PROJRCT REPORT

ON
“ONLINE BANKING: A STUDY ON SONALI BANK LIMITED”

Submitted To

Controller of Examinations
National University, Gazipur

Supervised By

Humayun Ahmed
Assistant Professor

Submitted By
Md Aminul Islam Akash
Registration no: 16501002257
ID: 2081492
Session: 2016-2017
Major: Finance
BBA Program (professional)

Department of business Administration

Shaikh Burhanuddin Post Graduate College
 Date of Submission: November 20, 2022

LETTER OF TRANSMITTAL
20 November, 2022
Controller of Examinations

National University

Gazipur- 1704

Subject: Submission of Project Report on “Online Banking: A Study on Sonali

Bank Limited”.

Dear Sir,

This is a great pleasure for me to submit this project report on “Online Banking: A Study
on Sonali Bank Limited”. This program provided the scope and gave the opportunity to
learn new different concepts regarding Online Banking. This is for me to meet the
prerequisite for the potential fulfillment of the degree Bachelor of Business
Administration. In this report I tried to illustrate “Online Banking: A Study on Sonali
Bank Limited”. I have aimed to represent whatever I found and observed in the annual
report and internet.

I am really indebted to you for your suggestion and recommendations. I will feel glad if
you please render your valuable comments and observations.

Your sincerely,

____________
Md Aminul Islam Akash
Registration Number: 16501002257
Roll Number: 2081492
Session: 2016-2017
Major: Finance
BBA Program (Professional)
Shaikh Burhanuddin Post Graduate College

Supervisor’s Certificate

This is to certify that the Project “Online Banking: A Study on Sonali Bank Limited” is
done by Md Aminul Islam Akash , Reg. No: 16501002257 as a partial fulfillment of the
requirement of Bachelor of Business Administration (BBA), major in Finance degree
from Shaikh Burhanuddin post graduate college under National University.

The report has been prepared under my guidance and is carried out successfully.

______________________
Humayun Ahmed
Assistant Professor
Department of business Administration
Shaikh Burhanuddin post graduate college
Date: November 20, 2022
 Acknowledgement

To prepare this report a significant number of document and information inputs from
several sources were involved. I would like to take this chance to convey my sincere
gratitude to those without whose blessings and co-operation this report would not have
been possible. At the very outset I would like to pay my gratitude to almighty Allah for
keeping me well and to successfully complete this report. Then my grateful appreciation
goes to Sonali Bank Limited authority for rendering me their expertise, knowledge.

I would like to give my heartiest gratitude to Humayun Ahmed, Assistant Professor,

Department of Business Administration, Shaikh Burhanuddin Post Graduate College. I
also gratefully acknowledge Humayun Ahmed for outline and finalizing the whole report.

I would also like to thank my seniors, my family members and friends for their generous
co-operation and valuable suggestion in preparing this report.
EXECUTIVE SUMMARY

This report is a partial requirement for the Bachelor of Business Administration Program.
The prime objective of the bank report is to conduct an analysis ONLINE BANKING of
Sonali Bank Limited. The report attempts to analyze the online financial performance of
Sonali Bank Limited. It has been one of the leading public commercial banks in
Bangladesh. Online Banking is an important sector of banking activities. The report
contained introduction, organization overview, analysis and evaluation, Findings,
Recommendation and Conclusion.

In the first part Origin, objective, methodology, scope, limitations, of the report about
Sonali Bank Limited is presented. This report is prepared partial fulfillment of BBA
program. The objective of the report is to determine the ONLINE BANKING of Sonali
Bank Limited.

The second part is about bank overview of Sonali Banking Limited, background of the
bank, broad of director, vision of SBL, mission of SBL, slogan of SBL, management
structure of SBL, products and services etc.

The third part contains analysis of the report which is the main part of this report.

The fourth part Findings, Recommendations and Conclusion of the study which mainly
obtained from the study of evaluating. I think the recommendation will help to enhance
Sonali Bank Limited Performance.
 Title Page No:

Letter of Transmittal i

Supervisor’s Certificate ii

Acknowledgement iii

Executive Summary iv

Chapter-1 Introduction

1.1 Origin of Report:

1.2 Objective of the Report

1.3 Methodology of the Report

1.4 Scope of the Report

1.5 Limitations of the Study

Chapter-2 Overview of the Organization

2.1 Literature Review

2.2 History of Sonali Bank Limited

2.3 Mission of SBL

2.4 Vision of SBL

2.5 Slogan of SBL

2.6 Corporate Profile

2.7 Some Notable Features of the Bank

2.8 Hierarchy of Sonali Bank Limited

2.9

2.10

2.11

Table of Contents
Short forms Acronyms Elaborations

SBL Sonali Bank Limited

 AD Authorized Dealer

SDS Sonali Deposit Scheme

CC Cash Credit/Consumer Credit

CIB Credit Information Bureau

CBB Commercial Bank of Bangladesh

DMD Deputy Managing Dirctor

FDR Fixed Deposit Ratio

FIS First Information

GM General Manager

L/C Letter of Credit

MDS Medicare Deposit Scheme

MD Managing Director

OD Over Draft

CBS Core Banking Software

List of Acronyms

1.1 Origin of Report:

The BBA program is designed to focus on theoretical and professional development of
the student to take up business as a profession as well as service as a career. It is desigbed
with an excellent combination of theoretical and practical aspects. In this connection, I
am a student of BBA in the department of Business Administration of Shaikh
Burhanuddin Post Graduate College. I was assigned to prepare a project report under the
guidance of supervising teacher on a selected subject matter to highlight my analysis on
the subject matter have tried my level best to present my knowledge and information in
this report.

1.2 Objective of the Report:

The general objective of this report is to prepare a project report based on customer
perception on online service and assessing the online Banking performance of Sonali
Bank Limited.

The specific objective of this report are as follows:

1. To evaluate Online banking system of Sonali Bank Limited.

2. To find out the customer demand from Sonali bank’s Online Banking service.
3. To identify the relationship between Online Banking and customer
satisfaction.
4. To find out the problems and give some necessary suggestions.
5. to recommend few solutions to overcome this problem.
1.3 Methodology of the Report:

The study requires a systematic procedure from selection of the topic to preparation of
the final report. to performed study, the data sources are identified, collected, classified.
The overall process of methodology has been given below:

Secondary Sources of Data

Secondary data was collected from various web site, previous work on Sonali bank.

1. Official site of the Sonali Bank Limited.

 2. Annual report of Sonali Bank Limited.
1.4 Scope of the Report:

This report especially emphasizes on the online Banking service of Sonali Bank. This
report show the overview of online Banking of Sonali Bank. It shows the current
position of online service if this bank.

I have tried to analysis and evaluate online Banking performance based on adequate
information contained in documents.

1.5 Limitations of the Study:

Any research works needs high degree of involvement regarding collection of

information, creation of database, and analysis of data. While doing so many limitations
arise even though we always put our best effort to avoid them. In conducting the present
study, the following limitation has been faced:

1. Less time to complete report.

2. Unavailability of information.
3. Personal barriers like inability to under some official terms, documents etc.
4. Dependency in internet largely.
5. Due to time limitations large scale research is not possible.

2.1 Literature Review:

Online Banking is the fastest growing service that banks can offer in order to gain and
retain new customers (Moody, 2002).

The rise of Online Banking is also due to its number of benefits for both the provider
and the customer as well. From the bank’s perspective these are mainly related to cost
savings (Sathye, 1999; Robinson, 2000) and Online Banking remains one of the
cheapest and more efficient delivery channels (see Pikkarainen et al., 2004).

Arunachalam and Sivasubramanian (2007) content that Internet banking is where

customer can access his or her bank account via the Internet using PC or mobile phone
and web-browser.

Ongkasuwan and Tantichattanon (2002) defined Internet banking service as banking

service that allows customers to access and perform financial transactions on their
bank accounts from their Computers with Internet connection.

On-line, real-timOnline Banking services have now become a birth right of the
customer as the customer demands the flexibility of operating an account in any branch
of a bank irrespective of which branch the account was domiciled (Bank Away, 2001).

E-service quality can be explained as an overall customer evaluation about e-service

delivery in the marketplace which is virtual Santos, J. (2003).

Customer Requirement
Customer requirement means the utilities from a products and services wanted by
customer before adopting any product or service (P.Kotler)

Customer Satisfaction

A satisfied customer will repeat the purchase of the product and convey positive
messages about it to others (Dispensa, 1997; Metawa and Almossawi, 1998).
The complex nature of services coupled with the growing province of the service
sector has increased the need for better customer satisfaction. Banking and financial
services are an important part of the service industry (Mishkin, 2001).

Customer satisfaction is typically defined as a post consumption evaluative judgement

concerning a specific product or service (Gunderson, Heide and Olsson, 1996. The
most widely accepted conceptualization of the customer satisfaction concept is the
expectancy disconfirmation theory (McQuitty, Finn and Wiley, 2000).

According to Saha and Zhao (2005), customer satisfaction is defined as a collection of

outcome of perception, evaluation and psychological reactions to the consumption
experience with a product/service.

In other words, Saha and Zhao further defined customer satisfaction as a result of a
cognitive and affective evaluation where some comparison standard is compared to the
actually perceived performance. If the performance perceived is less than expected,
customers will be dissatisfied. On the other hand, if the perceived performance exceeds
expectations, customer will be satisfied.

2.2 History of Sonali Bank Limited:

Soon after independence of the country Sonali Bank emerged as the largest and leading
Nationalized Commercial Bank by proclamation of the Banks' Nationalization Order
1972 (Presidential Order-26) liquidating the then National Bank of Pakistan, Premier
Bank and Bank of Bhwalpur. As a fully state owned institution, the bank had been
discharging its nation building responsibilities by undertaking government entrusted
different socio-economic schemes as well as money market activities of its own
volition, covering all spheres of the economy. The bank has been converted to a Public
Limited Company with 100% ownership of the government and started functioning as
Sonali Bank Limited from November 15 2007 taking over all assets, liabilities and
business of Sonali Bank. After corporatization, the management of the bank has been
given required autonomy to make the bank competitive & to run its business
effectively. Sonali Bank Limited is governed by a Board of Directors consisting of
11(Eleven) members. The Bank is headed by the Chief Executive Officer & Managing
Director, who is a well-known Banker and a reputed professional. The corporate head
quarter of the bank is located at Motijheel, Dhaka, Bangladesh, the main commercial
center of the capital.

2.3 Mission of SBL:

Dedicated to extend a whole range of quality products that support divergent needs
of people aiming at enriching their lives, creating value for the stakeholders and
contributing towards socio-economic development of the country.

2.4 Vision of SBL:

Socially committed leading banking institution with global presence.

2.5 Slogan of SBL:

“Your trusted partner in innovating banking”.
2.6 Corporate Profile:

Name of the Company Sonali Bank Limited

Chairman Dr. A.H.M. Habibur Rahman
CEO & Managing Director Pradip Kumar Dutta
Company Secretary A.K.M Sajedur Rahman Khan
Legal Status Public Limited Company
Genesis Emerged as Nationalized Commercial Bank in
1972, following the Bangladesh Bank
(Nationalization) Order No. 1972(PO No.26
of1972)
Date of Incorporation 03 June, 2007
Date of Vendor’s Agreement 15 November, 2007
Registered Office 35-42, 44 Motijheel commercial Area,
Dhaka,Bangladesh
Authorized Capital Taka 6000.00 core
Paid-up Capital Taka 3120.00 core
Number of Employee 22,446
Number of Branches 1204
Phone-PABX 9550426-31, 33, 34,
9552924
FAX 88-02-9561410, 9552007
SWIFT BSONBDDH
Website www.sonalibank.com.bd
E-mail td@sonalibank.com.bd
Table: 2.1 Corporate Profile
Some Notable Features of the Bank
Capital Structure
Authorized Capital Tk. 2000.00 core
Paid-up Capital Tk. 1125.00 core
Branches & Subsidiaries
1. Total No of Branches 1204
a. No of Foreign Branches 2
b. No of Local Branches 1202

I.No of Rural Branches 857

II.No of Urban Branches 345
2. No of Regional Offices 19
3. No of Principal Offices 42
4. no of G.M. Offices 10
Subsidiaries 3
1. Sonali Bank (UK) Limited having
6 (six) branches in UK.
2. Sonali Exchange company
Incorporated (SECI) having 9
(nine) branches in USA.
Sonali Investment Limited
(Merchant Banking) having 4 (four)
branches at Motijheel, Paltan,
Uttara, Mirpur in Dhaka,
Bangladesh.
Representative Office 3
1 (one) in Jeddah, KSA; 1 (one) in
Riyadh, KSA and 1 (one) in Kuwait
 Correspondent 631

Table: 2.2 Some Notable Features of the Bank

2.7 Hierarchy of Sonali Bank Limited:

Management

The management of the bank is vested on a board of directors, subject to overall

supervision and directions on policy matters by the board which is constituted in terms
of Bangladesh bank (Nationalization) Order 1972 (Figure). Board of directors,
constituted by seven members has authority to organize, operate and manage its affairs
on commercial consideration within the board policy of government. There are
directors appointed by the government. Other members of the board including MD are
also government appointed out of that at least three have the experience in the field of
Finance, Banking, Trade, Commerce, Industry and Agriculture. The managing director
is the Chief Executive of bank. He executes all the activities under the direction of
board. All line and staff personnel of banks are own recruitment except member of
board of Direction.
 Board Of Director

Managing Director & CEO

Deputy Managing Director at Head Office

General Manager’s Field GM Office at

General Manager at Head Office
Division

Deputy General Manager’s at Divisional Deputy General Manager’s at Field

Head of Head Office officer (GMO,PO, and Crop. BR.)

Assistant General Manager’s at Field

Assistant General Manager’s at Head
Office
Office

Other Executives SEO, EO.SO ,Officers at Other Executives, SEO,EO,SO,Officers

Head Office at Field Office

Other Stuffs at Head Office Other Stuff at Field Office

Figure: 2.1 Managing Structure

 2.8 Organizational Structure:

Sonali Bank is the largest nationalized commercial bank of Bangladesh. It has 1187
branches throughout the country. It has also two overseas branches. The Head Office
of the bank is located at the Motijheel commercial are, Dhaka. The Divisions are
headed by the DGMs and the departments are by AGMs. There are also many sections
under every department in the Head Office. A DGM is the chief of the Principal office
and an AGM usually runs a regional office. Principal offices are the local points of the
bank’s administrative zone in the districts. The regional offices are under control and
supervision of principal offices. The offices are situated at thana level within the
districts. The corporate branches are nearly equivalent to the GM office and usually
headed by the DGMs. They provide all thOnline Banking services such as general
banking, loans & advances etc. Functional hierarchy of Sonali bank is given below:

Head Office

General Managers General Managers

Office at Head Office at Field
Office and Local Office and Local
Office-8 Office-8

Corporate Br-22
Pricipal office-42
Division at HO-39 Authorized Dealer Regional Office- 19
Branch-45

Inland Branch-1202

Overeas Br-2
Kolkata and Shiliguri, India

Figure: 2.2 Organizational Structure

 2.9 Services of Sonali Bank Limited:

Principal Activity of the Bank:

The principal activities of the bank are

1. To facilitate and handle all kinds of commercial banking services to its customers
authorized by Bangladesh Bank.
2. To perform Government Treasury functions and also act as an agent of
Bangladesh Bank.
3. To export and import trade of Bangladesh with other countries under various
agreements.
4. International banking.

Subsidiary:
A subsidiary company named Sonali Exchange co. Inc. was incroporated on 4 April,
1994 under laws of the state of New York, Department of State, licenced on 17
October, 1994 by the State of New York Banking Department and commenced
operation as an International Money Remitter from 12 December, 1994.

Associate:
On 4 November, 1998 Sonali Bank notified the financial Service Authority of the UK
of its intention to voluntarily surrender thOnline Banking license for Sonali Bank UK
branch with effect from June 30, 1990. Sonali Bank UK branch had extinguished all its
retail deposits by 30 June, 1999 and is not permitted to accept any further deposits
from the date. Bur a representative was there till 7 December, 2001. A subsidiary
money remitting company under the name of Sonali Trade and Finance (UK) Limited
has been incorporated under the UK company act of 1985. The company has been
allowed to start its function as a bank from 7 December, 2001 (the operation activities
was started on 10 December, 2001) by the Financial Service Authority of UK changing
its name as Sonali Bank (U.K.) Ltd. 51% share capital of the newly renamed company
is held by the Peoples’ Republic of Bangladesh and remaining 49% by Sonali Bank.
Account Section:

This is a very much crucial section for each business concern. As such this is a crucial
department for a commercial bank. Records of all the transactions of every department
are maintained here. Accounts section verifies all financial accounts and contents of
transactions. Every working day all the accounts are balanced and reconciled to remove
and discrepancy. The overall activities of accounts section are as follows:

1. Record all transactions in the cash book.

2. Record all transactions in general and subsidiary ledger.
3. Prepare daily fund function, weekly position, periodic statement of affairs etc
4. Prepare necessary statements for reporting purpose.
5. Make salary statement and pay salary.
6. Pay all expenditures on behalf of the branch.
7. Branch to branch fund remittance and support for account treatment.
8. Budgeting for branch.
9. Make charges for different types of duties.

Ancillary Services:

Sonali Bank Limited offers multiple special services with its network of branches
throughout the country in addition to its normal banking operations.

Collection:
1. Gas bills
2. Electricity bills
3. Telephone bills
4. Water/sewerage bills
5. Municipal holding tax
 6. Passport fees, visa fees and travel tax
7. Customs & excise duties
8. Source tax & VAT
9. Jakat fund
10. Hajj deposit
11. Land development tax

Payment:

1. Pension of employees of Government and other corporate bodies

2. Bangladesh Bank employees pension
3. Students’ stipend/scholarship
4. Govt. & Non-Govt. teachers’ salary
5. Food procurement bill on behalf of the Govt.
Social Services:

1. Old age allowances

2. Widows, divorcees and destitute women allowances
3. Freedom fighters’ allowances
4. Rehabilitation allowances for acid survival women
5. Maternal allowances for poor women
6. Disability allowances

Sale & Encashment/Purchase:

1. Savings Certificates
2. ICB Unit Certificates
3. Lottery tickets of different Semi-Govt. and Autonomous Bodies
4. Exchange of soiled/torn notes
5. Judicial Service Commission’s application form
Misc. Services:
1. Bank a/c information of tax payee client according to demand of
2. NBR Local Governance Support Project
3. Enlist of Non Government Insurance Company

Risk Management:

Like any other business, risks are also inherent in banking business. But the risks are
complex and multi-dimensional. Although remarkable progress has been made in the
field of risk management in international areas, no structural policy/development in this
matter has yet been made in thOnline Banking sector. In this perspective, Bangladesh
Bank has identified 5 (five) core areas relating to banking operations and issued
necessary guidelines in 5 areas:

1. Credit risks
2. Asset and liability/balance sheet risks
3. Foreign exchange risks
4. Money laundering risks and
5. Internal control and compliance risks.

Training:

Sonali Bank staff college, Dhaka along with three institutes at Chittagong, Rajshahi,
Khulna and one training center at Bogra have been conducting training programs
covering total banking activities in order to impart training to all categories of officers
and staff of sonali Bank.

Library:

Sonali Bank central library is replete with a huge collection of books on diverse and
multifarious discipline. The library has also been enriched with the most recently
published books on Banking, Management, Accounting, agriculture, Industrial
Finance, Economics, Computer, and on many other disciplines and its collection is
increasing every year.

Customer Service:

To ensure qualified customer service sonali Bank has started in addition to

computerization corporate client service and one stop service. To facilitate the foreign
exchange activities Sonali Bank has launched SWIFT (Society for Worldwide
Interbank Finance and Telecommunication) system in its 12 branches. The bank has
launched Website, Reuter service, Internet service, and Ready cash service. The bank
has taken a plan to launch shared ATM system in various important places.

2.10 Products of Sonali Bank Ltd

1. Export credit (Pre-shipment & Post shipment)

2. Facilitating supplier’s credit

3. LCs (Letters of Credit)

4. Guarantees in foreign currency

5. payment guarantee

6. Bill purchasing/discounting

7. Remittance, collection, purchases and sales of foreign currency & traveler’s

cheques

8. NRAT (Non-Resident Account in Taka)

9. NFCD A/C (Non-Resident Foreign currency Deposit)

10. RFCD A/C (Resident Foreign Currency Deposit)

The products and services are provided through a well-established large network of
authorized branches all over the country.
 2.11 Types of Account:

Accounts department is the most important functional area of this branch. The
following types of accounts are maintained in this bank:
1. Fixed deposits A/C
2. Short term deposits A/C
3. Deposit pension scheme (DPS) A/C
4. Sonali Bank special deposit & pension scheme A/C
5. Savings deposits A/C
6. Current deposits A/C Call deposits A/C and
7. Sundry deposit Accounts.

Remittance:
The system of transmitting or sending money from one branch to another branch of the
same bank or from one bank to another bank within a country or outside the country is
known as remittance. It is one of the important functional areas of a bank. A bank can
earn handsome fees as commission from the dealings of money remittance. During my
internship program I have gathered practical experience about how money is remitted
from one branch to another branch of a bank or from one bank to another bank.

Types of Remittance:

Remittance can be of two types:

A) Inland Remittance
B) Foreign Remittance

Inland Remittance:
When money is remitted within a country through proper banking channel, it is termed
as inland remittance. Sonali Bank, Rajshahi medical college hospital Branch deals a lot
of inland remittance at every working day.
Foreign Remittance:

The procedure to transfer money from one country to another country through bank or
other govt. authorized agencies is called foreign remittance. The Sonali Bank, Mirpur
Shilpa Elaka Branch, Dhaka does not provide foreign remittance facility to its
customer directly.

2.12 Duties Performed in the General Banking:

General banking is the one of the most important department of every banking
transaction. During the internship period I learn most this section. I did my work in
the following section under general banking Division.

1. Account opening.
2. Account closing.
3. Cheque Issue.
4. Local Remittance.
5. Clearing House Section.
6. Dispatch section.
3.1 History of Online Banking

The idea of Online Banking came with the rise of users of the internet and with the
development of the World Wide Web. The programmers have been working on data
bases of banking transactions long ago and an idea of Online Banking transactions had
evolved at that time in the early 1980’s. New technologies and the advancement of
computer devices created an opportunity to start a new trend of online shopping.
Online Shopping or shopping from the website using the internet promoted the use of
credit cards. To facilitate online shopping date ware housing or date storage facilities
were used. During the development of the Automatic Teller Machines or ATMs the
development of the databases of banking transactions were also used. In the 1980’s the
financial organizations and banking institutions mainly in Europe and the United States
of America carried out researches and programming experiments on “Home Online
Banking” . At that point of time Home Online Banking was carried out using the
telephones and fax machines. This was done because the internet was not widely
spread and many people were not aware of such facilities. The wide spread of the
internet and the advancement of programming technologies created new opportunities
for banks.
The first Online Banking service was introduced in the United Kingdom by the
Nottingham Building Society (NBS). The Online Banking Facility that was introduced
is believed to have been derived from a system which is known as “Prestel”. The
Online Banking facility introduced by the NBS was not very impressive and had
drawbacks. The main drawback was it restricted the number of transactions and
functions that account holders could execute. In the year 1994 the first Online Banking
service was introduced in the United States. A financial Institution named Stanford
Federal Credit Union had developed this service of Online Banking. There are many
negative sides of Online Banking .These include a hacking , phishing , pharming,
spoofing , sniffing and other unethical acts which makes Online Banking facilities
risky for both the users and the banks . Although Online Banking has negative sides
but we should also consider the positive sides. Online Banking has created a revolution
and it has a significant role to play in enhancing the Online Banking sector.

3.2 Online Banking

Online Banking is transforming the financial services industry through various

impossible innovations. The quantity of cross-border trading and other financial
activities is increasing geometrically make possible by technology. It has been made
possible by technology, particularly information technology to generate, collect and
process information about bank operation and bank customers efficiently and
effectively. It provides the ability to create more effective systems of controls in
individual institutions and in the market themselves. Compared to the paper based
operation, Online Banking Systems, in its most proficient form, offer instant
verification and transfer and reduces the flow of costly paper in the record keeping
process. Application of technology in banking offer opportunity for reduction of both
paper and people. Banks have developed EBS for three main reasons (Horseman,
Michael J. 1979)
1. To protect and increase market share
 2. To reduce operating cost by substituting physical capital and technology for labor
3. to generate new revenue
3.3 Structure of electronic banking

Online Banking is a general term referring to various computer-based technologies for

delivering banking services. Online Banking systems can be divided into two
categories by the functional characteristics, viz. back-office electronic banking, and
electronic financial instruments or front-office electronic services. Back-office Online
Banking provides information management services, and quick fund transfer facilities
both for traditional banking and financial instruments and electronic financial
instruments. Science inception of primary forms of Online Banking it has been passed
through a comprehensive evolution process. Online Banking services can be grouped
into three generations of evolution:

3.4The common features of Online Banking Bangladesh are as follows:

Online Banking idea developed in Bangladesh since 1992 through several multinational
banks. But most of the local and foreign banks are maintained Online Banking their all
branches. Here the researcher fined some common features of Online Banking
Bangladesh.
1. 24- hours cash deposit & withdrawal facility
2. Quick cash withdrawal without having queue
3. Account activities enquiry in any moment
4. Statement request through ATM/Debit/Credit Card
5. Transfer own funds to other account number in same bank
6. Present Balance enquiry
7. More than16- hours shopping facilities
8. Deposit or Mail cash or cheque(s) (Cross cheque) through mechanical device.
9. Changing Personal Identity Number
10. Cash deposit which will originally deposit very next day of deposit that means do
 not need to go to the branch for every occasion.
11. Mini statement which contain 8-10 previous transaction records Can able to pay
utilities bill
12. Withdraw money by using VISA, PLUS, MASTER, MAESTRO and other credit
card
13. Withdraw money from dollar account which gives taka by converting foreign
Currency.
3.5 Products and Services of Online Banking:

The products and services of Online Banking ranges from wholesale to retail products
for corporate and individual customers. The different types of products and services
are designed to satisfy different groups of customers.

Wholesale products and Services include:

1. Wire Transfer

2. Automated Clearinghouse

3. Presentation and payment

4. Cash Management

Retail Products and Services Include:

1. Fund Transfer

2. Downloading Transaction Information Facility

3. Investment

4. Presentation of Bill and Payment

5. Loan Application from the web

6. Balance Inquiry

Special Services
Some Banks render special services to the customers attracting other banks.

Debit Point-of-Sale

An advanced payment system which enables consumers to use an ATM Card to pay
for goods and services, electronically debiting the cardholders account and crediting
the account of the merchant.

Cards: Credit/Debit Card

There are two different types of card. One is debit which designate to withdraw own
moneym from the bank in any time. Another one is a credit system which provided by
bank to their customer. Customer can enjoy their credit amount while they are in
shopping, withdraw cash etc.

Online Banking
Customers need an Internet access service to handle this type of banking. As an E-
Banking customer, he/she will be given a specific user ID and a confidential/secret or
secured password so that they can access to their own account. Here customer can able
to see the ledger balances, transfer his money, request something towards bank, etc.

Home Banking
Home banking frees customers of visiting branches and most transactions will be
automated to enable them to check their account activities transfer fund and to open
L/C sitting in their own desk with the he lp of a PC and a telephone. For example:
HSBC is giving Hexagon facilities to their individual and corporate customer.

Automated Teller Machine (ATM)

Full abbreviation of ATM is “Automated Teller Machine” which acts like a teller point
in a 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. It has different name such as
ATM, 24 hours banking card, money link card, e-cash, ready cash etc. In Bangladesh,
some multinationals incepted the ATM booth in Dhaka since 1992-93. The Grind lays
Bank was the pioneer in Bangladesh then after Standard Chartered Bank, American
express Bank, HSBC, Bank Asia and seven others local private banks are the
followers.

Tele Banking

Tele-Banking permit customers to get access into their respective banking information
24 hours a day. Subscribers can update themselves by making a phone call. They can
transfer any amount of deposit to other accounts irrespective of location either from
home or office.
SWIFT

SWIFT is a bank owned non-profit co-operative based in Belgium servicing the

financial community worldwide. It ensures secure messaging having a global reach of
6,495 Banks and Financial Institutions in 178 countries, 24 hours a day. SWIFT global
network carries an average 4 million message daily and estimated average value of
payment messages is USD 2 trillion. SWIFT is a highly secured messaging network
enables Banks to send and receive Fund Transfer, L/C related and other free format
messages to and from any banks active in the network. Having SWIFT facility, Bank
will be able to serve its customers more profitable by providing L/C, Payment and
other messages efficiently and with utmost security. Especially it will be of great help
for our clients dealing with Imports, Exports and Remittances etc.

Easy Pay Machine

It is a mechanical device which can accepted utilities bill like land phone bills, cell
phone bills, Gas bills, WASA-DESA bills etc. The day after tomorrow bank will report
to the particular authority to give acknowledgement on behalf of their customer.

Others

There are some other electronic services like TV Banking, Mobile Banking; SMS
Banking through cellular phone, Mail Banking etc is practicing ignorable way. But
banks are trying hard to develop new products which can be done through electronic
device like internet, telephone including cellular and mechanical devices.

3.6 Types of Online Banking

Informational: This is the most fundamental level of banking. This type of Online
Banking does not allow its customers to view or maintain their accounts. It also does
not allow its customer and the bank to communicate with each other. Rather it provides
valuable information of its products and services. This is used for marketing purposes
only and can be provided either by the bank or it can be outsourced to a third party.
Appropriate controlling is required to prevent unauthorized alterations to the bank’s
server or website.

Communicative: At this particular level the Online Banking allows interactions

between the bank’s systems and the customers to an extent. It is limited to basic
interactions such as inquiry of accounts, loan applications, or updates of certain files
(such as contact information). The risk is high at this level as the servers may have a
path to the bank’s internal networks. To prevent any unauthorized attempt to access to
the bank’s internal internet appropriate controls are required.

Transactional: This is the most popular type of Online Banking and allows all the
benefits of traditional manual banking. This can allow its users to fully control their
accounts. This includes deposits, payments, withdrawals, transfer of funds etc.
However very strong controlling is required as the risks associated with unethical
practices are the highest at this level. Proper security measures are required to make
Online Banking facilities useful and convenient in the market place.

3.7 The Risk Management of Online Banking

With the rise of internet and new technologies new threats have arisen. New challenges
are created for the banks senior management. The different types of risk of Online
Banking are as follows:

Credit Risk: Online Banking allows its users to apply for credit from anywhere
around the world. There is a risk to earnings or capital from a customer who has failed
to meet his/her financial obligations. It is difficult for banks to identify the identity of a
customer. The bank will also find difficult to verify the collateral against a particular
loan. An individual can also represent himself/herself as someone else and apply for a
loan.

Interest Rate Risk: One of the risks of Online Banking is the risk to earnings or
capital arising from movements in interest rates. Online Banking can attract a large
pool of deposits and loans. The internet can allow customers to compare interest rates
of different banks from the websites. This puts a pressure on the interest rates. Often
the bank needs to react with the changes of interest rates in the market place. The
interest rates can change due to the changes in maturities of different investments, due
the changing rate among different yields. The differences between the timing of rate
changes and the timing of the different cash flows can also affect the interest risk.

Liquidity Risk: Sometimes banks face a difficulty of failing to meet its obligations.
Online Banking increases asset and deposit volatility. Some customers simply maintain
their deposit accounts solely on the basis of favorable interest rates, and they often
bring cash out and deposit in other banks if a more favorable rate is offered. In order to
avoid such circumstances proper asset / liability and loan management systems should
be used.

Price Risk: One of the risks to earnings or capital arising from changes in the value of
traded portfolios of financial instruments is price risk. This is a risk which arises from
activities such as dealing, position taking in interest rate, foreign exchange, equity and
commodity markets. Banks are vulnerable to price risks if they create or expand the
current deposit brokering, loan sales or securitization programs. All of these activities
can create price risks for the banks if they carry out Online Banking activities.

Foreign Exchange Risks: This risk which arises when the assets of one currency are
funded by liabilities in another currency. Social, political an Economic development
can intensify foreign exchange risks. Customers of different countries can take
speculative positions using the Online Banking. The lower costs of transactions allow
them to get involved in such activities. Sometimes banks have higher holding
transactions and investments in foreign currencies. This increases the foreign exchange
risks.

Transactions risk: This risk to earnings and capital that arises from fraud, error, and
the inability to deliver services or products, or to maintain a competitive position or to
manage information. Transaction risk that may exist with Online Banking products if
these are not properly planned not properly implemented and not properly monitored.
Banks which provide Online Banking should always try to meet their customers’
expectations and satisfy them by ensuring them that they have the right product mix
and also have the capability to deliver accurate, timely and reliable services.

Compliance Risk: The risks to earnings or capital that arises from the violations of ,
Non conformance with the laws, rules, regulations , the prescribed practices an ethical
standards of a country. This risk can affect the reputation of a bank, business
opportunities and positioning in the minds of its customers. Banks should be careful in
understanding and interpreting the laws of different countries. Banks should also be
careful in the privacy of customer and taking customer consent wherever necessary.

Reputation Risk: This risks that has a current and prospective impact on earnings and
capital that arises from a negative public opinion. Reputational risk can affect the
bank’s ability to create new relationships with potential customers and to retain
existing ones. Banks which have Online Banking facilities should be concerned about
the reputation risk as it can create a financial loss for the bank diminish its customer
base etc. The services of Online Banking should not have a limited availability, poor
response rate etc. Proper monitoring of the websites are required so that hyperlinks of
the website do not like to implicit endorsements of other websites. These factors
should be put into considerations as customers are likely to switch to other companies
if they find flaws in the Online Banking facilities of a particular bank.

Strategic Risk: This is risk of earnings or capital that arises from adequate business
decisions and the improper implementation of business decisions. Many bank
managers and senior officers do not understand how to implement the strategic and
technical aspects of Online Banking. A proper cost benefit analysis is required for this
purpose. The organization should have the proper structure, resources and expertise to
carry out Online Banking.

Information Security Risk: One of the major risks to earnings and capital is
information security risk. This arises when the security process is not strong enough.
This can expose the institution to malicious hacker or insider attacks, viruses and other
attacks. Data theft , fraud are other unethical practices.
3.8 Features of SBL Q-Cash ATM Network:
1. Sonali Bank Limited has introduced Proprietary Debit & Credit cards.
2. Card holder can easily pay utility bills like- Water, Telephone, Gas etc.
3. It is easy to remit funds among the participating branches of the Bank.
4. 24 hours Transactions is available.
5. It is a risk less Cash carrying facility.
6. Cashless purchase can be made from specific Point of Sales (POS).
7. Only designed Branches of Bangladesh deal Q-Cash cards.
8. Branches of District and Upazilla level will introduce Sonali Bank Q-Cash card
within shortest possible time.

3.9 Sonali Debit Card Facilities:

Sonali Bank Limited is one of the member bank of Q-Cash Consortium. Card holder of
Sonali Bank Limited can use ATMs of consortium member banks, Dutch-Bangla bank
and BRAC bank limited. Member Banks of Q-Cash Consortium:

1. Sonali Bank Limited

2. Basic Bank Limited
3. IFIC Bank Limited
4. Janata Bank Limited
5. National Bank Limited
6. Pubali Bank Limited
7. Trust Bank Limited
8. ICB Islamic Bank Limited
9. Social Islamic Bank Limited
10. Bangladesh Commerce Bank Limited
 11. State Bank of India
12. Eastern Bank Limited
13. Jamuna Bank Limited
14. Markentile Bank Limited
15. NCC Bank Limited
16. Shahjalal Islamic Bank Limited
17. The City Bank Limited
18. Standard Bank Limited

Analysis

Services used by customer

1. Why do you use E- banking?
2. Which E-banking service is most user friendly to you?
3. How often you use E-Banking per week?

Development needed for future

Mobile application should be developed to provide online banking

1. Each online branch should keep computers in branch office for those who do
not use android mobile
2. E-banking customer care service should be initiated for instant help
Factors of consideration

1. Better rates & low service charges:

2. Security of transaction:
3. Quick service (transaction completed in seconds instead of minutes) :
4. Variety of features:
5. Convenience:
6. User friendliness:

Level of satisfaction

1. E- Banking services are satisfactory to you?

By analyzing the above questions I find the following things:

Category A:

1. 45% respondents said they use E-banking services for regular transaction.
25% said they use service for the purpose of deposit and rest 30% use e
banking services for the purpose of withdrawal.
 People use E
45 banking for
%

30
25 %
%

0 0

reguler depo bill & withdraw e

transaction sit tax al tender

2. 65% respondents’ marked ATM service is the most users friendly to them.
25% thinks online banking is the most used friendly and 10% filled sms
banking.

65
%

25
%

10
%
0
online Sms ATM other
Banking banking service s

3. 40% use e-banking services 1-3 times per week. 25% respondents use 4-6
times a week. 25% use every day and rest 10% use 7-9 times per week.
Category B:

1. 80% respondents want bank should develop smartphone mobile application.

Mobile
Application
0%
20
%
agree
neutral
disagre
e
80
%

2. 80% respondents want bank should keep separate computers for online
banking users.
 separate
computer
disagree
neutra
l

agre
e
 3. 80% user thinks that bank should open a 24 hours instant customer care support facility
especially for e banking user.

24 hours customer care service

0%

20%

agree neutral disagree

80%

Category C:

1. 90% wants better rates and low service charges for using e banking services. 10%
respondents find no problem with existing rates and charges.

2. There is no doubt that all the respondents marked that they want perfect security.

3. 90% respondents want to get services very quickly.

4. 80% people want variety of features.

5. 65% wants convenience of services. 30% respondent s are neutral at this question.

6. 85% people want user friendly services.

 100
%
90%
80%
70%
60%
50%
40% not
30% important
20% neutral
10%
0% Important

Category D:

30% people are satisfied with existing e-banking services. 35% respondents are
neutral at this question. But the rest 35% are dissatisfied with the services provided
by Sonali Bank BUET branch.
 Satisfied,
dissatisfied , 30%
35%

neutral,
35%
4.1 Findings

Sonali Bank Limited faces few problems with ATM:

1. Transaction Limit
2. Booths are Not Available in all places
3. Booths are in open place
4. Not available to restaurants and shopping center
5. ATM booths are not always UP
6. No Bangla Interface for mass people
7. No voice commanding option for blind people.
8. ATM’s fall short of money.
Problems relating to Branch Computerization:

1. Server fails for long time

2. New software named CBS (core Banking Software) is now running for few
months. So if someone needs the statement or any data related to
transaction more than 4 moths then the previous software named Baxi bank
is needed.
3. Electronic token system is not in used.
4. Computers are not up to date.
Problems relating to SMS and Online Banking:

1. SMS banking is not or rarely used.

2. SMS service is not available
3. Online Banking may have the risk of password fraudulent.
4. Online security is not as much powerful as the size of bank Problems relating
to

Q cash network:

1. This service is not available

 2. Only designed braches deal with Q cash cards.
3. Most of Customers of SBL don’t know about this service because of poor
publicity.
4.2 Recommendations:

To overcome the problem I would like to suggest the following things:

1. Bank should establish more ATM booths

2. ATM booths should have enough money
3. Bangla interface should be introduced as soon as possible.
4. Branch office should not be connected with local broadband service. In this
case I suggest that the branches should use BTCL internet service.
5. SMS banking needs more development. Revival of this service is the demand
of time.
6. Head office should think about to develop smartphone mobile application for
providing better services.
7. E-banking services should try to mobilize more deposit schemes through
better marketing and innovative measures.
8. E-banking system should be more flexible.
9. All the statement relating to transaction should provide in the
CBS software. E banking should develop their communication
among branches.
10. E-banking service should be according to the customer expectation and
satisfaction.
11. E-banking service should be resolve the entire problems very quickly that
the customer face in online transaction.
12. Marketing and sales force should be developed to attract customer.
4.3Conclusion

The study clearly indicates that those who use E-banking features of Sonali Bank
are not very satisfied with the service. If the bank plans to expand the customer
base of E-banking they should focus more on speed, user friendliness, and safety
and convenience, quick response factors of E-banking. Proper web-hosting is
required for this reason. Customers should also be made aware of unethical
practices like sniffing, spoofing, phishing, pharming and other malicious software
which can be used by hackers. Attention should also be given in the encryption of
the information which is exchanged between the users and the bank. So the study
is very beneficial for both Sonali bank and Bangladesh to get insights about E-
banking relations with customer satisfaction
Bibliography

Books:

1. Dispensa, M., 1997. Use logistic regression with customer’s satisfaction

data. [Online] Available at:
WorldWideWeb:http://papers.ssrn.com/sol3/papers.cfm?
abstract_id=1021484 [Accessed February 2015].

2. Kabir, S. Z. B. a. F., 2012. Practice of E-banking in commercial bank: An

empirical study in Bangladesh, Dhaka, Bangladesh: Stamford University
Bangladesh.

3. Kotler, P., 2000. Marketing Management. 10 ed. New Jersey: Prentice-

Hall.

4. McQuitty, F. W., 2000. Systematically Varying Customer Satisfaction and

its implications for product choice, NY: Academy of Marketing Science
Review.

5. Mishkin, F., 2001. The Economics of Money, Banking and Financial

Markets. 6th ed. MA: Addison-Wesley.

Articles:

1. Moody, 2004. Traditional banks gain edge with electronic

banking. [Online] Available at:
<http://www.cendant.com/media/trends_information/
trends_information.cgi/Marketing+ S

2. Ongkasuwan M, T. W., 2002. A Comparative Study of Internet Banking in

Thailand..
[Online]
Available at: http://www.ecommerce.or.th/nceb2002/paper/55-
A_Comparative_Study.pdf [Accessed 20 February 2015].

3. Santos, 2003. “E-service quality: a model of virtual service quality

 dimensions”,.

Management service quality, 13(03), pp. 233-246.

4. Shamsuddoha, M., n.d. Electronic Banking in Bangladesh,

Chittagong: University of Chittagong.

5. Zhao, S. a., 2010. “Relationship between online service

quality and customer satisfaction”. s.l., Lulea University.

Website:

1. www.cendant.com

2. www.ecommerce.com

3. www.sonalibank.com