bahrain, Italy, Canada and United States of America. In the meantime, Dutch-Bangla Bank Limited gained the faith of the Bangladeshi Wage Earners in sending their hard-earned money to their respective beneficiaries in Bangladesh in shortest possible time. Expatriates Bangladeshi Wage Earners residing in those countries can now easily remit their hard-earned money to Bangladesh with confidence, safety and speed.
3.12.7 Western Union:
Western Union Financial Services Inc. U.S.A. is a reliable money transfer company. Dutch-Bangla Bank Limited has set up a Representation Agreement with Western Union Financial Services Inc. U.S.A. as on 14th February 2006. Millions of people have confidence on Western Union for sending money to their friends and family. Through Western Union Money Transfer Service, Bangladeshi Wage Earners can send and receive money quickly from over 225,000 Western Union Agent Locations in over 197 countries and territories world wide, only by visiting any branches of Dutch-Bangla Bank Limited in Bangladesh. 3.12.8 Mobile Banking:
Mobile Banking is a Banking process without bank branch which provides financial services to unbanked communities efficiently and at affordable cost. To provide banking and financial services, such as cash-in, cash out, merchant payment, utility payment, salary disbursement, foreign remittance, government allowance disbursement, ATM money withdrawal through mobile technology devices, i.e. Mobile Phone, is called Mobile Banking.
3.12.9 Life Line:
Credit Facility from Debit Card enjoys credit facility directly from your debit card. Get access to the money in your own account as well as extra money when you need it, even at ATMs CHAPTER FOUR
ANALYSIS & SWOT ANALYSIS OF DBBL
4.1 Analysis:
Banking is one the most competitive industries of Bangladesh that has seen a huge amount of growth during the last decade. A large number of new banks have made their places in the industry and yet there are more to register in the list. In such a highly competitive service industry, the importance of credit risk management cannot be de-emphasized. Improved risk management system and loyalty gives a firm better base than its rivals and allows it flourish in the industry. All financial activates involve a certain degree of risk and particularly, the financial institutions of the modern era are engaged in various complex financial activities requiring them to put proper attention to every detail.
4. 2 Collateral Security:
The major functional of the risk managers are to minimize the risk on credit ensure the loan security. Banks accepts two types of facility-
a) Primary security – Hypothecation of stocks in trade, Hypothecations of Machineries and equipments etc. b) Collateral security – Land, Building, Ornaments etc.
Based on primary security the risk managers recommend for approval of loan. Collateral Security is the secondary security components, loan does not depend on collateral security; it does strengthen the loan security.
4. 3 Analyzing Financial Spread Sheet:
Analyze of financial spreadsheet of a firm / organization for lending is the second major credit risk management system. A Financial Spread Sheet (FSS) has been development by Dutch Bangla Bank which may be used while analyzing the credit risk elements of a credit proposal from financial point of view.
The FSS is well designed and programmed software having two parts. Input and Output Sheets. The financial numbers of borrowers need to be inputted in the input Sheets which will then automatically generate the Output Sheets. 4.4 E-Business and online banking in Bangladesh: An analysis:
Bangladesh is still lagging behind in availing the opportunity of e-business. However, the banking sector of the country as a whole is promoting online banking system, which is playing a complementary role in making e-business popular. No doubt, Internet has opened up a new horizon of e-business, creating immense opportunities for marketing products as well as managing banking internationally. Gradually wireless Internet system has been creating a new paradigm and electronic fund transfer will become a suitable formation. Experts believe that e-business can improve the quality of services, save customers’ valuable time, make movement of goods from one place to another easier. E-business brings a new channel of distribution process. This leads to change in the regulatory issues and cross border trade through emerging new marketing distribution channel. This reduces transaction time, ensures boundary less trade and accuracy. In developed nations, e-business creates an opportunity for direct selling of products to the customers without using any intermediaries. This process occurs mainly in the four systems: businesses to business (B2B), business to consumer (B2C), business to government (B2G) and consumer to consumer (C2C). 4.5 Present Status:
Bangladeshi companies and organizations are facing problems in starting full-fledged e-business. Network is a mode of communication with the computers. Networks of computers can be classified in following ways: Local area network, Metropolitan area network, and World Wide area network. Multiple computers connected through telephone lines, cable systems, and wireless technologies are also required. Bangladesh ranked 118th in the global Network Readiness Index in 2009-10 up from 130th a year ago, showing an upward trend in the information and communication technology sector. In South Asia, India ranked 43rd, Sri Lanka 72nd, Pakistan 87th and Nepal 124th in the ‘Global Information Technology Report 2010-2011’ released by The World Economic Forum (WEF) on 3rd April 2010. As such, Bangladesh has to go a long way to develop its network for arranging Digital Bangladesh by the year 2021 and public and private cooperation and strategic alliance is required to develop e-business system in the country. Electronic Payment Systems for e-business includes broad geographic presence and acceptance by a large number of merchants or programmers. Participants in an electronic payment system may include users, financial institutions, business personnel, industrialists, merchants and third party processor etc. WiMAX stands for Worldwide Interoperability for Microwave Access which offers wireless transmission of data via different transmission modes, from point-to-multipoint links to portable and fully mobile internet access. Telephone density is awfully little in Bangladesh. It is far less in comparison to other developed nations of the world as well as the neighboring countries. Kabir (2008) depicted that Mobile Phones (millions) are 36.4, Fixed Lines (PSTN) (millions) are 1.2 Total telecom users (millions) are 37.6, Teledensity (%) is 26.8 in the year 2008. Outside Dhaka, at present a few computer network infrastructures have been developed so far. Apart from some educational institutes outside Dhaka, observation finds that most of the LAN setups are Dhaka centric. Bangladesh has been connected to worldwide Internet Super High Way in 2006 through an undersea submarine cable. 4.6 Ratio Analysis:
Analytical tools and Software used
The collected data have been tabulated after collection. Through tabulation data are condensed into necessary tables to analyze and interpret as to achieve the desired objectives. Data have been analyzed by spreadsheet program Microsoft EXCEL’2007. The program has been used table and graphical representation. Microsoft Word 2007 has been used to process all necessary research writing, charts, graphs and tables. Trend Analysis is performed through Balance Sheet Analysis, Profit-loss Account analysis and other financial statement analysis. A. Ratio Analysis by component Ratings and composite ratings. CAMEL rating of Bangladesh bank has played a vital role for analyzing Performance. B. In Trend analysis indicators such as Authorized Capital, Paid-up Capital, Statutory Reserve, Shareholders’ Equity, Fixed Assets, Total Assets, Total Deposits, Long-term Debt, Loans and Advances, Investment are used to determine the bank’s financial condition and performance whether the bank is improving or deteriorating. In this purpose data from three successive years are compared.
Ratio analysis is the primary tool for examining the firm’s financial position and performance. Indicators such as Capital Adequacy Ratio, Credit Deposit Ratio, Percentage of classified loans against total loans and advances, Cost of fund (Deposit cost & Administrative cost, Return on Investment (ROI), Return on Assets (ROA) and Price Earnings Ratio were used in Ratio analysis for determining the bank’s current performance and position, comparing in successive three years. The analysis is obtained by the following formulas: 1. Capital adequacy ratio = (Cash + Marketable Securities + Account Receivable) / Current Liabilities. 2. Credit Deposit Ratio = Total Credit / Total Deposit
3. Percentage of classified loans against total loans = Classified loans / Total loans * 100% 4. Return on Investment (ROI) = Total Income / Total Assets
5. Return on Assets (ROA) = Net Income / Total Assets
6. Price Earnings Ratio = Earnings per Share / Market Price of Stock 7. Earnings per share = Profit attributable to ordinary shareholders/Number of ordinary shares in issue. 8. Return on Equity= Profit after Tax / Average Shareholders Equity. 9. Cost to Income Ratio: Operating expenses as a percentage of total income
4.7 SWOT analysis:
SWOT analysis is the detailed study of an organization’s exposure and potential in perspective of its strengths, weakness, opportunity and threat. SWOT analysis gives an organization an insight of what they can do in future
and how they can compete with their existing competitors. This tool is very important to identify the current position of the organization relative to others and is grounded in the basic principle that strategy-making efforts must aim at producing a good fit between a company’s resource capability and its external situation, which are playing in the same field and also used in the strategic analysis of the organization. 4.8 Strength:
DBBL is the first Bangladeshi-European Joint venture Bank in Bangladesh. DBBL allows all local remittances such as TT, DD, and PO etc. free of cost. DBBL supports humanitarian and charitable activities and causes and spends a substantial amount from its income for these purposes. DBBL promotes different socio-cultural and sports activities. DBBL has a very competent and experienced top Management.
DBBL has strong Liquidity Position & stable Source of Funds.
4.9 Weakness:
The remuneration of the officers of DBBL is lower compared to other private banks. Even the internship students are paid nothing. This is why high skilled human resources are discouraged to join here. Lower rates of DPS & FDR
The poor quality of the ATM card
DBBL is online based Bank, if sometimes occurs system problem, then most of the banking activities has been stop Lack of computers & others necessary instruments.
4.10 Opportunities:
DBBL is operating based on Islamic Shariah. As Bangladesh is a Muslim country, the Shariah banking has been able to attract customers and achieved a great success in the private banking sector. The economy of the country is expanding. The business outside Dhaka is also expanding. As a result, the demand for banking service is increasing day by day. So DBBL can open more banks in the country and can expand their business. Rural Development Scheme of DBBL is a great chance to save the county’s poor people from being taking loan from different NGOs or few banks with higher interest rate DBBL doing various types of social work & established their well reputation within the country.
4.11 Threats:
The default risks of all terms of loan have to be minimizing in order to sustain in the financial market, because default risk leads the organization towards to bankrupt. DBBL has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem if not elimination. In Bangladesh, after economic reform, more private bank has started their operation in the country. They are coming with different types of attracting products. This has increased the completion among the private banks. Most of the private bank DPS & FDR rate is higher than DBBL. Sometimes occurs online problem of the bank, so in this situation customer can deposits their money in another bank.
Chapter FIVE
Recommendations & Conclusion
5.1Recommendations:
Bangladesh bank can play a major role at this juncture by highlighting the benefits of online banking to the schedule bank sand encourage them to use customized software for their day to day operations Technological and infrastructural barriers can be overcome if existing law sand regulations are implemented. Barrier of cost can be resolved through lessening the dependency on imported technology from foreign countries. Government policy should be favorable for the online banking expansion. In this world advertisement is the most integrated part of any progress which can cot avoid expanding business network as people like to do what he/she is listening and hearing from any corner. Transaction in cash should be easy for illiterate and lower educated clients. Ratio of employees should increase with the clients.
It is necessary to increase the rate of interest for deposit. The entire department should be well informed regarding their goals and objectives. It is essential to execute company objectives into individual target. There must be a clear allocation of responsibilities authority and accountability. The bank should introduce more promotional activities.
The bank should take the initiative to develop an effective research and development center to get innovative ideas to capture the competitive market. Job description should be clarified and proper training should be imparted to improve the performance of bottom level management. While the other banks are launching “Consumer Credit Scheme” DBBL is failing to launch this kind of scheme. The management can undertake such sort of schemes and earn profit. To meet today’s urge of the customer, the bank should introduce E – Banking system, Credit Card and Automated Teller Machine (ATM).
5.2 Conclusion:
E-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 OB through out the world
Really it is an enchanting for me to have a practical exposure in DBBL. Because without practical exposure it was not possible for me to compare the classroom theory with practical experience. Moreover it is well established that theory without practices is blind. Co-ordination of theory and practical subject in the field of Banking studies gets due importance at this moment when the whole world are taking preparation to enter into a new Millennium. But in spire of this, we find a gape existing between Theory and Practical knowledge. To minimize this gape Internship program under MBA program is essential.
As an organization the DBBL has earned the reputation of top banking operation in Bangladesh. It is relentless in pursuit of business innovation and improvement. It has a reputation as a partner of consumer growth. Though it is a new bank, DBBL makes a strong position through its various activities. Its number of clients, amount of deposit and investment money increases day by day. This bank already has shown impressive performance in investment.
Consumers are more or less satisfied with the present services of the bank. Management should think to start new services and take different types of marketing strategy to get more customers in this competition market of banking.
This report tries to figure out most of the indicators of problems and strengths of DBBL as a valid pretender in the competitive banking sector of Bangladesh. The main philosophy of DBBL is to diminish interest and charge or pay fixed interest on loans or deposits and at the same time establish an egalitarian society based on the principle of social justice and equity Instead of predator mind interest on deposits.
5.3 Bibliography & References
Annual Report of Dutch-Bangla Bank Limited 2009, 2010,2011,2012. Different types of Brochures of DBBL
Training Material and Book Lets from IBTRA. (Islamic Bank Training and Research Academy) Economic Trends: Statistics Department of BD Bank –Jan 2012. www.dutchbanglabank.com
Internet edition of Annual Report 2011 of Bangladesh Bank.
Commercial Bank Management by Peter S. Rose
International Financial Management by Jeff Madura
M. I. Khalil, I. Ahmad and M. D. H. Khan (2003) “Internet Banking: Development and Prospects in Bangladesh”.“Internship report on E-banking in Southeast Bank ltd.” available[online] http://bba-mba-arena.blogspot.com/p/internshipreports_06.html; Accessed on April 15th, 2012. G.P. Schneider (2010) “Electronic Commerce”.
M.T.Fordney,L.L.FrenchandJ.J.Foll(2007)“AdministrativeMedicalAssisting”SixthEdition.http://en.wikipedia.org/wiki/Automated_teller_machine, accessed on march 20, 2012
5.4 List of Abbreviation
DBBL : Dutch-Bangla Bank Limited
ECC: Export Cash Credit
PAD: Payment against Documents
FDBP: Foreign Documentary Bills Purchased
LDBP: Local Documentary Bills Purchased
FBP: Foreign Bill Purchased
P0: Payment Order
TT: Telegraphic Transfer
LC: Letter of Credit
BTB L/C: Back to Back Letter of Credit
FDD: Foreign Demand Draft
FTT: Foreign Telegraphic Transfer
BG: Bank Guarantee
FBG: Foreign Bank Guarantee
VAT: Value added Tax
SS: Sub-standard
DF: Doubtful
BL: Bad/Loss
IRC: Import Registration Certificate
LCA: Letter of Credit Authorization
BB: Bangladesh Bank
SWIFT: Society for inter Bank Financial Telecommunication
EPB: Export Promotion Bureau
TCB: Trading Corporation of Bangladesh
FOB: Fee On Board
