CHAPTER: ONE

INTRODUCTION

Introduction of the Topic

In the present world money is circulated all over the globe. Globalization, technological
advances and other factors money is circulating unimaginably. Financial Institutions
mainly banks play a pivotal role in matching a depositor and lenders and channelling
money and making the economy more efficient. Although the history of Banking goes
back to the 14th century in Europe but Banks are now everywhere. Banks in Bangladesh
play a significant role compared to other financial Institutions.

However, the competition in the banking industry has intensified more than ever before.
Global financial crisis, stock market crash, recessions and other factors affected the
banking industry. So banks should position themselves at a unique place in the minds
of the customers by offering attractive offers such as higher interest rates or by offering
superior service to the customers. Services include financial advice, flexible rates or
dates of payment, portfolio management etc.

Internet banking is a service offered to the customers which includes viewing the
balances on accounts, checking the transactions, downloading useful information,
transfer of funds, paying third parties, making loan applications etc. from a secured
website of the bank. Internet banking has opened up a new field of competition for
banks. To operate internet an individual needs the customer number and password.
Internet banking has started in the 1980s but it is relatively a new concept in
Bangladesh.

Internet banking is the practice of handling all the bank transactions through internet.
We are blessed with such unique technologies where all our works gets completed
within seconds. Internet Banking is one of such technologies. With the help of internet
banking, we can deposit and withdraw amount our self directly to our account, make all
kinds of bill payments, tax payments etc. We can pay our bills like telephone, mobile,
credit cards etc. through internet just by once registering with our bank. After making
registration, we can pay our bills as and when required. Internet banking allow us to
access our account, so that we can know instantly which amount is credited or debited
in our bank account which in turn will help to solve our issues if any. It is an easier way
to transfer amount to another account to which we have to make payment to the party.
When we apply for internet banking, bank provides us with login id and password. The
password provided by the bank should be changed immediately and should not be given
to anybody else. The password should be alpha-numeric and should be changed on
frequent basis. This information must be kept at utmost secret, as the password can be
hacked by any person.

The Internet has provided a new and inexpensive channel for banks to reach out to their
customers. It allows customers to access banks’ facilities round the clock and 7 days a
week.
It also allows customers to access these facilities from remote sites/home etc. However,
all these capabilities come with a price. The highly unregulated Internet provides a less
than secure environment for the banks to interface. The diversity in computer,
communication and software technologies used by the banks vastly increases the
challenges facing the internet bankers.

Internet banking isn't out to change our money habits. Instead, it uses today's computer
technology to give us the option of bypassing the time-consuming, paper-based aspects
of traditional banking in order to manage our finances more quickly and efficiently. The
advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions
have used powerful computer networks to automate millions of daily transactions;
today, often the only paper record is the customer's receipt at the point of sale. Now that
its customers are connected to the Internet via personal computers, banks envision
similar economic advantages by adapting those same internal electronic processes to
home use. Banks point of view internet banking is as a powerful "value added" tool to
attract and retain new customers while helping to eliminate costly paper handling and
teller interactions in an increasingly competitive banking environment. Internet banking
allows customers to conduct financial transactions on a secure website operated by their
retail or virtual bank, credit union or building society.
Background of the study

The EMBA program is designed to focus on practical and professional development of

people open to take up business as a profession as well as service as a career. Internship
program is made essential to this EMBA program with the aim of developing the real
life sense. Before starting exploration to the real occupational field, students get some
professional and practical knowledge on their interested fields.

As per the requirement of EMBA program I applied and get appointed to Janata Bank,
Jatrabari Corporate branch from to. A topic has been selected “Factors influencing the
adoption of Internet Banking Services of Janata Bank Ltd.” to conduct study and
prepare an internship report which is mandatory to the internship program.

I have prepared this report on basis of Factors influencing the adoption of Internet
Banking Services of Janata Bank Ltd. I have done this report as the requirement
EMBA program. My instructor Mr. Md. Zahir Uddin Arif has assigned this topic. I
choose Janata Bank Limited for my study. I collected information about Factors
influencing the adoption of Internet Banking Services of JBL and prepared this
report. I have tried my level best to present my experience of the organization and in
this report.

Literature Review

Internet Banking:

A system allowing individuals to perform banking activities at home via the internet is
internet banking. Some internet banks are traditional banks which also offer internet
banking, while others are internet only and have no physical presence. Internet banking
through traditional banks enables customers to perform all routine transactions, such as
account transfers, balance inquiries, bill payments, and stop-payment requests, and
some even offer internet loan and credit card applications. Account information can be
accessed anytime, day or night, and can be done from anywhere. A few internet banks
update information in real time, while others do it daily. Once information has been
entered, it doesn't need to be re-entered for similar subsequent checks, and future
payments can be scheduled to occur automatically. Many banks allow for file transfer
between their program and popular accounting software packages, to simplify record
keeping. Despite the advantages, there are a few drawbacks. It does take some time to
set up and get used to an internet account. Also, some banks only offer internet banking
in a limited area. In addition, when an account holder pays internet, he/she may have to
put in a check request as much as two weeks before the payment is due, but the bank
may withdraw the money from the account the day that request is received, meaning
the person has lost up to two weeks of interest on that payment. Internet only banks
have a few additional drawbacks: an account holder has to mail in deposits (other than
direct deposits), and some services that traditional banks offer are difficult or impossible
for internet-only banks to offer, such as traveller’s checks and cashier's checks.

Benefits of internet banking:

Let’s start off with the advantages of internet banking. First and foremost, internet
banking is very convenient. It will allow you to pay your bills and make transactions
anytime during the day and the week. The bank will never close because you can access
it through your laptop or computer. So, no matter in which country you are anywhere in
the world, you can go internet and handle your finances.

Secondly, internet banking is very fast, effective and efficient. Over the Internet, you
can make transactions that are typically executed and performed at a much faster pace
than at ATM’s. Internet banking services also give you the option of handling several
different bank accounts from one site itself.

- Pay bills
- Switch money from one account to the other

- Keeping up to date with all of your latest cheque payments etc.

And doing all of the other things people does at banks in the comfort of their own home.
Most internet banking sites are compatible with programs like Microsoft Money and
Quicken, which makes management of assets more effective.
Common Internet Banking Services:
Banking transactions can range from something as basic as a retail account balance
inquiry to a large business-to-business funds transfer. On line banking services, like
those delivered through other delivery channels, are typically classified based on the
type of customer they support. The following table lists some of the common retail on
line banking services offered by banks are as follows:

• Account management
• Bill payment and presentment
• New account opening
• Investment/Brokerage services
• Loan application and approval
• Business-to-business payments

Internet Banking Components:

On line banking systems can vary significantly in their configuration depending on a
number of factors. Banks should choose their internet banking system configuration,
including outsourcing relationships, based on four factors:

• Strategic objectives for on line banking;

• Scope, scale, and complexity of equipment, systems, and activities;
• Technology expertise; and
• Security and internal control requirements.

Banks may choose to support their online banking services internally. Alternatively,
Banks can outsource any aspect of their online banking systems to third parties. The
following entities could provide or host (i.e., allow applications to reside on their
servers) on line banking-related services for banks:

• Another financial institution,

• Internet service provider,
• Internet banking software vendor or processor,
• Core banking vendor or processor,
 • Managed security service provider,
• Bill payment provider,
• Credit bureau, and
• Credit scoring company.

Required Physical Infrastructure for Internet Banking:

Internet: The Internet is a global system of interconnected computer networks that use
the standard Internet Protocol Suite (TCP/IP) to serve billions of users worldwide. It is
a network of networks that consists of millions of private, public, academic, business,
and government networks of local to global scope that are linked by a broad array of
electronic and optical networking technologies. The Internet carries a vast array of
information resources and services, most notably the inter-linked hypertext documents
of the World Wide Web (WWW) and the infrastructure to support electronic mail.

Intranet: An intranet is a private computer network that uses Internet Protocol

technologies to securely share any part of an organization's information or network
operating system within that organization. The term is used in contrast to internet, a
network between organizations, and instead refers to a network within an organization.
Sometimes the term refers only to the organization's internal website but may be a more
extensive part of the organization's information technology infrastructure. It may host
multiple private websites and constitute an important component and focal point of
internal communication and collaboration.

Hardware: The essential hardware required to build a complete internet banking

system includes:

• Personal Computers
• Servers
• Routers
• Firewalls
• Modems
• Switches
 • POS (Point of Sale) Terminals
• ATM (Automated Teller Machines) booths

Software: For conducting internet banking operations several software are now
available such as FLEXCUBE, a banking software which enables banks to process and
store banking transaction data and making payments through a dedicated client-server
network. Different banks use different types of software depending on the cost and other
factors.

Present Scenario of Internet Banking in Bangladesh:

The commercial banking system dominates Bangladesh's financial sector. Bangladesh
Bank is the Central Bank of Bangladesh and the chief regulatory authority in the sector.
The banking sector of Bangladesh comprises four categories of scheduled banks. These
are state-owned commercial banks (SCBs), state-owned development finance
institutions (DFIs), private commercial banks (PCBs) and foreign commercial banks
(FCBs). Internet Banking in Bangladesh is yet to develop according to international
standard. At present, several private commercial banks (PCBs) and foreign commercial
banks (FCBs) offer limited services of telephone banking, internet banking facilities
working within the branches of individual bank in a closed network environment. As a
part of stepping towards internet-banking, the FCBs have played the pioneering role
with adoption of modern technology in retail banking during the early 1990s whereas
the state-owned commercial banks (SCBs) and PCBs came forward with such services
in a limited scale during the late 1990s. Moreover, the banking industry as a whole,
except for the four specialized banks (SBs), rushed to offer technology-based banking
services during the middle of the current decade. The existing form of e-banking that
satisfies customer demand in banking activities electronically throughout the world are
PC banking or PC home banking that include internet banking, mobile banking, and
telephone banking.

After connecting with the information superhighway, the total country is connected by
fibre optic backbone; certainly, it is a milestone for infrastructure of implementing
internet banking in Bangladesh. In Bangladesh most of the banking hardware is
available for internet banking is entirely procured from foreign origins with a local
distributor. Internet banking operation hardware includes; servers, workstation,
printers, scanner ATM, POS terminals, etc. and networking hardware includes switch,
Router, V-SAT connectivity etc. The software support for internet banking, i.e.
FLEXCUBE is available in Bangladesh. Again, Bangladesh Government is working on
the copyright law and the preservation of intellectual property act. After the successful
implementation of all these policies and strategies we are expecting that more than 50%
of the banks will be offering internet banking facilities which is now 12% only.

Objective of the Study

Broad Objective: The broad objectives of this report is to fulfil my EMBA program that helps
a lot to learn about the practical situation of a financial institution and implement theoretical
knowledge into practical and realistic work environment.

Specific objectives: To obtain main objective, the other supportive objective need to
be attempted, which are –.

• To point out different aspects of Internet Banking system of JBL.

• To identify the risk related to internet banking of JBL.
• To analysis the status of Internet Banking of JBL.
• To identify the massive problem of internet banking and the problem of JBL
related to Internet Banking.

• To recommend some ways to improve the system.

Methodology of the Study

This study is mainly based on secondary data collected from several reliable sources
besides these some primary data was also collected from the branch I was appointed.

Sources of primary data:

• Face to face conversation

• Relevant file and records provided by the officers concerned
Sources of secondary data:

• Annual reports Janata Bank

• Related articles
• Books
• Other researches
• Bank website
• Publications etc.

A thorough research was carried out for a period of three months when we talked
with several bank bodies and finally this article is chalked. The investigation will
be helpful for the readers and researchers.
Flow Chart of the Study

Planning

THE APPROACH

-THE LITERATURE REVIEW

-THEORIETICAL CONSIDERATION

COMMUNICATING

Methodology

Primary Resources Secondary Resources

a) Official records of a) Annual report
Janata Bank b) Working papers
b) Face to face c) Office files
conversation d) Bank website

Collecting Information

Analyzing

Preparing the Report

Submission
Of the Report
Scope of the Study
The report gives the readers an idea of the financial condition of Janata Bank Ltd. It also
makes the reader aware of the operations of JBL and the internet banking service of the
bank. However, JBL provides very few internet banking services which is available on
their web site.

Limitations of the Study

I have faced some limitations, when I was preparing this report which is mentioned
below.

• Insufficiency of information;
• Lack of necessary co-operation of the officials due to maintain secrecy;
• Relatively new practice in Bangladesh;
• Lack of experience;
CHAPTER: TWO

ORGANIZATIONAL OVERVIEW

Historical Background

With the emergence of Bangladesh as an independent, sovereign state in 1971 after a

devastating nine-month war against the West Pakistani occupation army, a war, full of
blood and tears, trauma and pain of millions of our beloved ones, the legacy of
rebuilding the already broken financial base of the country was felt as an urgent call of
the day against a collapsed economic reality of a newly born state.

In this backdrop, in order to rebuild the country’s economy, measures had been taken
to merge a number of banks previously operated in this region and make new banks and
this initiative led to formation of Janata Bank in 1972 by combining the erstwhile United
Bank Limited and Union Bank Limited under the Banks Nationalization Order
(President’s Order No. 26) of 1972.In 15 November, 2007 Janata Bank got registered
with the Joint Stock of Registrars and restructured it as a public limited company with
the name Janata Bank Limited.
Including 4 overseas branches in United Arab Emirates Janata Bank runs its business
with 906 branches across the country having a big family of around 14,244 (As on
01.05.2015) employees with its head office located at Janata Bhaban at Motijheel C/A,
the heart of the capital city, Dhaka. At the end of 2014 the Bank held Deposit BDT
5,16,010 million, Advance BDT 3,19,773 million with Authorized capital BDT 30,000
million and Paid-up Capital BDT 19,140 million.

Janata Bank Limited, a corporate body trusted over the years, the 2nd largest (in respect
of Deposits/Assets) commercial bank in Bangladesh, has been playing pivotal role in
overall financial activities of the country and is possessing a long heritage of
discharging laudable services to the society since her embankment immediately after
the emergence of this verdant rich alluvial soil as a sovereign, independent state.
The contribution of the Bank to the national economy and social reform has set standard
bar so high that others in this business can’t help aspire touching the benchmark of
success earned by JBL. More so a matter of great honour is that the contribution,
commitment and success of the Bank have been recognized with a number of
prestigious awards by national and international organizations of repute.

Profile of JBL

Name of Company Janata Bank Limited

Chairman Luna Shamsuddoha

CEO & Managing Director Md. Abdus Salam Azad (F.F.)

Company Secretary Hussain Yeahyea Chowdhury

Legal Status Public Limited Company

Date of Incorporation 21 May 2007

Registered Office Janata Bhaban,110, Motijheel C/A, Dhaka-

1000, Bangladesh
Paid up Capital Tk. 19,140 Million

Face value per share Tk. 100 per share

Number of Divisional Office 14

Number of Area Office 49

Number of AD Branch 56

Number of Correspondence 1242

Number of Subsidiaries 3

Number of Employees 12,182 (As on 31.03.2018)

Number of Exchange House 72

E-mail md@janatabank-bd.com

Website www. janatabank-bd.com

Swift Code JANBBDDH

Figure: Profile of Janata Bank Limited.

Mission, Vision and Core Values of JBL

Mission:
Janata Bank Limited will be an effective commercial bank by maintaining a stable
growth strategy, delivering high quality financial products, providing excellent
customer service through an experienced management team and ensuring good
corporate governance in every step of banking network.

Vision:
To become the effective largest commercial bank in Bangladesh to support socio-
economic development of the country and to be a leading bank in south Asia.

Values:

Janata Bank Ltd follows eight basic core values. These core values work as basic
principles of JBL. The core values of JBL are-

• Commitment
• Quality
• Diversity
• Sustainability
• Professionalism
• Transparency
• Responsibility

• Accountability

Organogram of JBL
Janata Bank Ltd have the following organogram in the main structure of banking

Board of Directors
↓
Managing Directors (MD)
↓
Deputy Managing Directors (DMD)
↓
General Manager (GM)
↓
Deputy General Manager (DGM)
↓
Assistant General Manager (AGM)
↓
First Assistant General Manager (FAGM)
↓
Senior Executive Officer (SEO)
↓
Executive Officer (EO)
↓
Assistant Executive Officer (AEO)

Figure: Organogram of Janata Bank

Products and Services of JBL

JBL render both corporate and retail banking services with a strong focus on socio-
economic development of the country. The bank typically provides short term working
capital loan and limited long-term credit exposure. Moreover, JBL offers micro
enterprise and special credit as well as rural banking. Under corporate banking services
JBL provides trade finance, project finance, syndicate finance. On the other hand,
consumer loan, deposit scheme, remittance facilities are provided through retail
banking. In 2013, JBL launched its own innovation to remittance payment system at all
branches which facilitate Deposit/withdrawal from any branch in this system.

Deposits:

• Current & Call Deposits

• Savings Bank Deposits
• Monthly Scheme Deposits
• Term Deposits
• Special Notice Deposit

Loans & Advances:

• Agriculture Loan Programs

• Poverty Alleviation Program
• Specialized Loan Program
• Rural Credit
• Term Loan for Large and Medium Credit Programs
• Other Loans & Advances
• Loans for Thrust Sectors
• Export Oriented Industry Term/Project Financing
• Micro & Cottage industries loan
• Working Capital
• Export Financing
• Import Financing
• Trade Financing

Financial Services:

• Inland Remittance
 • Foreign Remittance
• Other Financial Services

Other Services:

• Internet Banking Services

• Utility Services
• Welfare Services
• Q-Cash (ATM) Services
• Others

Objective of JBL

The objectives for which the bank is established as follows:

 To carry on, transact, undertake and conduct the business of banking in all branches.
 Full implementation and utilization of the Bank’s excellence program which aims to
provide services to customers.
 To carry on business as financiers, promoters, capitalists, financial and monitory
Agents, concessionaires and brokers, dealing in exchange, securities and all kinds of
mercantile banking etc.
CHAPTER: THREE

FACTORS INFLUENCING THE ADOPTION OF INTERNET BANKING

SERVICES OF JANATA BANK LTD

Internet Banking and JBL

As a partner of the Government’s ‘Digital Bangladesh’ strategy, the bank has focused
on automation and internet banking activities. The following table projects the growth
of launching internet banking according to administrative divisions.

For performing internet banking, the bank has launched Real time Internet Banking
activities by the real time centralized internet Core Banking System (CBS) software
TEMENOS -24 (T24) in 132 branches in 2014. This facility was available in 17
branches only in 2013. Live operations in all native branches of the bank are conducted
using off-line systems. JB cheque payment and JB cash deposit system through cheque
have been developed in all inland branches by its own software.

Speedy foreign remittance system has been implemented in the national branch
network. In all 93 branches (each administrative district being equipped with at least
one such branch) are operating the payment system of electronic Government
procurement by which all types of tender fees are collected. Central Data Centre (CDC)
& Disaster Recovery Site (DRS) is going to be modernized and made more powerful
progressively. Apart from inland branches, four foreign branches are conducting
internet core banking activities. By using its own Banking Application Software
“JBSoft Banking”, the bank has saved BDT 33.20 million (approx.) on procurement
and BDT 1.30 million (approx.) per month on maintenance of the software.

Internet banking services of JBL

Janata Bank has introduced new services for those people who are not covered by
traditional banking services. Among these, there are services/products like internet
banking (JB Remittance Payment System) and real time internet core banking system.
Bangladesh Automated Clearing House (BACH), the first ever electronic clearing
house, with its components- Bangladesh Automated Cheque Processing System
(BACPS) and Bangladesh Electronic Fund Transfer Network (BEFTN); Society for
Worldwide Interbank Financial Telecommunication (SWIFT) etc.

JBL remittance payment system:

Ensuring a modern deposit/payment service through all branches in the country, JBL
has successfully launched an internet service named “On-line JB Remittance Payment
System” which is developed by the bank’s own IT specialists. This service has been
categorized under the following three modules:
1. JB Cheque Payment System
2. JB Cash Deposit System
3. JB Remittance Payment System
Besides, Internet banking (Real time) system has already been implemented in 174
branches by 2015.

BACH:
With an aim to make clearing activities automatic under Bangladesh Automated
Clearing House (BACH) automated clearing centre has been setup at Local office of
the bank. Clearing activities in automated system are being executed through
Bangladesh Automated Cheque Processing System (BACPS) from this centre.

BEFTN:
Fund transfer activities from all branches of the bank with all other banks are being
operated through Bangladesh Electronic Fund Transfer Network (BEFTN).

ATM Service:
By adopting the latest technology and under the largest network comprised of 34 banks,
of which 32 banks (including Janata Bank Limited) as members and 2 other banks as
network sharing members, JBL is providing ATM facilities with debit and credit card
to the customers. Cardholders of the bank have access to more than 4100 ATMs,
including 15 of its own and have the privilege to use more than 5,000 point of sales
(POS). Considering customer service expansion along with promoting goodwill of the
bank, projects have been undertaken to increase the number of ATMs. In 2014, the
number of debit and credit cardholders was 1761 and 632 respectively. The table below
shows the increase of number of both debit and credit card holders.

CDMS:
As core deposit is the low-cost deposit and nucleus of the financial base of any bank,
JBL aims to strengthen core deposit procurement activities for which a web-based
software ‘Core Deposit Monitoring System’ (CDMS) has been crafted. Through this
system, branches are being made to input their data on core deposit on the month ending
working day. This system has enabled instant monitoring of core deposit collection of
all branches, area and divisional offices and all departments of head office as well.

Personnel Management Information System (PMIS):

Janata bank Limited has introduced a Web-based and Real Time Personnel
Management Information System (PMIS) which contains all the basic and necessary
information of employees. All HR related functions are executed through some specific
built-in modules using the database of PMIS. All the dignitaries and employees of JBL
are able to view over fifty Real Time reports about the employees and organizational
structure of the bank by registering with General Module of the PMIS system.

Management Information System (MIS):

For the purpose of automation and removal of the shortcomings of manual generation
of reports and regular monitoring of the business activities, a web-based application
software programme termed as OMIS, has been crafted. OMIS does the following:

1. Reports both in detail and summary, missing and completed list, comparison
and graph as well as different monitoring reports of any branch/area office/divisional
office as well as of whole bank are prepared;

2. Helps decision taking through generating transparency and accountability of

information;

3. Repetition of reporting is reduced thus saving working hours;

4. All necessary statements are produced through open query system.

Website:
As a state-owned bank, JBL is the first to introduce website with domain named
www.janatabank-bd.com at the end of the year 2000. The website is always kept
updated with important information/circulars, tender, auction and employment related
information. The bank has introduced a web-based mailing system by which all
departments of the head office, divisional, area offices and branches are enjoying e-mail
facilities. Recruitment procedure of the bank and activities related to collection of
university admission fees are executed through this website. For performing internet
banking, the bank has launched Real

Most Lucrative Services of JBL

Electronic Money (E-Money): Electronic money (also known as e-currency, e-money,

electronic cash, electronic currency, digital money, digital cash or digital currency)
refers to money or scrip which is only exchanged electronically. Typically, this involves
the use of computer networks, the internet and digital stored value systems. Electronic
Funds Transfer (EFT) and direct deposit are all examples of electronic money. Also, it
is a collective term for financial cryptography and technologies enabling it.

Credit Cards: Credit Card can be called as an equivalent of a loan sanctioned by the
bank to its customers. Credit card facilitates and makes it possible to “Use First and Pay
Later” the specified amount of credit as per the agreed terms of sanction. This card
facilitates the cardholder to purchase goods and services from the merchant
establishments and shops through the collaborating credit card companies like VISA,
MasterCard, Maestro, and Cirrus.

Debit Cards: A Debit Card provides for internet electronic payment like Credit Card
but from savings or current accounts of the cardholder for purchases. This card is a
deposit access product where cardholder uses his own money in his bank account
through the debit card on the principle of “Pay First and Use Later”. Debit card contains
the symbol or hologram of collaborating company such as VISA, MasterCard, Maestro
and Cirrus etc.
ATM Cards: ATM Card can be used to withdraw money, deposit money, balance
enquires, deposit bills in the account. The cardholder must maintain a savings bank
account or current account with the bank. On issuance of card, the cardholder is
intimated a four-digit secret Personal Identification Number (PIN). The cardholder is
always required to maintain safely the PIN to prevent fraudulent activity.

Automated Teller Machines (ATM): Full elaboration of ATM is “Automated Teller

Machine” which acts like a teller point in bank who takes and gives money over the
counter. ATM is same as teller point but it run automatically through identity like card
and password. It does not need any slip or Cheque but it is very much based on A/C
holder’s ATM card and it’s Password. Those who are entitled for ATM card, bank has
provided them a password against every single card. This is like a debit card. People
can deposit their money in a bank account and they have entitled withdraw their money
through ATM card, which is applicable for 24 hours a day and 365 days in a year.

Point of Sales: Point of sale (POS) or checkout is the location where a transaction
occurs. A "checkout" refers to a POS terminal or more generally to the hardware and
software used for checkouts, the equivalent of an electronic cash register. A POS
terminal manages the selling process by a salesperson accessible interface. The same
system allows the creation and printing of the voucher.
Functional services of JBL

In true sense internet banking is still absent in Bangladesh. Banks are providing banking
services via internet that includes-

(1) Account Summary

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

(2) Account Details

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

(3) Account Activities

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

(4) Electronic Fund Transfer

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

(5) 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).

(6) 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.
(7) Loan Repayments

The customer can make payment of the loan instalment from his CASA account.

(8) Statement Request

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

(9) Cheque Book Request

The customer can make a request for a Cheque book.

(10) Cheque Status Inquiry

The customer can choose an account and enter the Cheque no for which the status should
be viewed.

(11) Stop Payment Cheque

The customer can mark his Cheque leaf as stop payment.

(12) Interest Rate Inquiry

The customer can query on the interest rates on CASA & Term Deposit Products.

(13) Foreign Exchange Rate Inquiry

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

(14) Refill Pre-Paid Card

The customer can buy a refill number for his pre-paid mobile phone or ISP link.

(15) Change Password

The customer can change his Internet Banking Password using this function.

(16) Letter of Credit

The customer can initiate the LC application through Internet Banking.

(17) Bank Guarantee

The customer can initiate the Bank Guarantee through Internet Banking.

(18) Limits Query

The customer can view his Loan Limits and Limits Utilization through Internet

Banking.

Internet Banking Security of JBL

To keep security of customer JBL and all banks follow the curricular, as like it’s one of
the biggest attractions of Internet as an electronic medium is its openness and Freedom.
It is a public domain and there is no restriction on who can use it as long as one adheres
to its technical parameters. This has also given rise to concerns over the Security of data
and information transfer and privacy. These concerns are common to any network
including closed user group networks. It will be sufficient to say here that the key
components of such concern are,
 Authentication, viz., assurance of identity of the person in deal,
 Authorization, viz., a party doing a transaction is authorized to do so,
 The privacy or confidentiality of data, information relating to any deal,
 Data integrity, viz., assurance that the data has not been altered and,
 Non-repudiation, viz., a party to the deal cannot deny that it Originated the
communication or database.

Types of risks associated in Internet banking of JBL

A major driving force behind the rapid spread of internet banking all over the world is
its acceptance as an extremely cost-effective delivery channel of banking services as
compared to other existing channels and its applying same condition in Bangladesh.
However, Internet is not an unmixed blessing to the banking sector. Along with
reduction in cost of transactions, it has also brought about a new orientation to risks and
even new forms of risks to which banks conducting o-banking expose themselves.
Regulators and supervisors all over the world are concerned that while banks should
remain efficient and cost effective, they must be conscious of different types of risks
this form of banking entails and have systems in place to manage the same. An
important and distinctive feature is that technology plays a significant part both as
source and tool for control of risks. Because of rapid changes in information technology,
there is no finality either in the types of risks or their control measures. Both evolve
continuously. The thrust of regulatory action in risk control has been to identify risks in
broad terms and to ensure that banks have minimum systems in place to address the
same and that such systems are reviewed on a continuous basis in keeping with changes
in technology. In the following paragraphs a generic set of risks are discussed as the
basis for formulating general risk control guidelines, which this Group will address.

(1) Operational risk:

Operational risk, also referred to as transactional risk is the most common form of risk
associated with I-banking. It takes the form of inaccurate processing of transactions,
no enforceability of contracts, compromises in data integrity, data privacy and
confidentiality, unauthorized access / intrusion to bank’s systems and transactions etc.
Such risks can arise out of weaknesses in design, implementation and monitoring of
banks’ information system.
Besides inadequacies in technology, human factors like negligence by customers and
employees, fraudulent activity of employees and crackers / hackers etc. can become
potential source of operational risk. Often there is thin line of difference between
operational risk and security risk and both terminologies are used interchangeably.

(2) Security risk:

Internet is a public network of computers which facilitates flow of data / information

and to which there is unrestricted access. Banks using this medium for financial
transactions must, therefore, have proper technology and systems in place to build a
secured environment for such transactions. Security risk arises on account of
unauthorized access to a bank’s critical information stores like accounting system, risk
management system, portfolio management system, etc. A breach of security could
result in direct financial loss to the bank. For example, hackers operating via the Internet
could access, retrieve and use confidential customer information and also can implant
virus. This may result in loss of data, theft of or tampering with customer information,
disabling of a significant portion of bank’s internal computer system thus denying
service, cost of repairing these etc. Other related risks are loss of reputation, infringing
customers’ privacy and its legal implications etc. Thus, access control is of paramount
importance. Controlling access to banks’ system has become more complex in the
Internet environment which is a public domain and attempts at unauthorized access
could emanate from any source and from anywhere in the world with or without
criminal intent. Attackers could be hackers, unscrupulous vendors, disgruntled
employees or even pure thrill seekers. Also, in a networked environment the security is
limited to its weakest link. It is therefore, necessary that banks critically assess all
interrelated systems and have access control measures in place in each of them.

In addition to external attacks banks are exposed to security risk from internal sources
e.g. employee fraud. Employees being familiar with different systems and their
weaknesses become potential security threats in a loosely controlled environment. They
can manage to acquire the authentication data in order to access the customer accounts
causing losses to the bank.

Unless specifically protected, all data / information transfer over the Internet can be
monitored or read by unauthorized persons. There are programs such as ‘sniffers’ which
can be set up at web servers or other critical locations to collect data like account
numbers, passwords, account and credit card numbers. Data privacy and confidentiality
issues are relevant even when data is not being transferred over the net.

Data residing in web servers or even banks’ internal systems are susceptible to
Corruption if not properly isolated through firewalls from Internet.

The risk of data alteration, intentionally or unintentionally, but unauthorized is real in a

networked environment, both when data is being transmitted or stored. Proper access
control and technological tools to ensure data integrity is of utmost importance to banks.
Another important aspect is whether the systems are in place to quickly detect any such
alteration and set the alert.
Identity of the person making a request for a service or a transaction as a customer is
crucial to legal validity of a transaction and is a source of risk to a bank. A computer
connected to Internet is identified by its IP (Internet Protocol) address. There are
methods available to masquerade one computer as another, commonly known as ‘IP
Spoofing’. Likewise, user identity can be misrepresented. Hence, authentication control
is an essential security step in any e-banking system
(3) Money laundering risk

As Internet banking transactions are conducted remotely banks may find it difficult to
apply traditional method for detecting and preventing undesirable criminal activities.
Application of money laundering rules may also be inappropriate for some forms of
electronic payments.
Thus, banks expose themselves to the money laundering risk. This may result in legal
sanctions for non-compliance with “know your customer” laws. To avoid this, banks
need to design proper customer identification and screening techniques, develop audit
trails, and conduct periodic compliance reviews, frame policies and procedures to spot
and report suspicious activities in Internet transactions

(4) Liquidity Risk

Arises out of a bank’s inability to meet its obligations when they become due without
incurring unacceptable losses, even though the bank may ultimately be able to meet its
obligations. It is important for a bank engaged in electronic money transfer activities
that it ensures that funds are adequate to cover redemption and settlement demands at
any particular time. Failure to do so, besides exposing the bank to liquidity risk, may
even give rise to legal action and reputational risk.

(5) Credit risk

Is the risk that a counter party will not settle an obligation for full value, either when
due or at any time thereafter. Banks may not be able to properly evaluate. The credit
worthiness of the customer while extending credit through remote banking procedures,
which could enhance the credit risk. Presently, banks generally deal with more familiar
customer base. Facility of electronic bill payment in Internet banking may cause credit
risk if a third-party intermediary fails to carry out its obligations with respect to
payment. Proper evaluation of the creditworthiness of a customer and audit of lending
process are a must to avoid such risk.

Internet Banking Problems of JBL

 Lack of infrastructure: In JBL banking systems, IT and infrastructure

are not as well so good and developed. JBL has no digital database system and
service is also underlined. Because of this, customers will not get right service
and maintenance to their account service with securely.
 Unavailability of ATM Booth: There is scarcity of ATM booth in all
places. It creates high dissatisfaction in customer mind.
 Shortage of fund in ATM Booth: Most people complain that there is
low money reserve in ATM Booth sometimes they find empty.
 High service charge: Online Banking charge is too high and it is still
out of reach among the middle class and lower-class family.
 Technological problem: There are some technological problem such as
show empty of own account money, PIN code rejection, Database cannot be
support in the system etc.
 Shortage of Branch: Branches are not available so especially business
people face problems.
 Securities problem: Some people cannot rely on online banking. They
feel less security on online Banking.
 User of online banking: Number of user are low rather than other bank
user on online banking
 Limited Areas: This bank provide online banking service in some
specific areas.
 Training and Development: Employees are not well trained in online
banking.
 Lack of knowledge of use: For carrying out Internet banking properly,
a basic knowledge of computers and the Internet is required, which limits the
number of people willing to avail this facility. Many people, who are not
comfortable with computers and the Internet, often find it difficult to use
Internet banking. Therefore, for beginners, Internet banking is really time-
consuming. In addition to this, people also find a difficulty in trusting a
completely mechanized system like Internet banking, in case of financial
matters. In many instances, a simple mistake, like clicking a wrong button, may
create a big problem. And so, many individuals often keep wondering if they
have properly executed the transaction. But JBL has no training and
development opportunity for the customers to take better service.

 Problem of integration: Problems are also listed in the availability of

system integration in the process. Incompatibility between e banking
applications and legacy systems means that most banks require middle wear to
integrate these systems. System integrations has been and is still, to some extant
a key barrier in e banking. Shortcomings the technologist infrastructure is often
the biggest problem and also here include integrations of system.

 Negative customer perception: Another big problem is that most of the

customers feel unsecured to make their transaction because when they make
transactions this report also go to the internet service provider and this will
hamper their secrecy and as perspective of Bangladesh our banking system have
no individual service protocol.

 Small number of services: Actually, internet banking service of JBL is

not so aborigine. They are now just providing services of bank transfer, balance
check, make payment and especially fund disbursement is not possible now
here. These are the simple functions they are now performing. Also, they are not
using http server to secure this service and they haven’t yet provide customer
training for getting the services clearly and easily.
CHAPTER: FOUR

FINDINGS AND ANALYSIS

Empirical Analysis

With the advances in technology, many banks have taken the adequate measures to ward
off any problems related to the security of Internet banking. Customers can also follow
some simple precautionary measures, like not disclosing the password and pin number
to anyone, changing the password at regular intervals and installing antivirus software
to ensure security and safety of their Internet banking transactions. Internet banking
tutorials are also provided by many banks to help familiarize people with Internet
banking. So, you can avail this facility to use Internet effectively, for making your day-
to-day financial transactions. To analysis we can some tools of analysis, these are as
follows.

SWOT Analysis

To find out the rationality of a product we must perform a swat analysis of this product
and services. This wills analysis the strength, weakness, opportunity and threats of the
particular services or product. To analysis the performance of internet banking of JBL
we the following analysis is considered.

Strength

 JBL has made consortium with other banks through Q-cash and provided
a combined ATM service. Therefore, customers are able to use the ATM of other
banks made consortium with JBL.
  Real time online banking and use of OMIS as ERP brought a new
dimension in the field of internet banking of JBL.

 A well-constructed website with necessary information attracts

customers to get involved with JBL.

 Low operational cost to provide banking service.

Weakness

 Small number of ATM available by the bank of its own.

 Lack of services available by JBL.
 Lack of skilled manpower in this field of banking.

Opportunities

 Number of the user of internet banking is increasing day by day.

 Technologies and expertise are increasing in the ICT sector.
 Cost of internet is reducing as a result of technological development.
 Government is making rules and regulations and necessary security steps
to reduce security threats.

Threats

 Recent criminal attacks on ATM reduce the reliability of the customers.

 The hackers are also threat to the internet banking. Where the internet
banking password and information are not secured the security of money is
at risk.
Cost volume profit analysis

The main benefits of internet banking is the amount of time thus money it saves.
Although internet banking is restricted to managing account and making internet
transactions, it cuts out much of the needs to personal visit to bank. Using internet
banking will also increase the efficiency of paying money bills, debt and wages as it
reduces the need for writing and sending cheque. where it can take five days to take
clear. Wages and salary payments are also easy with this. Internet banking is able to
offers customers higher interest rates than high street banks due to their reduced
overhead. Though internet banking of JBL has taken an investment of more money but
now operating expense will be much lower. Again, also customers will be satisfied
through fast, accurate, east to use, and comprehensive delivery of services.

Findings

• Last couple of years JBL has increasing their services security and
clarity and they are also emphasizing on internet banking with consisting
situations of banking world and are also enforcing comprehensive applications
of it.

• The bank expert has determining that this sector will take by 100 percent
customers who will play a vital role in banking growth and as well as financial
sector.

• As giving emphasize from Bangladesh bank it will develop easily. As a

forecasting result BB has already develop automated clearing house.
• Already bank authority are also taking initiatives to train up their
employee to provide the better service .IT is also now over viewing that
customer efficiency and satisfactions are also increasing gradually.

• Several training programs had been initiated to make the employees

capable to serve the internet banking need of the customers of JBL.

• People are being more interested in this modern digital banking system
as the rate of internet user is increasing.
CHAPTER: FIVE

RECOMMENDATIONS AND CONCLUSION

Recommendation

We know that Janata Bank limited is one of the famous commercial banks in
Bangladesh. They have been providing good online services which are given
satisfaction and interest for its clients/customers. They gave their clients electronic
fund transfer facilities, ATM, Debit card, credit card, POS, bill pay facilities in online
etc. But they have also some lacking in online banking process. For removing lacking,
they should take following steps in the online banking system-

 Increase ATM booth: Spread ATM booth all over the country in
important place.

 Increase booth cash fund: All time update booth case fund.

 Rises Credit card acceptance in all places.

 Increase customer awareness about online banking of Janata bank.

 Resolve technological problem by using latest technology.

 Making online banking facilities more easy and suitable for all classes
of people.

 Making Service charge of online banking as low as possible.

 Provide proper training about online banking to the employees.

 Training and awareness among employees: It is recommended that

Janata Bank of Bangladesh should conduct various training programs for the
employees, so that they will get aware with the terms of internet banking. After
such programs they can create awareness amongst the consumers.
 Exchange of information on threats and vulnerabilities at
appropriate forums: There should be an open-end discussion on the threats
and vulnerabilities coming across the functioning of internet banking work by
the employees in the various official forums and meets.

 Build an optimal operating model by understanding which activities

to retain collaborate and outsource: There should be clear sight of operations
which needs to outsource to other companies, this will lead to ease in work for
employees.

 Bank should Create and sustain customer, investor and regulator

confidence by adopting international accounting standards: Adopting
international standards adds some more star to the glory of any company, JBL
should impose such standards when it comes to internet banking or virtual
banking, this will enhance the goodwill of JBL among regulator, customers and
invertors.

 Bank should anticipate and get prepared for regulatory changes:

Laws regarding IT or cyber laws get change as per the need. JBL should
anticipate such kind of changes and get loaded with various plans and actions.

 Focus on identifying core competence: JBL possess some unique

characteristics or positive points in it and with the help of them it can become a
leader in market. Bank should identify such points and concentrate to flourish
them more. This can be done with the help of internet banking, as internet
banking of JBL is getting largely accepted by customers.

 Increasing usage of mobile phones is going to revolutionize the

banking culture in near future: Mobile banking is also getting popular in the
segment of internet banking thus this can add some more steps to progress for
JBL. Bank is into the mobile banking but it is providing limited features.
  More stress should be given on security concern on internet: There
are some people who are into unethical practices of hacking of accounts of
customers. This is nothing but the breach in the security of the JBL on internet.
There should be some measures in order to prevent such practices. IT structure
should be unbreakable.

Conclusion

As globally enhancing of information technology used also Bangladesh is maintaining

the serial, here Janata bank is playing a great roll with performing internet as well as
internet banking and they have taken a good position in internet banking. This it’s
containing a great beneficiary to the people but there have something which will be
cause of hemp economy and customers privacy. For that reason, Janata bank should
take many initiatives to contain free from these risks. Internet banking is making
business so much easier that any time fast I think so. They have to emphasize into
internet banking because it will take low operating cost for both customers and bank as
well it will increase profitability if bank. With following the better service structure
internet banking will reach door to door to customers and will make customer’s life
easy to easier.

Study states that internet banking provides greater reach to customers. Feedback can be
obtained easily as internet is virtual in nature. Customer loyalty can be gained. Personal
attention can be given by bank to customer also quality service can be served.

Bank should know that no system is perfect, however a system of such a type will need
to be very secure. This is a system which holds account details and customers wealth.
If such a system was not trusted and not reliable, then JBL would face serious laws and
would lose business.

After studying the SWOT analysis, we came to know various strengths of JBL such as
quality customer service, customer loyalty, easy access to information, 24 hours access,
easy online applications etc. JBL should put efforts to multiply the number of strengths.
In terms of weakness I come to know some of the major weaknesses they are lack of
awareness of internet banking among the customers, obsolesce of technology related to
security, complicated procedures of availing internet banking facilities, lack of
knowledge among the employees of JBL. JBL should concentrate on the weaknesses
and reduce them to zero.

In the third segment of SWOT analysis of internet banking we dealt with opportunities
like 95 % market of internet market is untapped, JBL’s path to become first virtual bank.
By encasing such opportunities bank can become the leader in banking sector of
Bangladesh. In the last segment I come to know about various challenges which are in
front of JBL, like sameness in IT infrastructure within various banks, need of various
vendor supports for complex technology, maintaining secured IT infrastructure,
alternative mechanism in case of failure of present security system.

The company can take the advantage of the reputation it has created in the market for
itself and become more competitive

The recommendations and suggestions given, if adopted will improve the position of
the company substantially and optimal profitability coupled with better service and
satisfactions for investors may be achieved.
References

Annual report of Janata Bank Limited (2011-2015).

Humphrey, Albert (2005), "SWOT Analysis for Management Consulting", SRI Alumni
Newsletter (SRI International).

Nwankwo G.O. (2001), Bank Management Principles and Practice, UK: Malthouse
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International (P) Ltd., 2nd Edition.

Shirshendu Ganguli, Sanjit Kumar Roy, (2011),"Generic technology-based service quality

dimensions in banking: Impact on customer satisfaction and loyalty", International Journal of
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