Interview with Mr.

Anisur Rahman, Chief Computer department, Islami Bank

In case of a Branch where everything is done manually, (the calculation is for a branch
with 50,000 accounts)

Space Requirement (Manual):

For 200 Account-holders = 1 ledger book (is required)

So, for 50,000 Account-holders = 250 ledger book (is required)

Again, For 5 ledger, a table (8ft* 4) is to be maintained in order to keep the huge books.
Besides, at least 2 feet space is to be kept in front of each table to provide the movement
of people. Thus, the calculation would be,

For 5 ledgers = 1 ledger table = 8ft * (4+2) = 48ft = 50 ft (roughly)

So, for 250 ledgers = 50 tables = 50ft * 50ft = 2500 sq.ft.

Cost of renting 2500sq.ft = (2500 * 20 * 12) = Tk. 600,000

(in the immediately above calculation, 20 is the rental charge per square feet area, 12 =
122 months in a year.)

Manpower Requirement (Manual):

For 10 ledger = 1 ledger keeper (1 official)
So, for 250 ledgers = 25 ledger keeper = 25+2 = 27 (for leave/vacancy 1 official per 11
officials)

Again, for 2 ledger-keeper = 1 supervisory official

For 25 ledger-keeper = 13 supervisory officials = 14 supervisory officials (for
leave/vacancy 1 official per 11 officials)

Thus, the total manpower requirement = 27 + 14 = 41

Cost of Keeping the huge manpower (per year) = 41 * 5000 * 12 = Tk. 2,460,000

Space Requirement (Computerized):

For handling 50,000 accounts, 5 computers are enough and the space requirement for the
purpose is only 200sq.ft.
So, Cost of renting the space = 200 * 20 * 12 = Tk.48,000

Manpower Requirement (Computerized):

Only 5 officials to operate the 5 terminals.

So, Cost of keeping the officials = 5 * 5000 * 12 =Tk.300,000
Thus, Cost Saving from Computerizing the Branches:

From Space requirement = Tk. (600,000 – 48,000) = Tk.552,000

From Manpower Requirement = Tk. (2,460,000 – 300,000) = Tk.2,160000.

Other Benefits from computerization:

1. Balancing at the end of each month
2. Pass book updates/statement
3. Much less transaction time
4. No extra space is required to accommodate the queue.
5. No room is required to keep the ledger books
6. Customer satisfaction as well as attraction of customer.

Savings If Converted to WAN from LAN:

The calculation is made for 110 branches of any bank.

If there is LAN in every branch of the Bank, a Network (LAN) administrator is to be kept
for each branch. And the monthly salary of each Network Administrator is Tk. 20,000 (at
least). At the same time, a database administrator must be maintained for each branch.
The monthly salary of the database administrator is also Tk. 20,000 (at least).

So, the cost of keeping the manpower related to LAN in 110 branches (per year):

For 110 Network Administrator = 110 * 20,000 * 12 = Tk.26,400,000

For 110 database Administrator = 110 * 20,000 * 12 = Tk.26,400,000
Again, 15 reconciliation officials must be kept at the head office to order to maintain the
re-conciliation between the branches. The salary of each such official is Tk.10,000 (at
least). But if WAN is established, no such official is to be maintained.
Cost of keeping the Reconciliation officials = 15 * 10,000 * 12 = Tk.1,800,000

Total Cost = 26,400,000 + 26,400,000 + 1,800,000 = Tk.54,600,000

If WAN is established, only 6 people (3 network administrator and 3 database
administrator) are required to manage the whole thing.
So, in case of WAN the cost of manpower related to Network management:
For 3 Network Administrator = 3 * 20000* 12 = Tk.720,000
For 3 Database Administrator = 3 * 20000* 12 = Tk.720,000

Total Cost = 720,000 + 720,000 = Tk.1,440,000

Therefore, Total Cost Saving = Tk. (54,600,000 – 1,440,000) = Tk.53,160,000

Future Cost Saving:
If WAN is established, no recruitment is necessary for about a year whereas in each year
at least two persons are recruited to tackle the pressure.

So, the cost saving: 110 * 5000 * 2 * 12 = Tk.13,200,000