Assignment on

Course: E-Banking

Topic: E-Banking Products of Bangladesh

Submitted to:

Mohammad Kamrul Ahsan

Assistant Professor

Department of Business Administration

Metropolitan University

Submitted by:

Syeda Sadia Islam

BBA 41st (Finance & Banking)

ID: 171-116-089

Department of Business Administration

Metropolitan University, Sylhet

Submission date:

24th June, 2020

Electronic banking is a form of banking in which funds are transferred through an exchange of
electronic signals rather than through an exchange of cash, cheques, or other types of paper
documents. Transfers of funds are taking place between financial institutions like banks and
credit unions. They also occur between financial institutions, such as stores, and commercial
institutions. Whenever someone withdraws cash from an ATM or pays for groceries using a
debit card (which draws the amount owed to the store from a savings or checking account), the
funds are transferred via electronic banking. Electronic banking is based on complex computer
systems which communicate using telephone lines. These computer systems record transfers and
fund ownership, and control the methods that customers and business institutions use to access
funds. A common method of access (or identification) is by access code, such as a personal
identification number (PIN) that one might use to withdraw cash from an ATM machine. There
are various electronic banking systems, and they range in size. A small system example is an
ATM network, a set of interconnected automated teller machines connected to a central financial
institution and its computer system. The Federal Reserve Wire Network, called Fedwire, is an
example of a big electronic banking system.

E- Banking products and services in Bangladesh

E-Banking products and services can include wholesale products for corporate customers as well
as retail and fiduciary products for individual customers. Ultimately, the products and services
obtained through internet banking may mirror products and services offered through other bank
delivery channels. A brief description of retail and wholesale products and services is given
below:

Automated Teller Machine (ATM):

An automated teller machine or automatic teller machine (ATM), also known as an automated
banking machine (ABM), cash machine is a computerized telecommunications system providing
customers of a financial institution with access to financial transactions in a public space without
the need for a cashier, human clerk or bank counter. ATMs are identified by a range of other
names, such as ATM machines, automatic banking machines and various national variations
arising from patents on individual bank-owned ATM systems. On most modern ATMs, the
customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart
card with a chip that contains a unique card number and some security information such as an
expiration date or CVVC (CVV). The customer shall provide authentication by entering a
Personal Identification Number (PIN).

Using an ATM, customers can access their bank accounts in order to make cash withdrawals,
debit card cash advances, and check their account balances as well as purchase prepaid cell
phone credit. If the currency being withdrawn from the ATM is different from that which the
bank account is denominated in the money will be converted at an official wholesale exchange
rate.

Debit Card:

A debit card is a plastic card which provides an alternative payment method to cash while
making purchases. The amount of a transaction is typically displayed on a card reader, after
which the customer swipes the card then enters their PIN number (an attendant must swipe gift
cards at gas stations). There is usually a short delay while the EFTPOS (Electronic Funds
Transfer at Point of Sale) terminal contacts with the computer network (over a phone line or
mobile connection) to verify’ and authorize the transaction.

Credit Card:

A credit card is a system of payment named after the small plastic card issued to users of the
system. A card issued by a financial company giving the holder an option to borrow funds,
usually at point of sale. Credit cards charge interest and are primarily used for short-term
financing. Interest usually begins one month after a purchase is made and borrowing limits are
pre-set according to the individual’s credit rating. A credit card is different from a debit card in
that it does not remove money from the user’s account after every transaction. In the case of
credit cards, the issuer lends money to the consumer. It is also different from a charge card which
requires the balance to be paid in full each month.

Point of sale (POS):

POS is an abbreviation for point of sale (or point-of-sale, or point of service). This can mean a
retail shop, a checkout counter in a shop, or a variable location where a transaction occurs in this
type of environment. Additionally, point of sale sometimes refers to the electronic cash register
system being used in an establishment. Point of sale systems are used in restaurants, hotels,
stadiums, casinos, as well as retail environments in short, if something can be sold, it can be sold
where a point of sale system is in use.

Check Truncation:

Check truncation is such a service in which a financial institution does not return the rejected
checks with the monthly statement to their customers, rather they provide statement of rejected
checks with the monthly statement. The banks store the rejected checks for a certain period
(usually 90 days). During this time period, a customer can adjust/rectify his account if any
imbalance is found between his own records and the bank statement provided by bank.

Home Banking:

At first, banks introduced Telephone Bill Payment (TBP) system so that customers could be able
to do their banking activities from their home. The next version of home banking was Video
Home Banking (VHB). The internet is expected to be a major factor in home banking.

Retail Automated Clearing House Service:

The Automated Clearing House (ACH) is an electronic network for financial transactions. ACH
processes large volumes of both credit and debit transactions which are originated in batches.
ACH credit transfers include direct-deposit payroll payments and payments to contractors and
vendors. ACH debit transfers include consumer payments on insurance premiums, mortgage
loans, and other kinds of bills. Businesses are also increasingly using ACH to collect from
customers’ online, rather than accepting credit or debit cards.

Wire Transfer:

Wire transfer is a process which ensures fast and appropriate timing of fund transfer from the
sender to the recipient. This kind of transfer of money could be either within the country or
abroad. Funds are transferred under the following network:

 Fed wire (The Federal Reserve Communication System)

 Bank wire
 CHIPS (The Clearing House Inter-bank Payment Service)
 SWIFT (The Society for World Wide Inter-bank Financial Telecommunication)
Corporate Automated Clearing House:

The Automated Clearing House (ACH) is an electronic network for financial transactions. ACH
processes large volumes of both credit and debit transactions which are originated in batches.
Other retail and fiduciary products and services may include Balance inquiry, Funds transfer,
Downloading transaction information, Bill presentment and payment, Loan application,
Investment activity and other value-added services.

Internet banking:

Internet banking refers to the use of internet as a remote delivery channel for banking services
which permits the customer to conduct transactions from any terminal with access to the internet.
It is the WWW through which banks can reach their customers directly with no intermediaries.
Internet banking in true sense is still absent in Bangladesh. Only 7 out of 48 banks are providing
some banking services via internet that include account balance enquiry, fund transfer among
accounts of the same customer, opening or modifying term deposit account, cheque book or pay
order request, exchange rate or interest rate enquiry, bills payment, account summary, account
details, loan repayment, loan information, statement request, ,cheque status enquiry, stop
payment cheque, refill prepaid card, password change, bank guarantee application, lost card
(debit/credit) reporting, pay credit card dues, view credit card statement, or check balance.

Mobile banking:

Mobile banking (also known as M-banking or SMS banking) is a term used for performing
balance checks, account transactions, payments etc. via a mobile device such as a mobile phone.
Mobile banking is most often performed via SMS or the Mobile Internet but can also use special
programs called clients downloaded to the mobile device. The standard package of activities that
mobile banking covers are: mini-statements and checking of account history; alerts on account
activity or passing of set thresholds; monitoring of term deposits; access to loan statements;
access to card statements; mutual funds/equity statements; pension plan management; status on
cheque, stop payment on cheque; ordering check books; balance checking in the account; recent
transactions; due date of payment PIN provision, change of PIN and reminder over the internet;
blocking of (lost/stolen) cards; mobile recharging; commercial payment processing; bill payment
processing; peer to peer payments; withdrawal at banking agent;3 and deposit at banking agent.