Internship Report on Internet Banking Services of Janata Bank Limited

AN INTERNSHIP REPORT ON INTERNET BANKING SERVICES OF JANATA BANK LIMITED

SUPERVISED BY Tahmina Rita Lecturer Department of Management Studies Faculty of Business Studies Jagannath University.

SUBMITTED BY Md. Sulayam ID: M - 150202006 Session: 2015-2016 Department of Management Studies Faculty of Business Studies Jagannath University.

JAGANNATH UNIVERSITY Date of Submission: 30 April 2017

Letter of Transmittal 30 April 2017 Tahmina Rita Lecturer Department of Management Studies Jagannath University.

Subject: Submission of Internship Report. Dear Mam, You will be pleased to know that I have completed Internship Report on ‘‘Internet Banking Services of Janata Bank Limited’’. Under the state of the report, I have been given relevant information from the employees of Janata Bank Ltd for collecting primary data. I also have gone through various publications relating with Janata Bank Ltd and its operation. This report provides me an insight on the Internet Banking System of Janata Bank. In this report I have tried to find out some problem areas related to Internet Banking of Janata Bank Ltd and tried to find out some possible solutions to those particular problems. I have enjoyed the preparation of the report because it provides me with the chance to put my theoretical knowledge in a real life situation. If you need any kind of further information I will be glad to provide accordingly. I therefore pray & hope that you would be kind enough to me by providing acceptance of this report and oblige thereby.

Sincerely yours, Md. Sulayam ID: M- 150202006 Session: 2015-2016 MBA 7th Batch Department of Management Studies Jagannath University. i

Student’s Declaration

I do hereby solemnly declare that the report entitled “Internet Banking Services of Janata Bank Limited’’ embodies the results of my own effort after completion of 3 Months work at Janata Bank, perused under the supervisor of Tahmina Rita, Lecturer, Department of Management Studies, Jagannath University, Dhaka

I also confirm that, this report is only prepared for my academic requirement not for any other purpose. It has not been previously submitted to any other university/college/organization for an academic qualification/certificate/diploma or degree.

I further affirm that the work reported in this internship is original and no part has been previously submitted to any books or in any other universities.

Md. Sulayam Roll No: M150202006 Section: A, 7th Batch Department of Management Studies Jagannath University, Dhaka

ii

Certificate of Supervisor

I am pleased to declare that Md. Sulayam, MBA program bearing the ID No: M - 150202006, was advised to perform a study on the issue “Internet Banking Services of Janata Bank Limited’’ for preparing an Internship Report. This student has reviewed all the relevant materials and has conducted efforts practically in “Janata Bank Ltd” for 3 Months to achieve practical knowledge regarding banking sector in Bangladesh.

He is wished all the best in his effort.

…………………… Tahmina Rita Lecturer Department of Management Studies Jagannath University.

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Acknowledgement First of all, I would like to express my gratitude to Omnipotent and Almighty ALLAH, whose invisible guidance helped me to complete this report. Although time was very limited for getting the sufficient knowledge about all of banking service, but the short experience that I gathered will remain as an asset for all the time to come in my life. I take the opportunity to express my deep sense of gratitude of my reverend supervisor Tahmina Rita for her invaluable suggestion and guidance during the study period that has greatly inspired me in preparing this report successfully. Then I must take this opportunity to thank Mr. Ashish Kumar Sarker, AGM of Janata Bank Limited of HRD division, for giving me the opportunity to complete my internship requirement in the organization. It couldn’t be possible to thank all of those marvellous people who have contributed for the preparation of this report. I am also grateful to the Department of Management Studies, Jagannath University for proving me such opportunity to come closer to real situation. I must express my gratitude to all the executives and officers of Janata Bank Limited, REB Khilkhet branch, Dhaka.

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Executive Summary Bank is a financial institution that receives, collects, transfers, pays, exchanges lends, invests, or safeguards money for its customers. Banking is the business of providing financial services to the private individuals, corporations, government agencies and business and industries. The main service of a bank is mobilizing deposits and lending these to those people to finance their consumption or business activities. Banks also render services like issue of letter of credit and guarantee, remittance or money, collection of utility bills, underwriting of capital issues, portfolio management as well as locker’s services and custodian of valuables. Internet banking is the practice of making bank transactions or paying bills via the Internet. Thanks to technology, and the Internet in particular, we no longer have to leave the house. We can shop online, communicate online, and now, we can even do our banking online. Internet banking allows us to make deposits, withdrawals and pay bills all with the click of a mouse. It doesn't get much more convenient than that the benefits are many.

Janata Bank Limited is a state owned commercial bank with numerous branches spreading all over Bangladesh and is catering the need of the mass business people. It was corporatized on 15th November 2007. Janata Bank was born with a new concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development of the country. Janata Bank Limited is playing the most significant role in collecting foreign remittance from different countries and transfers the currency in BDT to the destined location. Janata Bank Limited is one of the largest and leading public commercial bank of Bangladesh. After completion of core and major courses, at the final semester I have completed my internship in Janata bank limited. I worked in Janata bank, Khilkhet branch. I worked with some officers and departments to gather experience and practical knowledge. I also worked with customers to get the idea about real scenario of banking in practical life. On basis of my practical experience and theoretical knowledge I prepared the internship report on ‘‘Internet Banking Services of Janata Bank Limited.” This report has been prepared on basis of both primary and secondary data. For completing this report I have collected necessary information to assess the Internet Banking system of JBL. I collected secondary data from various sources like published materials such as annual reports, web sites, web reports etc. v

The report can be divided in to two parts. First, is the organization part and second is the project or research part. In this report, I have arranged the data in such a way that, the results have reached a desired destination of understanding.

The online banking services and internet banking services are described along with the services availed by JBL. Besides that the current problem and risk of online banking sector is also discussed throughout the report. The position of Janata Bank Ltd in online banking sector with its growth pattern is also discussed here. At the end of the study some suggestions have been made by analysing current internal and external situations.

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Abbreviation and Elaboration A/C: Account AEO: Assistant Executive Officer AGM: Assistant General Manager ATM: Automated Teller Machine BACH: Bangladesh Automated Clearing House BACPS: Bangladesh Cheque Processing System BBA: Bachelor of Business Administration BDT: Bangladeshi Taka BEFTN: Bangladesh Electronic Fund Transfer Network C/A: Commercial Area CBS: Core Banking System CDC: Central Data Centre CSR: Corporate Social Responsibility DGM: Deputy General Manager DMD: Deputy Managing Director DRS: Disaster Recovery Site EO: Executive Officer ERP: Enterprise Resource Planning FAGM: First Assistant General Manager FCB: Foreign Commercial Bank GM: General Manager Govt.: Government HRD: Human Resource Department ICT: Information and Communication Technology IP: Internet Protocol ISP: Internet Service Provider IT: Information Technology JBL: Janata Bank Limited LC: Letter of Credit Ltd.: Limited MD: Managing Director vii

PCB: Private Commercial Bank PIN: Personal Identification Number POS: Point Of Sale ROI: Return on Investment SCB: State Owned Commercial Bank SEO: Senior Executive Officer SWIFT: Society for Worldwide Interbank Financial Telecommunication SWOT: Strengths, Weaknesses Opportunities and Threats TCP: Transfer Control Protocol TD: Term Deposit WWW: World Wide Web

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Table of Contents

PRELIMINARY PAGES Letter of Transmittal

I

Students declaration

Ii

Certificate of Spervisor

Iii

Acknowledgement

Iv Vi

Executive Summary

vii

Abbreviation and Elaboration Chapter-1

INTRODUCATION

1-13

Serial No.

Particulars

Page No.

1.1

Introduction of the topic

2

1.2

Background of the Study

4

1.3

Objectives of the Study

4

1.4

Methodology of the Study

5

1.5

Flow Chart of the Study

6

1.6

Scopeofthestudy

7

1.7

Limitations of the study

7

1.8

Literature Review

8

Chapter-2

OVERVIEW OF THE ORGANIZATION

14-30

Serial No.

Particulars

Page No.

2.1

Historical Background of Janata Bank Limited

15

2.2

Profile of Janata Bank Limited

16

2.3

Mission, Vision and Core Values of JBL

18

2.4

Strategic Objectives of JBL

19

2.5

Ethical Principles ofJanata bank Ltd.

22

2.6

Code of Conduct of JBL

22

2.7

Products and Services of JBL

23

ix

2.8

Organogram of JBL

25

2.9

SWOT Analysis of JBL

26

2.10

Financial Performance of JBL

28

Chapter - 3

INTERNET BANKING SYSTEM OF JANATA BANK LIMITED

31 - 44

Serial No.

Particulars

Page No.

3.1

Janata Bank and Internet Banking

32

3.2

Most Lucrative Services of JBL

35

3.3

Functional Services of JBL

37

3.4

Internet Banking Security of JBL

39

3.5

Risks Associated in Internet Banking

39

3.6

Internet Banking Problem of JBL

43

Chapter - 4

FINDIGNS & ANALYSIS

45 - 48

Serial No.

Particulars

Page No.

4.1

Empirical Analysis

46

4.2

SWOT Analysis

46

4.3

Cost Volume Profit Analysis

48

4.4

Percentage of most lucrative services of JBL

48

4.5

Findings

49

Chapter - 5

RECOMMENDATIONS AND CONCLUSION

50 - 54

Serial No.

Particulars

Page No.

5.1

Recommendations

51

5.2

Conclusion

53

END MATTERS 55

References

x

xi

CHAPTER: ONE INTRODUCTION

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1.1 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 channeling 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

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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 or Internet banking allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.

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1.2 Background of the study The MBA 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 MBA 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 MBA program I applied and get appointed to Janata Bank, Farashgonj branch from to. A topic has been selected “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 Internet Banking Services of Janata Bank Ltd. I have done this report as the requirement MBA program. My instructor Tahmina Rita has assigned this topic. I choose Janata Bank Limited for my study. I collected information about 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.

1.3 Objective of the Study Broad Objective: 

The broad objectives of this report is to fulfill my Masters of Business Administration 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.

4



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.

1.4 Methodology 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.

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1.5 Flow Chart of the Study

Planning

THE APPROACH -THE LITERATURE REVIEW -THEORIETICAL CONSIDERATION COMMUNICATING

Methodology Primary Resources a) Official records of Janata Bank b) Face to face conversation

Secondary Resources a) Annual report b) Working papers c) Office files d) Bank website

Collecting Information

Analyzing

Preparing the Report

Submission Of the Report

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1.6 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.

1.7 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;

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1.8 Literature Review 1.8.1 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 realtime, while others do it daily. Once information has been entered, it doesn't need to be reentered 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. Internetonly 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 traveler's checks and cashier's checks.

1.8.2 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.

8

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

1.8.3 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 1.8.4 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:

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• 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 on line banking services internally. Alternatively, Banks can outsource any aspect of their on line 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.

1.8.5 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

10

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.

1.8.6 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 stateowned 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

11

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, internet banking, mobile banking, and telephone banking.

1.8.7 Users of Internet Banking over seven years in Bangladesh

Internet user 40,00% 35,00% 30,00% 25,00% 20,00%

Internet user

15,00% 10,00% 5,00% 0,00% 2011

2012

2013

2014

2015

Figure: Internet user percentage of total population From the figure we see that the Internet users of our country are increasing every year. After connecting with the information superhighway, the total country is connected by fiber 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

12

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.

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CHAPTER: TWO ORGANIZATIONAL OVERVIEW

14

2.1 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 initiatives 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 JanataBhaban 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 honor 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.

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2.2 Profile of JBL Name of Company

Janata Bank Limited

Registered Office

Janata Bhaban,110, Motijheel C/A, Dhaka1000, Bangladesh.

Legal Status

Public Limited Company

Date of Incorporation

21 May 2007

Date of Commencement of Business

31 May 2007

Authorized Capital

Tk. 30,000 Million

Paid up Capital

Tk. 19,140 Million

Face value per share

Tk. 100 per share

Shareholding Pattern

100% Share owned by the Government of the People’s Republic of Bangladesh

Tax Identification No

001-200-2732

Vat Registration No

9011050160

Chairman

Shaikh Md. Wahid-uz-Zaman

CEO & Managing Director

Mr. Md. Abdus Salam

Chief Risk Officer

Mr. Omar Farooque (DMD)

Head of Internal Control and Compliance

Mrs. MahtabZabin (GM)

Chief Financial Officer (CFO)

Mr. Md. NurulAlam FCA, FCMA (GM)

Company Secretary

Mr. Md. Mosaddake-Ul-Alam (GM)

Domestic Network Number of Branch

900

Number of Divisional Office

11

Number of Area Office

47

Number of AD Branch

56

Overseas Network Number of Branch

04

Location of Branches

Abudhabi, Dubai, Al-Ain and Sarjah. UAE

Chief Executive Office

Obeid Sayah Al – Mansuri Building Zayed,1st Street (Electra Road), Post Box No 2630 Abu Dhabi, United Arab Emirates

16

Subsidiaries Dhaka

Janata Capital and Investment Ltd.

Italy

Janata Exchange Company srl

USA : Not yet started its operations

Janata Exchange Company,

Number of Correspondence

1242

Number of Employees

14413

Number of Exchange House

72

Corporate Rating Status Entity Rating

A + in the long term As Govt. owned AR-2 in the short term As Govt. owned AAA in the long term AR-1 in the short term

Telex

675840JBDBJ, 671288 JBHOBJ

Phone PABX

9560000, 9566020, 9556245-49, 9565041-45, 9560027-30

Fax

88-02-9564644, 9560869

E-mail

[email protected]

Website

www. janatabank-bd.com

Swift Code

JANBBDDH

Figure: Profile of Janata Bank Limited.

17

2.3 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

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Commitment

Accountability

Quality

Values

Responsibility

Transparency

Diversity

Sustainability

Professionalism

Figure: Core competences of Janata Bank Limited

2.4 Strategic Objective of JBL To analyze strategic objectives of Janata Bank Ltd at first the basic strength factors and the opportunity along with its need is discussed.

JBL have • Concern • Commitment • Competence

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JBL strengths • Nationwide networks, 900 branches • Foreign Network 4 branches • Foreign Correspondence 1242 • State owned image • Market reputation • Global recognition • Strong deposit base • Strong capital base • No provision shortfall • Skill manpower • Experienced management • Newly recruited talents

JBL brand • Easy access to customers • Quality and responsive staff • Service with competitive cost • Business diversification • Professionalism • High impact CSR • No hidden cost • No provision shortfall • Skill manpower • Experienced management • Newly recruited talents

JBL need 

Sense of belonging (ownership)



Team spirit



Human touch with clients



Managerial efficiency

20



Innovative thinking



Free from corruption



Improve on-line banking



Introduction of mobile banking



Broadening of deposit base



Expedite cash recovery



Making all branch profitable



Improved training program



Boost up foreign remittance



Ensure chain of command



Correct estimation of borrowers demand



Proper valuation of security



Customer preference



Synthesis of mass banking and elite banking



Avoid loan sanctioning bureaucracy



Aware gender sensitivity



Aesthetic infrastructure

Concerning the factors above JBL have the following objectives 1) To ensure inflow of funds at combinations of least possible cost. 2) To maintain a discreet credit policy. 3) To extend financial assistance to the citizenry, living at dispersed locations by expanding the network of branches. 4) To practice stronger IT-driven initiatives that will meet the challenges and requirements of the bank and its clientele. 5) To improve administrative and organizational structures in order to prepare the platform for best practices of corporate governance.

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2.5 Ethical Principles Bank deals with public money where ethical compliance is very important. JBL follows and maintain ethical values in every sphere of its banking operation and customer services. The core ethics of JBL business are as follows: 

Implement justice and fairness;



Ensure optimal customer services;



Maintain privacy and secrecy of customer’s information;



Prevent money laundering and corruption;



Protects and upholds corporate values;



Maintain accuracy and transparency in financial reporting;



Protect natural environment.

2.6 Code of Conduct In accordance with the ethical principles the code of conduct of JBL employees shall: 

Act with integrity, competence and dignity;



Loyal to the bank and bank’s interest;



Maintain professionalism and ethical standards;



Deliver professional service in accordance with JBL policies and relevant standards;



Try to fulfill the customer needs in the best possible manner within the guideline of corporate ethics;



Keep all matters confidentially;



Maintain knowledge of and comply with all applicable laws, rules and regulations;



Never offered or accept illegal gifts or other facilities in order to achieve personal advantage;



Not engaged in any unprofessional conduct involving dishonesty, fraud, misrepresentation or commit



Any act that reflects adversely on honesty, trustworthiness and professional competence.

22

2.7 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

23

Financial Services 

Inland Remittance



Foreign Remittance



Other Financial Services

Other Services 

Utility Services



Welfare Services



Q-Cash (ATM) Services



Others

Customer Care

Web based Spot cash 

Internet Banking

24

2.8 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

25

2.9 SWOT Analysis of JBL Each and every organization should be aware of their strengths, weaknesses, opportunities and threats. This analysis is known as SWOT analysis. The central purpose of SWOT analysis is to identify strategies that fit or match a company’s resources and capabilities according to the demand of environment in which company operates. So the strategic alternatives generated by a SWOT analysis should be built on company’s strengths in order to exploit opportunities and counter threats and to correct weaknesses.

SWOT analysis explains environment of an organization in two broad ways. They are: a) Internal Environment Analysis: It includes strengths and weaknesses. b) External Environment Analysis: It includes opportunities and threats. During my internship period in Janata Bank I have found some aspects relating to the Bank’s strengths, opportunities, weaknesses and threats, which I think, affect the bank’s performance. These are given below:

Strengths 

As a large bank, it has qualified and experienced manpower.



Branch location is suitable for business.



Bank’s assets position is quite satisfactory and now there is no fund crisis.



Bank has requisite wealth to sustain in the various challenges of market economy



Being a nationalized banking organization, it always gets government support in all of its operations.

Weakness 

As many employers retired from the bank, there is a crisis for manpower in the bank.



Bureaucrat official process hampered the daily internal workflow.



Lack of motivation for the workers.



Low salary structure for the employees.



In some cases management-employee relation is not good.

26

Opportunities 

Expansion of new investment areas.



Scope for automation will open a big door of opportunity.



In case of fund crisis Janata Bank gets government support.



The bank undertakes need-based training program.

Threats 

Newly developed privatized and foreign banks.



Facing a great competition with other commercial banks and financial institutions.



Loan recovery systems are very weak.



Policies are not practiced properly.

27

2.10 Financial Performance Sl

Particulars

2015

2014

2013

2012

2011

A.

Operational Information's & Indicators

1

Total Deposits

516010

478535

409767

361677

286566.84

2

Total Loans & Advances

319773

285747

305339

257801

225732

3

Import

144556

176671

188284

197285

183744

4

Export

154079

153252

156525

153758

118515

5

Foreign Remittance

106677

103982

100089

72285

52640

6

Non Interest Income

-----

5145

8134

9357

7283

7

Total Classified Loans & 37375

31766

53202

15040

11827

1212

14534

15722

12036

3532

4357

3645

5561

11.12%

17.16%

5.60%

5.30%

59.71%

74.52%

71.28%

78.77%

Advances(Including Overseas) 8

Operating Profit

9

Reduction

of

10683 Classified -----

Advance 10

Rate of Classified Loans & 11.69% Advances

11

Deposits Advances Ratio

61.97%

B.

Financial Indicators & Information

12

Authorized Capital

30000

20000

20000

20000

20000

13

Paid up Capital

19140

19140

11000

8125

5000

14

Required Capital

35420

33392

31898

30643

22973

15

Capital Kept

-----

34301

11780

31242

23454

16

Capital (Shortfall)/Surplus

1048

908

(20118)

599

481

17

Loan loss provision required 19345

31772

8175

6823

2946

2240

2998

2152

a) For classified loans and 21684 advances b) For unclassified loans -----and advances 18

Provision Kept

-----

22291

34012

11173

8975

19

Total Assets

629454

586082

511129

440389

345234

20

Earning Assets

496785

461290

434578

376071

293020

28

21

Total

Contingent 72495

Assets/Liability

99726

112559

151207

106228

(Off

Balance Sheet Items) 22

Profit after tax & Provision 3813

9551

(16280)

4445

4908

23

Rate of Return on profit ----

----

(3.19%)

1.01%

1.42%

Investment 8.47%

9.39%

8.04%

7.72%

4.89%

after tax 24

Return

on

(ROI) 25

Cost of Deposit

7.34%

7.75%

7.24%

5.57%

4.17 %

26

Operating Cost

-----

8731

1.97%

2.23%

2.31%

27

Cost of Fund

8.82%

9.23%

9.21%

7.80%

6.48%

28

Average Return on Loan & 11.44%

12.39%

12.12%

9.84%

8.97 %

Advances 29

Interest Spread

4.10%

4.64%

4.88%

4.27%

4.80%

30

Net spread

2.06%

3.16%

2.40%

2.13%

2.50%

31

Earning per share

19.92

86.31

(148.0)

60.45

98.16

32

Current Ratio

-----

1.04

1.03

1.06

1.10

33

Efficiency Ratio

-----

15.86%

15.11%

17.54%

21.61%%

29

30

CHAPTER: THREE INTERNET BANKING SERVICES OF JANATA BANK LTD

31

3.1 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 equiped 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.

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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 center 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 center.

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 networksharing 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.

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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.

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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

3.2 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.

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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.

36

3.3 Functional services of JBL In true sense internet banking is still absent in Bangladesh. Banks are providing banking services via internet that includes3.3(1) Account Summary The Customer will be able to view the list of Current, Saving, Term Deposit and Loan accounts with the current balance. 3.3(2) Account Details The Customer can choose a particular account and see the account details including unclear fund, limit, interest accrued etc. 3.3(3) Account Activities The customer can see or print his transaction activity in a given account for a particular period. 3.3(4) Electronic Fund Transfer The customer can transfer funds from one of his accounts to another of his accounts within the bank. 3.3(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). 3.3(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. 3.3(7) Loan Repayments The customer can make payment of the loan installment from his CASA account.

37

3.3(8) Statement Request The customer can make a request for account statement for a required period. The bank will manually service this request. 3.3(9) Cheque Book Request The customer can make a request for a Cheque book. 3.3(10) Cheque Status Inquiry The customer can choose an account and enter the Cheque no for which the status should be viewed. 3.3(11) Stop Payment Cheque The customer can mark his Cheque leaf as stop payment. 3.3(12) Interest Rate Inquiry The customer can query on the interest rates on CASA & Term Deposit Products. 3.3(13) Foreign Exchange Rate Inquiry The customer can query on the Foreign Exchange (FX) Rates using this function. 3.3(14) Refill Pre-Paid Card The customer can buy a refill number for his pre-paid mobile phone or ISP link. 3.3(15) Change Password The customer can change his Internet Banking Password using this function. 3.3(16) Letter of Credit The customer can initiate the LC application through Internet Banking. 3.3(17) Bank Guarantee The customer can initiate the Bank Guarantee through Internet Banking.

38

3.3(18) Limits Query The customer can view his Loan Limits and Limits Utilization through Internet Banking.

3.4 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,

(I) Authentication, viz., assurance of identity of the person in deal, (ii) Authorization, viz., a party doing a transaction is authorized to do so, (iii) The privacy or confidentiality of data, information relating to any deal, (iv) Data integrity, viz., assurance that the data has not been altered and, (v) Non repudiation, viz., a party to the deal cannot deny that it Originated the communication or database.

3.5 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

39

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.

3.5(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, non-

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.

3.5(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

40

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

41

3.5(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

3.5(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.

3.5(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.

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3.6 Internet Banking Problems of JBL

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

43

 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.

44

CHAPTER: FOUR FINDINGS AND ANALYSIS

45

4.1 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.

4.2 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.

46



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.

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4.3 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 reduce the need for writing and sending cheque .where it can takes 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.

4.4 Percentage of most lucrative internet services of JBL

2015

12%

20%

Electronic Money Credit Cards 26%

13%

Debit Cards ATM Point of Sales

29%

From the above graph we see that among all services, people mostly use the debit card service, then debit card, electronic money, credit card and last of all they use the point of sales services.

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4.5 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.

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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.

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As giving emphasize from Bangladesh bank it will develop easily. As a forecasting result BB has already develop automated clearing house.

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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.

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Several training programs had been initiated to make the employees capable to serve the internet banking need of the customers of JBL.

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

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CHAPTER: FIVE RECOMMENDATIONS AND CONCLUSION

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5.1 Recommendation We know that Janata Bank limited is one of the famous commercial bank 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.

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

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Rises Credit card acceptance in all places.

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Increase customer awareness about online banking of Janata bank.

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Resolve technological problem by using latest technology.

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

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Making Service charge of online banking as low as possible.

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Provide proper training about online banking to the employees.

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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.

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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.

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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.

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Outsourcing should be done in case of operations like, cyber security department, building IT structure on internet. 

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.

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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.

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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.

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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.

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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.

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5.2 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

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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.

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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 Press Limited Santos, J. (2003), “E-service quality: a model of virtual service quality dimensions”, Management Service Quality, Vol. 13 No. 3, pp. 233-46. Kothari, C.R. (2006), “Research Methodology, Methods and Techniques”, New Age 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 Rashid, M. (2010), “Banking Sector Challenges in Bangladesh”, The Daily Star. BankMarketing, Vol. 29 Iss: 2 pp. 168 – 189. www.academicjournals.org www.bangladesh-bank.org www.bankinfobd.com www.bdresearchpublications.com www.businessdictionary.com www.google.com www.Investopedia.com www.investorwords.com www.janatabank-bd.com www.wikipedia.org

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