Internship Report On: "Online Banking System of Dutch-Bangla Bank LTD."

Internship Report
On
"Online Banking System of Dutch-Bangla Bank Ltd.
-A Case study on Elephant Road Branch
Internship Report
On
"Online Banking System of Dutch-Bangla Bank Ltd.
-A Case study on Elephant road Branch
Supervised By:
Mohammad Saifuddin
Lecturer
Department of Business Administration
Bangladesh University
Prepared By:
Hridoy Chandra Sarker
ID: 201031127090
Batch: 27th
Major: Finance
Program: B.B.A
Dept. of Business Administration
Date of submission: 22 October, 2014
Letter of Transmittal
October 22, 2014

Mohammad Saifuddin
Lecturer
Department of Business Administration
Subject: Submission of Internship Report

Sir,
I am pleased to submit the internship report entitled Online Banking System of DutchBangla Bank Limited -A case study on Elephant Road Branch.
This report is being submitted as a partial fulfillment of the B.B.A. program. For the
preparation of this report I have used both Primary and Secondary sources of information.
The entire report is on my practical experience in the bank. I have furnished the things
what I have learned during the internship program at Dutch-Bangla Bank Limited
( Elephant Road Branch ).
I have tried to give my best effort to gather as much relevant information as possible and
presented it in more positive way as I could. But there may be some limitations. For this
reason, I beg your kind consideration in this regard.
Sincerely yours,
_____________
ID No: 201031127090
Batch: 27th
Major in Finance
Approval of the Head of the Department

October 22, 2014
TO WHOM IT MAY CONCERN

This is to notify that Hridoy Chandra Sarker student of BBA 27 th batch, Department of
Business Administration, Major in Finance, and bearing Id No: 201031127090 has
completed the internship report entitled Online Banking System of Dutch-Bangla
Bank Limited A case study on Elephant Road Branch as a partial requirement for
obtaining BBA degree. He has completed the report himself under my department.
I wish him all the success and a prosperous life.
_____________
Professor Tofail Ahamed
Head of the Department.
Department of Business Administration,
Certification of Supervisor
October 22, 2014
TO WHOM IT MAY CONCERN

This is to certify that, Hridoy Chandra Sarker, Student of BBA, bearing ID no201031127090 under the Department of Business Administration of Bangladesh
University, has completed the Internship Report on the topic entitled- Online Banking
System of Dutch-Bangla Bank Limited A case study on Elephant Road Branch as a part
of the requirement for obtaining BBA degree.
I wish him every success in his future endeavor.
________________________
Mohammad. Saifuddin
Lecturer
Department of Business Administration,
Declaration
I am Hridoy Chandra Sarker a student of BBA, Major in Finance from Bangladesh

University do hereby declare that the internship report on the topic entitled "Online
Banking System of Dutch-Bangla Bank Limited A case study on Elephant Road
Branch is prepared and completed by me under the supervision and guidance of Md.
Saifuddin, Lecturer, Bangladesh University. The report has not been submitted by me
before for any degree, diploma, title or recognition.
___________________
ID: 201031127090
Batch: 27th
Major: Finance
Program: B B A
Acknowledgement
In the process of preparing this report, I received genuine cooperation from number of
individuals whose names are not possible to mention in this report but I would remember
them with my heart felt appreciation and gratitude.
First of all, I am very much grateful to Almighty Goad who gave blessings, courage and
ability to prepare this report. I am very much grateful to Md. Saifuddin, lecturer of the
Department of Business Administration, Bangladesh University, for guiding me to
complete my internship program. I am also highly indebted to him for his scholarly and
constructive suggestion which was of much assistance to prepare this report.
During the course of internship program I have received cooperation from a number of
employees of Dutch-Bangla Bank Limited. Specially, I would like to thank them all for
guiding me to prepare the report.
Executive Summary
Dutch-Bangla Bank Limited (DBBL hereafter) claims itself to be the most innovative and
technologically advanced bank of Bangladesh. Indeed, DBBL stands to give the most
innovative and affordable banking products to its customers. Online banking at per
international standard is yet to be developed in Bangladesh. Online banking, now- adays, has become the demand of time.
Transactions in online banking are performed within closed network for which the
customer use specialized software provided by the respective bank. Online banking
facilities are expanding in Bangladesh. At present, 29 scheduled banks offer any branch
banking facilities through their respective bank online network that provides facilities
like transaction through any branch under the respective bank online network; payment
against pay order or pay order encashment, demand draft encashment, opening or
redemption of FDR from any branch of the same bank; remote fund transfer, cash
withdrawal, cash deposit, account statement, clearing and balance enquiry within
branches of the same bank; and L/C opening, loan repayment facility to and from any
branch of respective bank under its own online network.
This report contains six chapters:
1st chapter (Introduction) includes: Origin of the Report, Objectives of the Study,
Methodology and Limitations of the Study.
2nd chapter (Overview of Dutch-Bangla Bank Ltd.) includes: Background, Organizational
Profile, The Mission Statement, Strategies of the Bank, Goals of the Bank, Business
Objectives of the Bank, Products and Services, Position of Dutch Bangla Bank Ltd. in
the Banking Sector and Corporate Social Responsibility of Dutch-Bangla Bank Ltd
3rd chapter (Banking System at DBBL, Elephant road Branch) includes: Profile and
Departments of DBBL.
4th chapter (Different Aspects of Online Banking) includes: Definition of Online Banking,
Products and Services of Worldwide Online Banking, Features of online banking, History
of Online Banking, Facilities of Online Banking, Threats to Online Banking, Types of

Online Attacks, Countermeasures, Ensuring Security in Online Banking System and
Online Banking vs. Traditional Banking.
5th chapter (Online Banking for Dutch-Bangla Bank Ltd.) includes: Online Banking at
DBBL, Components of Online Banking System of DBBL, DBBL Internet Banking
Features at a Glance, Online Banking System Followed by DBBL, Facilities of Online
Banking at DBBL, SWOT analysis based on the survey, Potential Risks That DBBL May
Face, Comparing DBBL with other Banks and Problems with Online Banking at DBBL.
6th
chapter
(Findings,
Recommendations,
Conclusion)
includes:
Findings,
Recommendations and Conclusion.

The author of the report has the experience regarding the said topics for all about three
months at Dutch Bangla Bank Limited. Based on that experience, some noticeable
observations are: 1) DBBL has a bulk of qualified, experienced and dedicated human
resources 2) DBBL provide Internet Banking 3) DBBL established so many ATM booths
throughout the Country 4) DBBL often has problem with ATM machine.
Though Dutch Bangla Bank has established its image as one of the best service provider
for its potential customers; still they are yet not the market leaders. The bank has to
overcome the shortcomings in the near future. Some recommendations are given based
on the analysis of data. These are: a) Bank should issue or print more brochures and
leaflets with product details with a specific focus on online banking facilities b) A formal
service blueprint should be designed with appropriate service level standards to reduce
the variability of service. These standards should be customer defined and customer
expectation should be considered while deciding on the service standards. Online banking
facilities should be the pioneer one regarding this issue. c) Dutch Bangla Bank should
strictly monitor the courier services that are engaged in delivering mails and documents.
Huge delivery failures are being piled up at branches. So, the bank should have control
over its couriers and ensure proper delivery of mails and documents.
Table of Contents
No.
Topics
Letter of Transmittal
Page
I
Approval of the head of the Department
Ii
Certificate of Supervisor
Iii
Certificate of Internship
Iv
Declaration of student
Acknowledgement
Vi
Executive Summary
Vii
Chapter-1: Introduction
1.1)
1.2)
Origin of the Report

Rationality of the study
01
1.3)
1.4)
1.5)
Objectives of the Study

Methodology
Scope of the study
01
01
1.6)
1.7)
Limitations of the Study

Organization of the study
03
Chapter-2: Overview of Dutch-Bangla Bank Ltd.

2.1)
2.2)
2.3)
2.3.1)
2.3.2)
2.4)
2.5)
2.6)
2.7)
2.7.1)
2.7.2)
2.8)
2.9)
Background
Organizational Profile
The Mission Statement
Vision
Core Objective
Strategies of the Bank
Goals of the Bank
Business Objectives of the Bank
Products and Services
Products of the Bank
Services Offered by DBBL
Position of Dutch-Bangla Bank Ltd. in the Banking Sector
Corporate Social Responsibility of Dutch-Bangla Bank Ltd
Chapter-3: Banking System at DBBL, Elephant road Branch
04
04
06
06
07
07
07
08
09
09
10
11
14
3.1)
3.2)
3.2.1)
3.2.2)
Profile
Departments of DBBL
Customer Service Section
Card Section
15
15
15
15
3.2.3)
3.2.3.1)
3.2.3.2)
3.2.4)
3.2.5)
3.2.6)
3.2.7)
3.2.8)
4.1)
4.2)
4.3)
4.4)
4.4.1)
4.4.2)
4.5)
4.6)
4.7)
4.8)
4.9)
4.10)
5.1)
5.2)
5.2.1)
5.2.2)
5.2.2.1)
5.2.2.2)
5.2.2.3)
5.2.2.4)
5.3)
5.4)
5.5)
5.6)
5.7)
5.7)
5.8)
Clearing and Collection Section

Clearing Section
Collection Section
Retail Section
Cash Section
Remittance Section
Dispatch Section
Personal and Establishment Section
Chapter-4: Different Aspects of Online Banking
16
16
16
16
17
18
18
19
Definition of Online Banking

Products and Services of Worldwide Online Banking
Features of online banking
History of Online Banking
World wide
In Bangladesh
Facilities of Online Banking
Threats to Online Banking
Types of Online Attacks
Countermeasures
Ensuring Security in Online Banking System
Online Banking vs. Traditional Banking
20
21
21
22
22
24
25
27
29
29
30
31
Chapter-5: Online Banking for Dutch-Bangla Bank Ltd.

Online Banking at DBBL
Components of Online Banking System of DBBL
Any Branch Banking
Delivery Channels
ATM Booths
POS terminals
Internet banking
SMS & Alert Banking
DBBL Internet Banking Features at a Glance
Online Banking System Followed by DBBL
Facilities of Online Banking at DBBL
Problems with Online Banking at DBBL
Potential Risks That DBBL May Face
33
34
34
35
36
37
37
38
38
40
41
42
43
Comparing DBBL with other Banks

SWOT analysis based on the survey
49
52
Chapter-6: Findings, Recommendations, Conclusion

Findings
54
Recommendation
Conclusion
55
56
Chapter 1
INTRODUCTION
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Origin of the report

Rationality of the study
Objectives of the Study
Methodology
Scope of the study
Limitations of the Study
Organization of the study
1.1) Origin of the Report:

This report is an Internship Report prepared as a requirement for the completion of the
B.B.A. program under the Discipline of Finance from Bangladesh University. I am,
Hridoy Chandra Sarker , was placed at Dutch-Bangla Bank Ltd. Elephant Road Branch,
for the internship program under the guidance of my supervisor Mr. Md. Saifuddin. The
duration of my organizational attachment was three months.
1.2)Rationality of the Report:

This report is being assigned as a part of the Degree BBA. Internship is a part of the BBA
program of the Department of Business Administration of Bangladesh University (B U)
Here, one report is necessary to justify my work in internship. To prepare this report
under the shape of Universitys requirement, I accommodate my internship program in
Dutch Bangla Bank Ltd. (DBBL). At the very beginning of my internship I have studied
different functional departments of the Bank. By going through all the departments I have
achieved lots of personal experience, so in this report I shared Online Banking System of
Dutch-Bangla Bank Ltd.
Identification of problems and related recommendations might help the employees of the
bank to adopt new ways of approaching the customers and even the management could
know about their areas for improvement. This study is also one of the crucial parts of my
BBA program. Our BBA program is a complete blend of theoretical and practical
knowledge which help us to define and develop our career.
1.3) Objectives of the Study:

The objectives of this paper are:
Presenting a brief view of the Bank and its operations from the viewpoint of a
neutral onlooker.
To analyze the banks performance on the ground of online banking.
To identify the strengths and weaknesses of online banking system of Dutch

Bangla Bank Ltd. and its importance in the bank.
To analyze the market position of DBBL, with respect to online banking.
1.4) Methodology:
Any data can be classified as primary or secondary based on its available sources.
Primary data is a term for data collected on source which has not been subjected
to processing or any other manipulation. Secondary data is data collected by
someone other than the user. Common sources of secondary data for social
science include censuses, surveys, organizational records and data collected
through qualitative methodologies or qualitative research. Secondary data can be
obtained from two different research strands:
Quantitative: Census, housing, social security as well as electoral statistics
and other related databases.
Qualitative: Semi-structured and structured interviews focus groups
transcripts, field notes, observation records and other personal, researchrelated documents.
The data for this study was gathered from both the sources. Primary data is gathered
thorough observation and learning experience.
Secondary data sources involve the extensive use of financial statements and website of
DBBL to accomplish the aforesaid research objectives. The annual data for the selected
bank from the year 2004 to 2012 are used make the report informative. Other secondary
sources are: relevant books, magazines, journals, newspapers, and websites.
SWOT analysis of the bank has been done to judge the strengths and weaknesses
of the bank.
The whole processing of the report required a systematic approach. The flow chart below
shows the overall methodology followed:
Selecting the Topic
Identifying Data Sources
Collection of Data
Classification and Analysis of Data
Findings of the Study
Final Report Compilation
1.5) Scope of the Study:

There were huge scopes to work in the area of the study. The scope of the report
encompasses the areas covered by "Online Banking System of Dutch-Bangla
Bank Ltd A case study on Elephant Road Branch. It includes Account Opening,
Account Closing, Remittance, Payment Order Issue, Demand Draft Issue/Collection, and
also includes Accounts department which departments covers Cash, Transfer and
Clearing section.
1.6) Limitations of the Study:

Like any other study this study is also not without its limitations. While conducting the
survey some of the interviewee didnt answer one or two questions due to their
unawareness or inability. Thus data insufficiency in some respect is a shortcoming of this
report. The time to prepare a report on such an important analytical topic was not
sufficient and the experience, exposure and knowledge of the preparer were not sufficient
to explain such an important issue with utmost professionalism.
1.7) Organization of the study:

This report includes six chapters where all the chapters have distinguished objectives to
be performed. The first chapter, introduction, explain mainly the purpose, scope and
limitation of the study. The 2nd chapter presents the DBBL background and various
aspects. The 3rd chapter highlights the banking system at DBBL, elephant road branch.
The 4th chapter highlights different aspects of online banking. The 5th chapter highlights
online banking system of DBBL. The 6th chapter highlights findings recommendation and
conclusion.
This was a great pleasure for me to get such an opportunity to work in prime bourse of
the country and offered another chance for me to approach different department to know
verity operational procedure of DBBL and easy to collect data and enhanced my
knowledge for this topic.
Chapter 2
Overview of Dutch-Bangla Bank Ltd.
2.1) Background:
2.2) Organizational Profile:
2.3) The Mission Statement:
2.3.1) Vision:
2.3.2) Core Objective:
2.4) Strategies of the Bank:
2.5) Goals of the Bank:
2.6) Business Objectives of the Bank:
2.7) Products and services:
2.7.1) Products of the Bank:
2.7.2) Services Offered by DBBL:
2.8) Position of Dutch-Bangla Bank Ltd. in the Banking Sector:
2.9) Corporate Social Responsibility of Dutch-Bangla Bank Ltd:
2.1) Background:
Dutch-Bangla Bank Limited (DBBL hereafter) claims itself to be the most innovative and
technologically advanced bank of Bangladesh. Indeed, DBBL stands to give the most
innovative and affordable banking products to its customers. Having passed almost 17
successful years of leading banking service it even stands as one of the largest private
donors involved in improving the country and its people. DBBL is proud to be associated
with helping the people of Bangladesh by its social welfare activities along with the
banking services. The banking products and services it offers have both uniqueness and
affordability. Being the largest bank in respect of Automated Teller Machines (ATM
hereafter) booths and Point of Sales (POS hereafter) Dutch Bangla Bank has acquired a
distinguished position in the country as a preacher and pioneer of mass banking.
2.2) Organizational Profile:

Dutch-Bangla Bank started as Bangladesh's first joint venture bank. The bank was an
effort by local shareholders spearheaded by M. Sahabuddin Ahmed (founder chairman)
and the Dutch company FMO. Dutch-Bangla Bank Limited is a Bangladeshi-European
joint venture scheduled bank with equity participation from the Netherlands Development
Finance Company. It started banking operations in Bangladesh on 3rd June, 1996. The
authorized, issued, subscribed and fully paid up capital of the bank is BDT 1000 million.
The paid up capital represents the face value of 10 million ordinary shares of BDT 100.00
each. The sponsor shareholders paid BDT 180 million for 1.8 million of ordinary shares.
The rest is the sum of collection through IPO and bonus shares awarded in 2007. The
deposit grew by 24.5% in 2012 from BDT 100,711.0 million to BDT 125,433.1 million.
Deposit mix improved significantly, as a result weighted average cost of fund declined to
10.9% in 2012 from 9.9% in 2011.
An 8-member board of directors comprising a chairman and four representatives from

local sponsors and three representatives from the Netherlands Development Finance
Company oversees the management of the bank. The managing director is appointed by
the board with the approval of Bangladesh bank. As on 31 st December 2012, the bank had
126 branches in different parts of Bangladesh.
DBBL was the first bank in Bangladesh to be fully automated. The Electronic-Banking
Division was established in 2002 to undertake rapid automation and bring modern
banking services into this field. Full automation was completed in 2004 and thereby
introduced plastic money to the Bangladeshi masses. DBBL also operates the nation's
largest ATM fleet and in this process drastically cuts consumer costs and fees by 80%.
Moreover, it has chosen the low profitability route for this sector that surprised many
critics. DBBL had pursued the mass automation in banking as a CSR activity and never
intended profitability from this sector. As a result it now provides unrivaled banking
technology offerings to all its customers. Because of this mindset, most local banks have
joined DBBL's banking infrastructure instead of pursuing their own.
Even with a history of hefty technological investments and an even larger donation,
consumer and investor confidence has never waned. Dutch-Bangla Banks stock set the
record for the highest share price in the Dhaka Stock Exchange in 2008.
The bank conducts all types of commercial banking activities including customer services
related to local and foreign remittances but its core business is trade financing. It also
extends short and medium-term loans to industrial undertakings on a limited scale.
Innovative products on credit and deposit scheme introduced by the bank are commission
free remittance, the 'Money Plant' scheme, monthly term deposits, one and a half times a
year scheme (BDS), small credit facilities for shop owners, small-scale taxi cab loans,
small-scale transport loans and consumer credit. The bank has correspondent
relationships with 17 foreign banks.
DBBL aims to provide its customers the latest banking technology and delivery channels
to provide seamless banking facilities to its valued customers through continuous
development of its technology. It gives high emphasis for the safeguard against any
disaster situation in order to continue the operation, where it has two servers one as
main server and other as backup server. The backup server is being updated every second.
The Bank has the largest ATM network in the country comprising of 2,366 ATM units,
4,612 POS units and 235 units of Fast Track on 31st December, 2012.
From the onset, the focus of the bank has been financing high-growth manufacturing
industries in Bangladesh. The rationale being that the manufacturing sector exports
Bangladeshi products worldwide. Thereby financing and concentrating on this sector
allows Bangladesh to achieve the desired growth. In addition to its banking activities,
Dutch-Bangla Bank Limited takes part in different national activities promoting sports,
culture, social awareness, etc. Participation in these activities as sponsors is part of its
business development policy. DBBL's other focus is Corporate Social Responsibility
(CSR). Even though CSR is now a cliche, DBBL is the pioneer in this sector and termed
the contribution simply as 'social responsibility'. Due to its investment in this sector,
DBBL has become one of the largest donors and the largest bank donor in Bangladesh.
The bank has won numerous international awards because of its unique approach as a
socially conscious bank.
2.3) The Mission Statement:

A Mission Statement is an organizations formalized statement that expresses its purpose
and reason for existing also describing its basic philosophy. The mission statement of
DBBL is Your Trusted Partner that reflects the commitment by the bank to stand
beside its customers, anytime, anywhere.
2.3.1) Vision: Vision defines a desired future and helps guide all who accept
and understand it. Dutch-Bangla Bank dreams of better Bangladesh, where arts and
letters, sports and athletics, music and entertainment, science and education, health and
hygiene, clean and pollution free environment and above all a society based on morality
and ethics make all our lives worth living. DBBL's essence and ethos rest on a cosmos of
creativity and the marvel-magic of a charmed life that abounds with spirit of life and
adventures that contributes towards human development.
2.3.2) Core Objective: Dutch-Bangla Bank believes in its uncompromising

commitment to fulfill its customer needs and satisfaction and to become their first choice
in banking. Taking cue from its pool esteemed clientele, Dutch-Bangla Bank intends to
pave the way for a new era in banking that upholds and epitomizes its Vaunted Marques
"Your Trusted Partner"
2.4) Strategies of the Bank:

The major strategies of the bank are outlined below:
Synchronized and steady growth of the bank
Utilizing all available resources to develop various plans, policies and

procedures in each of the objective and goal areas.
Implementation of the plans, policies and procedures.
Draw upon the connections, advice, etc. of the foreign partners.
Utilize a team of professional employees.
Search for a total customized solution of I.T. for the purpose of full
automation step by step.
2.5) Goals of the Bank:

The different goals of the bank are to develop:
A realistic deposit mobilization plan.
An appropriate lending risk assessment system.
Capital plan.
A system to make good advances.
A recruitment, compensation, training and orientation plan.
A plan for offering better customer services.
An appropriate management structure, system, procedures and approaches.
A scientific MIS to monitor Banks activities.
2.6) Business Objectives of the Bank:
Building a low cost fund base.
Making sound loans and investments.
Meeting capital adequacy requirement at all the time.
Ensuring 100% recovery of all advances.
Ensure a satisfied work force.
Focusing on fee-based income.
Adopting appropriate management technology.
Installing a scientific MIS to monitor banks activities.
The managerial hierarchy followed by DBBL is given below:

Managing Director
Deputy Managing Director
Senior Executive Vice President
Executive Vice President
Senior Vice President
First Vice President
Vice President
Senior Assistant Vice President
First Assistant Vice President
Assistant Vice President
Senior Executive Officer
Executive Officer
Senior Officer
Officer
Assistant Officer
Trainee Officer
2.7) Products and services:

Being a financial institution, the bank offers various types of financial products and
ancillary services to its customers. Below is the brief listing of all DBBL products and
services:
2.7.1) Products of the Bank: DBBL offers a bunch of banking products to

its customers. These products are designed to suite everyones affordability. It has
extended its hands by introducing products for housewives, students, service holders,
business persons and what not! The products are:
Regular Deposit Schemes:
Savings Deposit Account
Current Deposit Account
Short Term Deposit Account
Resident Foreign Currency Deposit
Foreign Currency Deposit
Convertible Taka Account
Non-Convertible Taka Account
Exporter's FC Deposit (FBPAR)
DBBL Deposit Plus Scheme (DPS)
DBBL Bochore Dergun Scheme (BDS)
DBBL Children Education Savings Scheme (CHESS)
DBBL Pension plus Scheme (PP)
DBBL Pension Benefit Scheme (PBS)
Term Deposits:
6 Months TD NFCD
Term Deposit 3 Months
1 Month TD NFCD
3 Months TD NFCD
Monthly Term Deposit

Loan & Advances:
The related products are:
Loan against trust receipt
Transport loan
Consumer credit scheme
Real estate loan (Res. & Comm.)
Loan against accepted bill
Industrial term loan
Agricultural term loan
other term loans
Lease finance
Life line (a complete series of personnel credit facility)
FMO local currency loan for SME
FMO foreign currency loan
Cash credit (Hypothecation)
Small shop financing scheme
Overdraft
2.7.2) Services Offered by DBBL: DBBL gives different ancillary services

to its customers. It delivers the debit card of the customers through courier services to
their mailing addresses. Five courier services are active and engaged at Dhaka to deliver
the cards to the respective addresses. If any cardholders address is not found, then the
card is returned to the respective branch and the customer can always collect it from the
branch.
The ATM booths are, perhaps, the largest ancillary service provided by the bank. It now has over
eight hundred booths throughout the country and the number is still increasing. It has established
ATM booths at different places. Besides the regular booths, it also offers six mobile ATM
booths humming around the corners of the cities like Dhaka and Chittagong at different
points. Almost 50 booths have deposit facility. One can use ATM booths a maximum of 5
times a day with the lowest withdrawal of BDT. 500.00 and the highest withdrawal of
BDT. 50,000.00 a day.
The bank gives the option of using internet banking and SMS alerts for the customers.
They can always enable the options by just filling the Customer Options Form and
anytime can disable it also. Enabling the internet banking and/ or the alert banking will
cost the customers a minimum cost per year which is obviously affordable.
2.8) Position of Dutch-Bangla Bank Ltd. in the Banking Sector:

As on 29th June, 2011, Credit Rating Agency of Bangladesh (CRAB) Limited has
assigned A1 (Pronounced Single A One) rating in the Long Term and ST-2 in the Short
Term to Dutch-Bangla Bank Limited in view of the performance of the Bank for the
business year 2012.
Commercial banks rated in the long term A1 belong to Strong Capacity & High Quality
Cohort. Banks rated A1 have strong capacity to meet their financial commitments but are
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions. A1 is judged to be of high quality and is subject to low credit risk.
Commercial banks rated in the short term ST-2 category are considered to have the strong
capacity for timely repayment of obligations. Banks rated in this category are
characterized with commendable position in terms of liquidity, internal fund generation,
and access to alternative sources of funds. Dutch-Bangla Bank Limited started its
banking business in June 1996. Banks paid up capital stood at BDT 2,000.0 million in
2012. Banks paid up capital and statutory reserve stood at BDT 4,621.0 million at the
end of 2012. Capital adequacy ratio declined from 11.2% in 2011 to 12.0% in 2012.
However the implementation of Basel II will require more capital to ensure the solid
position of the Bank. Total loan and advances of DBBL stood at BDT 91,648.9 million in
2012 which was BDT 79,660.7 million in 2011 registering a growth of 64.6%, after a
15.0% decline in loan portfolio in 2011. Total outstanding loans in these accounts were
38.34% of the portfolio. The outstanding loans in SMA increased to 2.98% of total
portfolio in 2012 which was only 0.23% in 2011. If the Bank fails to manage and reduce
the level of non-performing loans in portfolio, its business and financial strength may be
adversely impacted. The deposit mobilization of Dutch-Bangla Bank Limited reported
24.5% increase in 2012 after a slow growth in 20011 (1.25%) and stood at BDT
125,433.1 million which was BDT 100,711.0 million in 20011. DBBL has deep customer
base gained through its large network (126 branches and 2,366 ATMs, as on 20012)
which provides the Bank relatively stable deposit base. The less dependency on borrowed
fund with declining trend (five-year period ended average was 2% of total funding) and
more concentration on deposit mobilization indicates the future stability of the Bank.
From the analysis of asset-liability management and maturity profile of deposit and call
market operations it was found that the sound liquidity management system of DBBL
would help the Bank to resist immediate liquidity shock. Net interest income dominated
the revenue stream with a rate less than 50% over the last eight years except 2005
(52.21%) resulting an average rate of 48.17% during the above mentioned period
revealing stable and good quality earning of the Bank. DBBL reported operating income
of BDT 11,293.6 million in 2012, which was BDT 9,090.5 million in 2011 registering a
growth of 24.2%. DBBLs operating expenses as a percent of total assets (avg.) were
slightly high compared to that of most of the private commercial banks including its peer
group over the observed period. The increasing trend of cost could be primarily attributed
to its business expansion, establishment of new distribution channels including largest
ATM network which will eventually raise the Banks smooth earnings flow in the
upcoming year.
DBBL strives to provide the latest banking technology and delivery channels to provide
seamless banking facilities to its valued customers through continuous development of its
technology. The Bank gives high emphasis for the safeguard against any disaster situation
in order to continue the operation, where it has two servers one as main Server and
other as backup server. The Bank stills the largest ATM network in the country
comprising of 2,366 ATM units and 4,612 units of POS terminals 235 Fast Tract (by end
of year, 2012). The Bank has formed a separate ICC Division segregated into Audit &
Inspection unit, monitoring unit and Compliance unit, though the ICC function was found
to be constrained with manpower shortage.
In 2012, the bank was given B rating in the CAMELS rating by the regulatory agency.
The rating indicates satisfactory performance, but many of its competitors were given A
rating that indicates strong performance.
2.9) Corporate Social Responsibility of Dutch-Bangla Bank Ltd:

Amongst banks, especially amongst Private Commercial Banks, DBBL is the largest
donor in to social causes in Bangladesh. From the inception, DBBL has always stood
beside the people of Bangladesh with its CSR activities. It has contributed to bring about
improvements on educational activities as well as promoted events like International
Mathematical Olympiad and International Informatics Olympiad. Here are some of the
recent examples chosen from a wide arena of CSR activities of the bank:
On June 3, 2009, DBBL donated BDT 11.476 million to icddr, b. On June 23, 2009, it
handed over the Commitment Letter of donating Tk. 2.00 crore to Professor A. F. M.
Ruhul Haque, the honorable Minister for Health & Family Welfare for constructing the
4th floor of OGSB hospital building. It has also donated Tk. 15.00 lac for purchasing
academic reference books for Bangabandhu Sheikh Mujib Medical University
(BSMMU).
On 2013, Dutch-Bangla Bank awarded scholarships to 2,030 meritorious and needy
students who passed HSC Examination in 2012 and currently studying at graduate level.
Like this event, DBBL has always stood beside the meritorious but poor students to ease
the hurdles they face on the event of their education. It has awarded scholarships on a
regular basis for those SSC and HSC passed students who are needy. The bank especially
stands beside students who are physically handicapped and the female students. This year
the bank started to award fellowships to students who want to pursue M.Phil, Doctoral
and Post Doctoral Degrees. Besides it has been contributing to institutions like BUET,
University of Dhaka, Bangladesh Agricultural University and BSMMU to purchase
educational equipments and books.
DBBL has also stood beside the acid victims by donating Acid Survivors Foundation. It
regularly organizes plastic surgeries for the children who have problems in their physical
and facial structure and cataract operations for destitute people.
Chapter 3
Banking system at DBBL, Elephant Road Branch
3.1) Profile
3.2) Departments of DBBL
3.2.1) Customer Service Section
3.2.2) Card Section
3.2.3) Clearing and Collection Section
3.2.3.1) Clearing Section
3.2.3.2) Collection Section
3.2.4) Retail Section
3.2.5) Cash Section
3.2.6) Remittance Section
3.2.7) Dispatch Section
3.2.8) Personal and Establishment Section
3.1) Profile:
DBBL Elephant Road Branch is a Non-AD branch by nature. The term AD describes Authorized
Dealers i.e. banks that have the authority to deal in and with foreign currency. The branch is not a
dealer of foreign currencies and hence it performs activities related to retail banking and general
banking services and the common ancillary services. The divisions of the branch are given below:
3.2) Departments of DBBL:

Customers Service Section
Card Section
Clearing & Collection Section
Retail Section
Cash Section
Deposit Section
Dispatch Section
Personal & Establishment Section
3.2.1) Customer Service Section: Basically this section is to help the

customers and forward them to their needful. It also refers the customers to the concerned
personnel and answers their queries. Most of the time, it deals with opening of different
types of accounts. It is also deals with issuing of check book and different deposits book
to the different accounts opener. A customer can open different types of accounts through
this department such as:
Current account
Savings account
Fixed deposits account
Monthly depository schemes
Special deposits schemes
3.2.2) Card Section: This section deals with issuance of pin numbers for the
debit cards, forwarding of credit cards and solving different complaints and queries of the
customers. It also deals with issues like lost/stolen cards or capture cards. Debit card
service is the specialty of Dutch-Bangla Bank LTD. It offers different types of debit card
services such as DBBL-NEXUS (regular) card, DBBL-NEXUS Maestro card, DBBLNEXUS VISA Electron card, DBBL-NEXUS Silver OD card & DBBL-NEXUS Gold
OD card.
3.2.3) Clearing and Collection Section: This section deals with the
collection and payment of instruments like pay order, cheque, warrant etc. i.e. the noncash instruments. It settles all the inward and outward bill collection and payment
procedures.
3.2.3.1) Clearing Section: If a cheque, PO, DD, PS of a bank comes

from another bank within the purview of the local clearing house it is sent for collection
through clearing house to the respective branch. The DBBL, Elephant Road Branch deals
with clearing house on like of all branches within the range of the local clearing house. It
collects all kinds of instruments on behalf of customers and sends it to the local office of
DBBL. The local office then sent it to the respective branch for collection. It also deposits
all kinds of instruments to the clearing house for collection on behalf of all branches.
3.2.3.2) Collection Section: The clearing and collection transactions

are handled in various ways:
o Outward clearing cheque
o Inward clearing cheque
o OBC (Outward Bill Collection)
o LBC ( Local Bill Collection )
o IBC ( Inward Bill Collection)
3.2.4) Retail Section: This section deals with loans and advances related
activities. Advances are deposits which are made with the bank for a fixed period
specified in advance. The banks do not maintain cash reserves against these deposits and
therefore the bank offers higher rates of interest on such deposits. These deposits
generally constitute 50% or more of the total deposits. Usually customers are allowed to
open this account for a certain period. The rate of interest varies in accordance with the
terms of the deposit.
The retail division also gives lone to the customer. Demand loan, Letter of Credit, Import
loan Home loan, Health loan, Festival lone, Car lone, Education loan etc are given to the
customer. While applying for loan customers would need to carry supporting documents
like trade license, articles of association and memorandum, total investment details,
product details, sales and marketing plan (details of main buyers), details of imported
items and main suppliers, CIB undertaking of all directors, management details, bank
account statement for the past one year, details of master LCs & BB LCs for the past one
year etc.
3.2.5) Cash Section: There are five counters that work simultaneously in cash
section of DBBL, Elephant Road Branch. Electronic counting machines are used so that
huge amount of cash can be counted in minutes. This branch also allows evening hour
transaction only in case of deposit of money.
The work of cash receiving counter is examining and receiving deposit slips placed with
cash. Depositor will use the prescribed deposit slip supplied by the bank to deposit cash.
After checking all the necessary details like whether the title of the account and account
number is given or not, the amount in figure and in words is same or not, whether the slip
is signed by the depositor and the date is written, the teller will accept cash against its
deposit slip. He/she would, then, place the cash in the cash drawer according to
denominations. The teller will place sign and affix cash received rubber stamp and
return the customers copy to the customer.
In case of cash withdrawal, if the cheque placed has no defect and it is payable, the
officer in charge signs the cheque affixing signature verification seal along with his/her
initial and cancels the cheque by striking it with pen. The cash officer/s would then hand
over the payment to the appropriate payee.
3.2.6) Remittance Section: Banks have a wide network through the

branches all over the country and thus offer different procedure of delivering remittance
to the recipient public. The remittance is delivered or distributed by DBBL is done using
different methods. These are:
Demand drafts
Pay order
Pay slip
Mail transfer
Telegraphic transfer
Remittance through different listed exchange houses
Remittance through Western Union, Janata Express, Express Money etc.
3.2.7) Dispatch Section: Dispatch is a procedure for assigning employees

(workers) or vehicles to customers. Industries that dispatch include taxicabs, couriers,
emergency services, as well as home and commercial services such as maid services,
plumbing, HVAC, pest control and electricians. At DBBL, dispatch means receiving and
delivery of documents from the branch to other branches, head office or to local office of
the bank. There are two types of dispatch maintained by the dispatch section:
Dispatch of Letter
Dispatch of Telegram
For convenience of work despatch of letter has been classified into two groups mainly:
Inward Mail
Outward Mail
Outward mail is again classified into:

Ordinary Letter
Registered Letter/Registered Parcel
Each branch will maintain a deposit account with the local telegram office to which the
amount of initial deposit will be paid by debiting to the Charge Account under advice to
accounts division where a record of all such deposit paid by branches are maintained. The
receipt for the deposit will be recorded in the branch document register and retained with
other documents
3.2.8) Personal and Establishment Section: This section is under general

banking department. The function of the Personal and Establishment section is as
follows:
Supply of office stationary and furniture & fixture
Maintenance of all fixed assets
Placement, transfer, promotion letter issuing to the employees
Correspondence with different department and executives
Maintenance of stores
Preparation of expense bill for all kind of expenses
Maintenance of all expenditure register
Chapter 4
Different Aspects of online Banking
4.1) Definition of Online Banking
4.2) Products and Services of Worldwide Online banking
4.3) Features of online banking
4.4) History of Online Banking
4.4.1) World wide
4.4.2) In Bangladesh
4.5) Facilities of Online Banking
4.6) Threats to Online Banking
4.7) Types of Online Attacks
4.8) Countermeasures
4.9) Ensuring Security in Online Banking System
4.10) Online Banking vs. Traditional Banking
4.1) Definition of Online Banking:

The definition of online banking varies amongst researchers partially because it refers to
several types of services through which a bank customer can request information and/or
carry out most retail banking services via computer, television or mobile phone (Daniel
1999; Molls 1998; Sathye 1999). Burr (1996) describes e-banking as an electronic
connection between the bank and customer in order to prepare, manage and control
financial transactions. On the other hand, Leow, Hock Bee (1999) state that the terms PC
banking, online banking, internet banking, telephone banking or mobile banking refers to
a number of ways in which customer can access their banks without having to be
physically present at the bank branch. The EBG of the Basel Committee on Banking
Supervision3 (July 2003) noted that continuing technological innovation and competition
among existing banking organizations and new entrants have allowed for a much wider
array of banking products and services to become accessible and delivered to retail and
wholesale customers through an electronic distribution channel collectively referred to as
e-banking or online banking. Commonly, online banking or internet banking is that
service which allows customers to conduct financial transactions on a secure website
operated by their retail or virtual bank, credit union or building society.
Typically, online banking is a service offered by banks that allows account holders to
access their account data via the Internet. In order to take advantage of online banking, an
account holder would need to meet several technological requirements, such as having a
personal computer with internet access and web browser. If those conditions are satisfied,
online banking can be performed from anywhere in the world. Online banking is
designed to streamline banking chores that otherwise require considerable time and
effort. Thus, online banking facilitates direct access to account details, enables transfer of
funds, allows for multiple bills payments, and performs an array other transactions.
Online banking is available twenty four hours, seven days a week, regardless of the
banks working hours. Today, most banks offer online banking services.
In Bangladesh, the definition took a bit narrower form. DBBL describes online banking
as the free flow of deposit and withdrawal of cash and non-cash instruments at DBBL
branches all over the country. In foreign countries where fund transfers within the
branches of any bank or inter-bank transactions are allowed, Bangladesh is a long way
back to that system.
4.2) Products and Services of Worldwide Online banking:

Internet banking products and services can include wholesale products for corporate
customers as well as retail and fiduciary products for consumers. Ultimately, the products
and services obtained through Internet banking may mirror products and services offered
through other bank delivery channels. Some examples of wholesale products and services
include:
Cash management.
Wire transfer.
Automated clearinghouse (ACH) transactions.
Bill presentment and payment.
Examples of retail and fiduciary products and services include:
Balance inquiry.
Funds transfer.
Downloading transaction information.
Bill presentment and payment.
Loan applications.
Investment activity.
Other value-added services
4.3) Features of online banking:
Online banking solutions have many features and capabilities in common, but
traditionally also have some that are application specific. But the common features fall
broadly into several categories that are stated here under:
Transactional (e.g., performing a financial transaction such as an account to
account transfer, paying a bill, wire transfer and applications, apply for a loan,
new account, etc.)
o Electronic bill presentment and payment EBPP
o Funds transfer between a customer's own checking and savings accounts,
or to another customer's account
o Investment purchase or sale
o Loan applications and transactions, such as repayments
Non-transactional (e.g., online statements, check links, co-browsing, chat)
o Bank statements
o Financial Institution Administration
o Support of multiple users having varying levels of authority
o Transaction approval process
o Wire transfer
Features commonly unique to Internet banking include: personal financial management
support, such as importing data into personal accounting software. Some online banking
platforms support account aggregation to allow the customers to monitor all of their
accounts in one place whether they are with their main bank or with other institutions.
4.4) History of Online Banking:

Online banking has seen almost thirty years since its introduction during the early 80s. In
this section we will look back to the evolution of online banking worldwide, and also in
Bangladesh.
4.4.1) World wide: The precursor for the modern home online banking
services were the distance banking services over electronic media from the early '80s.
The term online became popular in the late '80s and referred to the use of a terminal,
keyboard and TV (or monitor) to access the banking system using a phone line. Home
banking can also refer to the use of a numeric keypad to send tones down a phone line
with instructions to the bank. Online services started in New York in 1981 when four of
the citys major banks (Citibank, Chase Manhattan, Chemical and Manufacturers
Hanover) offered home banking services using the videotex (see appendix) system.
Because of the commercial failure of videotex, these banking services never became
popular except in France where the use of videotex (see appendix). Minitel (see
appendix) was subsidized by the telecom provider and the United Kingdom (UK
hereafter), where the Prestel system was used.
The UKs first home online banking services were set up by the Nottingham Building
Society (NBS) in 1983. The system used was based on the UK's Prestel (see appendix)
system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400)
connected to the telephone system and television set. The system (known as 'Homelink')
allowed on-line viewing of statements, bank transfers and bill payments. In order to make
bank transfers and bill payments, a written instruction giving details of the intended
recipient had to be sent to the NBS who set the details up on the Homelink system.
Typical recipients were gas, electricity and telephone companies and accounts with other
banks. Details of payments to be made were input into the NBS system by the account
holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving
details of the payment was sent to the account holder. BACS was later used to transfer the
payment directly.
Stanford Federal Credit Union was the first financial institution to offer online internet
banking services to all of its members in Oct, 1994. According to internet world bank,
worlds top internet banks are:
Net Bank
ING Direct
First Internet Bank of Indiana
Juniper Bank
Virtual Bank
First-E
American Bank Online
Griffon Bank
Bank of Internet USA
National Inter Bank
Nexity Bank
E Trade Bank
Umbrellabank.com
DirectBanking.com
Deep green
American Express
Wells Fargo Online Banking
Am Trust Direct
Waterhouse National Bank
4.4.2) In Bangladesh: Dutch Bangla Bank Ltd. is probably, the pioneer of what
is called online banking today, in Bangladesh. It is the first bank in Bangladesh to be fully
automated and introduce Electronic Banking that has become online banking today. The
automation was completed in 2003, but further additions and features are continuously
being added and upgraded. May other banks are using online banking now, but they are
following partial online system. Among the PCBs, DBBL is probably the only bank to
use fully automation known as core banking. The foreign commercial banks, off course,
offer online banking. But the prevailing system in Bangladesh is partial online by nature
due to some restrictions imposed by Bangladesh Bank. According to the news published
in The Daily Prothom-Alo 0f 3rd November, 2009, Bangladesh Bank has allowed the
banks to conduct online transfers of funds within any account maintained with that bank.
For allowing this to happen, inter-branch transfer of money is possible now; and
Bangladesh Bank going to start inter-bank transfers in the near future. For this purpose, a
central gateway is being formulated. This step is a milestone for the journey of
Bangladeshi banks towards full automation.
Still almost all private commercial banks and some nationalized commercial banks are
trying to follow the Bangladeshi form of online banking. The local banks that offer online
banking are listed below:
Bangladesh Bank
Bank Asia Limited
Bank of Tokyo-Mitsubishi Ltd.
Citibank N.A.
Eastern Bank Ltd
Habib Bank Ltd.
HSBC Bangladesh
Islami Bank Bangladesh Limited
Jamuna Bank Limited
Janata Bank
Mercantile Bank Limited
Prime Bank Limited
Southeast Bank Limited
Standard Bank Ltd.
National Bank Ltd.
Standard Chartered Bank Bangladesh
The City Bank Limited
United Commercial Bank Limited
Uttara Bank Limited
BRAC Bank Ltd.
World Bank Bangladesh Office
4.5) Facilities of Online Banking:

In a commercial world surrounded by highly competitive and volatile market condition,
any new concept of technology would be acceptable only if it provides strong benefits to
all concerned. Financial institutions like banks are service oriented and simultaneously
require safety, security and utmost attention on the part of the organization to make
profits. The reason behind the wider acceptance of automation system and growing use of
technology in banking is that it offers some distinct advantages over the traditional
system. These are:
Profitability:
An online banking website can significantly reduce the cost related to customer
service and ancillary services, which can strongly improve the bottom line of an
organization.
Expanded market share:
With the help of online products, customers could be attracted as they make the
transactions easy to reach and reduces the necessity of face to face banking. Thus
increased customers naturally indicate better growth of the organization and
growth indicates larger market share.
Shortens time of the customer:
In online banking, a prospective customer can take a look at all the products and
services offered by the bank or banks whenever s/he wants. Even s/he can
compare between the services, promotional offers, products and their service
charges applicable of different banks to take a better decision. It gives flexibility
and security, reduces information gap, enables comparability, eases transactions
and obviously minimizes loss of time.
Cost Efficiencies:
Banks can deliver banking services on the internet at transaction costs far lower
than traditional brick-and-mortar branches. The actual costs to execute a
transaction will vary depending on the delivery channel used. For example,
according to Booz, Allen & Hamilton, as of mid- 1999, in USA, the cost to
deliver manual transactions at a branch was typically more than a dollar, ATM
and call center transactions cost about 25 cents, and Internet transactions cost
about a penny. These costs are expected to continue to decline even in a country
like Bangladesh.
Branding:
Relationship building is a strategic priority for many banks. Internet banking

technology and products can provide a means for banks to develop and maintain
an ongoing relationship with their customers by offering easy access to a broad
array of products and services. By capitalizing on brand identification and by
providing a broad array of financial services, banks may hope to build customer
loyalty, cross-sell, and enhance repeat business.
Overseas transactions:
Online banking enables its customers to overcome the barrier of place and time.
Any time a customer can access the website and pursue his/her needs from
anywhere in the world through the use of internet.
Improved customer service:
Through online banking system, a customer doesnt have to stand in the queue
and wait for his/her turn. Using 24 hour internet helplines a customer can make
any query about the bank or its products and services or place complaints. These
options give the customer satisfaction and improve the overall quality of
customer service by reducing the customer load at banks.
Safety and Security:
Online transactions like fund transfer offers the customer security and safety. Now
they do not need to carry huge amount of cash and give it to their parties. Just one
click and the money are transferred to the partys bank account. This ensures
secured transactions and reduces risks.
The facilities of online banking are thus multifarious. Due to those facilities the system is
getting increased popularities all over the world.
4.6) Threats to Online Banking:

The security of global online banking is being tested like it's never been tested before. A
number of recent incidents have made the news in which mostly small businesses have
lost tens of thousands of dollars to overseas cyber crooks. Many of the scenarios are
being played out in a similar fashion. A targeted, socially-engineered email arrives at a
business or other organization, such as a school district. A gullible employee opens it and
installs a pernicious, difficult-to-detect Trojan, such as Zeus or Clampi, which sits quietly
on the infected desktop until that employee visits the company's online bank site. At this
point, the malware lifts username and password, sends it back to the attacker, who
quickly wires money out of the victim's account to his/her bank account and the rest is
pretty much history. This is because the global online banking allows inter-bank money
transfer; electronically.
What makes these attacks interesting is that apparently such technologies as tokens are
not helping much. The attackers have created a slick scheme so that when the user visits
the bank site, he or she is greeted with a fake login screen. Not sensing the page is a fake,
the victim will give up his or her username and password (and one-time token or other
second-factor, if applicable). The crooks will capture these details in real time and enter
them into the real bank page, allowing them to transfer cash before the victim can even
bat an eyelid.
Most of the attacks on online banking used today are based on such activities like
deceiving the user to steal login data and valid TANs. Two well known examples for
those attacks are phishing and pharming (see appendix). Cross-site scripting (see
appendix) and key logger/Trojan horses (see appendix) can also be used to steal login
information. A method to attack signature based online banking methods is to manipulate
the used software in a way, that correct transactions are shown on the screen and faked
transactions are signed in the background.
A recent FDIC Technology Incident Report, compiled from suspicious activity reports
banks file quarterly, lists 536 cases of computer intrusion, with an average loss per
incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of
2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and
the second. In 80 percent of the cases, the source of the intrusion is unknown but it
occurred during online banking, the report states. The most recent kind of attack is the socalled Man in the Browser attack, where trojan horses permit a remote attacker to modify
the destination account number and also the amount.
4.7) Types of Online Attacks:

Banks and service providers need to guard against various types of online attacks. The
object of an attack may vary. Attackers may try to exploit know vulnerabilities in
particular operating systems. They also may try repeatedly to make an unauthorized entry
into a Web site during a short time frame thus denying service to other customers. Types
of attacks may include:
Sniffers - Also known as network monitors, this is software used to capture

keystrokes from a particular PC. This software could capture login IDs and
passwords.
Guessing Passwords - Using software to test all possible combinations to gain

entry into a network.
Brute Force - A technique to capture encrypted messages then using software

to break the code and gain access to messages, user IDs, and passwords.
Random Dialing - This technique is used to dial every number on a known

bank telephone exchange. The objective is to find a modem connected to the
network. This could then be used as a point of attack.
Social Engineering - An attacker calls the banks help desk impersonating an

authorized user to gain information about the system including changing
passwords.
Trojan horse - A programmer can embed code into a system that will allow the
programmer or another person unauthorized entrance into the system or
network.
Hijacking - Intercepting transmissions then attempting to deduce.
4.8) Countermeasures:
There exist several countermeasures which try to avoid attacks. Digital certificates are
used against phishing and pharming, the use of class-3 card readers is a measure to avoid
manipulation of transactions by the software in signature based online banking variants.
To protect their systems against Trojan horses, users should use virus scanners and be
careful with downloaded software or e-mail attachments. To minimize the risk of fraud,
online banking is enabled through a secure server, which grants the individual a private
access to his or her bank account.
Banks, meanwhile, should look into additional fraud detection capabilities. There are
many software firms that are working and are able to work specifically for financial
institutions to help them protect and improve their website. Banks may also go for
custom-built
software
it might even be wise to revisit such ideas as single-site browsers, in which the user can
only login to his or her bank through a web browser that sits as an application on the
desktop. By using the single-site browsers, one can navigate all he/she wants in one
particular site, say Dutch Bangla Bank Ltd. i.e. www.dbbl.com.bd but the person won't be
able to get anywhere else.
Of course, it all goes back to end-user awareness. The customers should be aware of the
risk of opening unknown or spam e-mail and the risks associated with those. Unless they
are aware and the bank officials are keen to improve, problems would exist and frauds
would happen.
4.9) Ensuring Security in Online Banking System:

Protection through single password authentication, as is the case in most secure Internet
shopping sites, is not considered secure enough for personal online banking applications
in some countries. Basically there exist two different security methods for online
banking.
The PIN(Personal Identification Number is a secret numeric password shared between a
user and a system that can be used to authenticate the user to the system )/TAN (A
Transaction Authentication Number is used by some online banking services as a form of
single use one time password to authorize financial transaction.) system where the PIN
represents a password, used for the login and TANs representing one-time passwords to
authenticate transactions. TANs can be distributed in different ways; the most popular
one is to send a list of TANs to the online banking user by postal letter. The most secure
way of using TANs is to generate them by need using a security token. These token
generated TANs depend on the time and a unique secret, stored in the security token (this
is called two-factor authentication or 2FA). Usually online banking with PIN/TAN is
done via a web browser using SSL (secured socket layer) secured connections, so that
there is no additional encryption needed.
Signature based online banking where all transactions are signed and encrypted digitally.
The Keys for the signature generation and encryption can be stored on smartcards or any
memory medium, depending on the concrete implementation.
4.10) Online Banking vs. Traditional Banking:

The conventional banks of Bangladesh, meaning most of the nationalized banks are still
following the conventional banking system. Below is a comparison of online banking and
traditional banking system to judge the better one:
Point of Distinction
Online Banking
Non-Online Banking
Any branch banking
Online banking supports it
Non- online, traditional

banking doesnt support it
Electronic fund transfer
Supports
Doesnt support
Inter branch Transaction
Supports
Doesnt support
Inter Bank Transaction
Supports
Doesnt support
SMS banking/ Mobile
Supports
Doesnt support
Online query
Supports
Doesnt support
Duration in clearing
Less
More
Supports
Doesnt support
Use of central server
Uses
Doesnt use
Facility of using central
Can check any account
Cannot check any account
server
maintained with any branch.
maintained with any branch.
Online access of customers
Customers can check their
Customers cannot check
accounts online.
their accounts online.
Banking
instruments
Deposit and withdrawal of
instrument at any branch
Chapter 5
Online Banking of Dutch-Bangla Bank
5.1) Online Banking at DBBL
5.2) Components of Online Banking System of DBBL
5.2.1) Any Branch Banking
5.2.2) Delivery Channels
5.2.2.1) ATM Booths
5.2.2.2) POS terminals
5.2.2.3) Internet banking

5.2.2.4) SMS & Alert Banking
5.3) DBBL Internet Banking Features at a Glance
5.4) Online Banking System Followed by DBBL
5.5) Facilities of Online Banking at DBBL
5.6) Problems with Online Banking at DBBL
5.7) Potential Risks That DBBL May Face
5.8) SWOT analysis based on the survey
5.1) Online Banking at DBBL:

DBBL has adopted the same exact automation solution used by many international
banking giants. It uses the software named Flex cube, made by the firm known as iflex. It
is a sister concern of Citigroup, the American corporate giant. The firm had built Flex
cube especially for Citibank N.A. and it was used internally. Later on it became a
commercial product.
DBBL had purchased this software from the firms Indian concern. In 2003, the bank
began the process of automation. According to its internal rules, any procurement excess
of BDT 10,000,000.00 would require invitation of tenders. The approximate cost of this
project was BDT 2,500,000,000.00 and thus DBBL invited for tenders through
advertisements. Several firms responded. Of them, Flex cube was selected after a detailed
inspection of all softwares. The implementation of the automation project started with
the formation of a core team. The team was consisted of twenty two members of whom
fourteen members were from the business and eight members from IT department. The
team went through eight weeks of extensive training on the project implementation
issues. In February 2004, the User Acceptance Test (UAT) started in the data center of the
bank. The core team and networking team started installation of the servers, networking
equipment and software, customization of the same to cope with the prevailing banking
rules and regulations of the country. Simultaneously, the switching team started
installation of ATMs and POS terminals and testing their performance with the switching
software.
After completing the UAT, the roll out of the branches from older system to the newly
installed automation process began. The IT division rolled out one branch at every
weekend and installed ATM under the respective branches. Every DBBL branch
supervises the activities of the ATM booths nearby them. The implementation process
started on July 2004 and on 18 th December 2004, the roll out of all branches of the bank
was completed. The year-end operation of the bank for the year 2004 was completed
successfully on 30th December 2004, centrally at data center. DBBL alone installed the
entire automation and DRS and the bank is still maintaining it alone. The software has
experienced some modifications as and when needed during these six glorious years. Still
it is a complete solution for online banking and is designed to support the mainstream
online banking followed across the globe. In Bangladesh, DBBL, Eastern Bank Ltd. and
Dhaka Bank Ltd. also uses Flex cube.
The software alone deals with all the activities of the bank. It has the following four
divisions:
Retail Banking
Corporate Banking
Investment Services
IT Related Services
It keeps records of newly opened accounts, it deals with recording cash and non-cash
transactions, and even it automatically debits the customer account if service charges are
applicable. All the ancillary services also performed by the bank with the help of this
software.
Being a non-AD branch, DBBL Elephant Road Branch mostly uses DBMS, Retail
Banking and Investment Services portion of the Flex cube software. For clearing related
works, it uses a MS-DOS file named nikash.exe prescribed by Bangladesh Bank. This is
the default software given to all the banks for posting and maintaining clearing related
activities.
5.2) Components of Online Banking System of DBBL:

DBBL has two components of its online banking. With the help of these two components,
it manages the entire online banking system of the bank. The two components are:
Any Branch Banking
Delivery Channels
These two components are described below:
5.2.1) Any Branch Banking: The term any branch banking describes inter branch transactions of DBBL. The bank offers the deposit and withdrawal of cash
and other instruments in any of its branches in Bangladesh. The customers can
transact in any of its branches nearby his/her place after opening account in any of
the branches. The deposit and withdrawal of would take effect in no time.
The customer can also opt for starting his/her internet banking or SMS alert
banking in any of the branches by only filling up the Customer Options form.
But he/she has to collect his/her password from the concerning bank where his/her
account belong to.
Also a customer can avail the following facilities through any branch banking:
Checking his/her account balance
Ask for transaction statements
Ask for solvency or any other certificates
Can pay utility bills
Enquire about any deposits or withdrawals made by any third party to

his/her account; from any branch.
Can enquire whether any remittance has received or not.
Can stop payment of cheques.
Can report about any lost/ stolen/ captured debit/ credit card served by the
bank and de-activate that.
Can report for lost/ stolen cheque book to stop further use.
Can give standing instructions
Can check for returned cheques from the clearing house, etc.
5.2.2) Delivery Channels: The second component of the bank is its delivery
channels through which it gives the online banking services. The bank has several
delivery channels that are listed below:
ATM booths
POS terminals
Internet banking
SMS & alert banking
5.2.2.1) ATM Booths:

The bank currently possesses almost eight hundred ATM booths all over
the country with five hundred and seventy booths in Dhaka city. These
booths are open 24 hours and seven days a week. Those are even, kept
open during national holidays. The slogan for DBBL ATMs are anytime
anywhere and its literally so. These booths are online and the withdrawal
limit starts from BDT 500.00. A customer can access a booth five times a
day and can withdraw BDT 20,000.00 at a time and a maximum of BDT.
50,000.00 per day. Using these booths is free of cost and the service
charge for ATM debit card is only BDT 200.00 per year which is
insignificant compared to its usability. Using the ATM service, a customer
can access to the following services:
Cash withdrawal
Balance enquiry
Taking a mini statement of hiss/her past ten transactions
Fund transfers (within his/her accounts)
Utility bill payment
All the booths are going to have deposit facilities soon, probably by next
January. Already fifty booths offers cash deposit facility. The bank also
has six mobile ATM booths that have no fixed location. These booths very
helpful while any exhibition or fair takes place.
The bank extended its ATM services to the customers of other banks by
signing the agreement with the following banks:
-
Mutual Trust Bank Ltd.
Prime Bank Ltd.
The City Bank Ltd.
Southeast Bank Ltd.
United Commercial Bank Ltd.
Jamuna Bank Ltd.
Mercantile Bank Ltd.
Standard Chartered Bank
Bank Asia Ltd.
National Credit & Commerce bank Ltd.
Commercial Bank of Ceylon PLC., Dhaka
First Security Bank Ltd.
Trust Bank Ltd.
Shahjalal Islami Bank Ltd.
For ATM access to other banking institutions, the cost per transaction is
around BDT 70.00 (which is USD 1.00 & USD 1.25 if routed through
Visa and MasterCard network respectively). But DBBL charges only BDT
10.00 per transaction to the partner banks to help the consumers. Many
other banks are in the pipe line to make such mutual arrangements with
DBBL.
5.2.2.2) POS terminals:

POS means Point of Sales. Using its seven hundred plus POS terminals
the customers can pay shopping/dining/hotel bills at various merchant
locations throughout the country using DBBL and any MasterCard (both
Maestro and Cirrus) or Visa (Visa debit, Electron and Plus) branded
debit/credit cards.
5.2.2.3) Internet banking:

The basic steps involved in completing transactions though internet
banking are extremely simple and are available in a user friendly
environment, as explained below:
-
Access the banks website www.dbbl.com.bd
Click on the option which provides internet banking at the

middle left corner
Enter the user ID and password/PIN provided by DBBL in the

respective fields and thus enter the account online
Perform the requisite transactions
Logout
The transactions that can be performed using internet banking are:

-
Status of account e.g. balance enquiry
Funds transfer
Payment of utility bills viz. electricity, water, telephone, credit

card bills, post paid mobile bills etc
Initiation and execution of standing instructions
Opening and redemptions of term deposits from/to his/her

current/savings account, etc.
5.2.2.4) SMS & Alert Banking:

In 2006, the bank launched SMS & Alert Banking system, the first in
Bangladesh. This ancillary service is a modern tool for banking using the
mobile phone. The customers can subscribe this option and it has no fixed
charges, except the regular SMS charge. The customer can check account
balance through sending an SMS to 3225. Even s/he would be notified by
an SMS when any deposit or withdrawal occurs with his/her bank account.
This service is only applicable for All Mobile Phone subscribers.
5.3) DBBL Internet Banking Features at a Glance:

DBBL online banking gives the customers the following options over internet:
Account Summary: The Customer will be able to view the list of Current,
Saving, Term Deposit and Loan accounts with the current balance.
Account Details: The Customer can choose a particular account and see the
account details including unclear fund, limit, interest accrued etc.
Account Activity: The customer can see or print his transaction activity in a
given account for a particular period.
Transfer Funds: The customer can transfer funds from one of his accounts to
another of his accounts within the bank.
Third Party Transfer*: The customer can transfer funds from one of his
accounts to another customers account within the bank.
Pay Bills: The customer can pay his utility bill (like Electricity, WASA, GAS,
Telephone, Mobile, ISP etc.)
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).
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.
Loan Repayments: The customer can make payment of the loan installment from
his CASA (Current Account Savings Account) account.
Statement Request: The customer can make a request for account statement for a
required period. The bank will manually service this request.
Cheque Book Request: The customer can make a request for a Cheque book. But
s/he has to collect it from the branch where the account was opened.
Cheque Status Inquiry: The customer can choose an account and enter the
Cheque number for which the status should be viewed.
Stop Payment Cheque: The customer can mark his Cheque leaf as stop payment.
Interest Rate Inquiry: The customer can query on the interest rates on CASA &
Term Deposit Products.
Foreign Exchange Rate Inquiry: The customer can query on the Foreign
Exchange (FX) Rates using this function.
Refill Pre-Paid Card: The customer can buy a refill number for his pre-paid
mobile phone or ISP link.
Change Password: The customer can change his Internet Banking Password
using this function.
5.4) Online Banking System Followed by DBBL:

Generally there are three types of online banking that are being followed all over the
world. Currently, these following three basic kinds of Internet banking are being
employed in the marketplace:
Informational
Communicative
Transactional
The types are elaborated below:

Informational:
This is the basic level of Internet banking. Typically in informational system, the bank
has marketing information about the banks products and services on a stand-alone
server. The risk is relatively low, as informational systems typically have no path between
the server and the banks internal network. This level of Internet banking can be provided
by the bank or outsourced. While the risk to a bank is relatively low, the server or web
site may be vulnerable to alteration. Appropriate controls therefore must be in place to
prevent unauthorized alterations to the banks server or web site.
Communicative:
This type of Internet banking system allows some interaction between the banks systems
and the customer. The interaction may be limited to electronic mail, account inquiry, loan
applications, or static file updates (name and address changes). Because these servers
may have a path to the banks internal networks, the risk is higher with this configuration
than with informational systems. Appropriate controls need to be in place to prevent,
monitor, and alert management of any unauthorized attempt to access the banks internal
networks and computer systems. Virus controls also become much more critical in this
environment.
Transactional:
This level of Internet banking allows customers to execute transactions. Since a path
typically exists between the server and the banks or outsourcers internal network, this is
the highest risk architecture and must have the strongest controls. Customer transactions
can include accessing accounts, paying bills, transferring funds, etc.
From observation, it can be said that DBBL is offering the transactional type of online
banking service, almost. Third party fund transfers were restricted till now by Bangladesh
bank, but a through a recent circular Bangladesh bank has opened the gate for third party
transfer of funds through internet. This has made the online system of DBBL to perform
inter-branch transactions also. But any bank transactions through internet are still
restricted, though Bangladesh Bank is expected to allow it soon.
5.5) Facilities of Online Banking at DBBL:

Through its online banking system, DBBL has given its customers some distinct
facilities. Those are listed below:
Electronic transfer of money without involving physical handover of cash.

Lower transaction cost and cutting down costs related with physical
appearance of the customers.
Increased customer satisfaction because of overcoming the barriers of place,
time and money through online banking.
Anytime, anywhere access to account using internet.
Erasing risks associated with carrying cash and thus ensures the safety and
security of transactions.
Ability to give standing instructions to stop payment.
Cancellation of cheque without physical appearance.
Placing orders for new cheque books online without physical appearance.
Obtaining account statement.
Checking account status.
24 hours deposit and withdrawal of money, 5 times a day.
Easy to shop with plastic money.
Opening and encashment of Fixed Deposit Receipt (FDR).
Applying for loans.
Alerts for withdrawal and deposit from and to the customers bank account,
etc.
5.6) Problems with Online Banking at DBBL:

There are also some vices of online banking that DBBL faces from time to time. Those
are:
Server related problems:
In 2009, during the month of Ramadan the bank had to face some serious hazards
and technical difficulties regarding the central server. As a consequence of that no
computers were accessible and the branches were at a stake. This incident
hampered the customer satisfaction seriously. If problems like this occur
frequently, the reputation of the bank will be negatively affected and competitors
would take chance of this problem. Also any sort of server crash may result in a
disaster, but this is a comparatively low risk as DBBL has a backup server that is
being updated continuously every second.
Cyber hacking:
Increased use of internet technology in banking may invite hackers. They always
target loopholes and websites of banks are their prime target. If the website isnt
secured enough or if the hacker is too strong then hacking may cause serious
problems for the bank. Also if anyone gets to know a third party password and
user ID then any misuse would cost the bank a lot.
Problems With ATM Booths:

Sometimes the ATM booths of the bank are found out of cash. It disrupts
continuous service and customer satisfaction. Many of DBBL booths are found
inactive or damaged or under maintenance. This problem should be overcome.
5.7) Potential Risks That DBBL May Face:

Online banking or Internet banking creates new risk control challenges for banks. Risk is
the potential that events, expected or unexpected, may have an adverse impact on the
banks earnings or capital. The risks of online banking can create problems regarding
credit, liquidity, transaction, compliance, strategic, and reputation of the bank. These
categories are not mutually exclusive and all of these risks are associated with online
banking.
Credit Risk: Credit risk is the risk to earnings or capital arising from an
obligors failure to meet the terms of any contract with the bank or otherwise
to perform as agreed. Credit risk is found in all activities where success
depends on counterparty, issuer, or borrower performance. It arises any time

when bank funds are extended, committed, invested, or otherwise exposed
through actual or implied contractual agreements, whether on or off the banks
balance sheet. Online banking provides the opportunity for banks to expand
their geographic range. Customers can reach a given institution from literally
anywhere in the world. In dealing with customers over the Internet, absent any
personal contact, it is challenging for institutions to verify the bonafides of
their customers, which is an important element in making sound credit
decisions. Verifying collateral and perfecting security agreements also can be
challenging with out-of-area borrowers. Unless properly managed, online
banking could lead to a concentration in out-of-area credits or credits within a
single industry. Effective management of a portfolio of loans obtained through
the internet requires that the board and management understand and control
the banks lending risk profile and credit culture. They must assure that
effective policies, processes, and practices are in place to avoid or at least, to
control the risk associated with such loans.
Liquidity Risk: Liquidity risk is the risk to earnings or capital arising from a
banks inability to meet its obligations when they come due, without incurring
unacceptable losses. Liquidity risk includes the inability to manage unplanned
changes in funding sources. Liquidity risk also arises from the failure to
recognize or address changes in market conditions affecting the ability of the
bank to liquidate assets quickly and with minimal loss in value. Online
banking can increase deposit volatility from customers who maintain accounts
solely on the basis of rate or terms. Asset/liability and loan portfolio
management systems should be appropriate for products offered through
online banking. Increased monitoring of liquidity and changes in deposits and
loans may be warranted depending on the volume and nature of internet
account activities.
Transaction Risk: Transaction risk is the current and prospective risk to
earnings and capital arising from fraud, error, and the inability to deliver
products or services, maintain a competitive position, and manage

information. Transaction risk is evident in each product and service offered
and encompasses product development and delivery, transaction processing,
systems development, computing systems, complexity of products and
services, and the internal control environment. A high level of transaction risk
may exist with online banking products, particularly if those lines of business
are not adequately planned, implemented, and monitored. Banks like DBBL
that offer financial products and services through the internet must be able to
meet their customers expectations. It must also ensure that it has the right
product mix and capacity to deliver accurate, timely, and reliable services to
develop a high level of confidence in their brand name. Customers who do
business over the Internet are likely to have little tolerance for errors or
omissions from financial institutions that do not have sophisticated internal
controls to manage their banking business online. Likewise, customers will
expect continuous availability of the product and web pages that are easy to
navigate. Software to support various Internet banking functions is provided
to the customer from a variety of sources. The bank may support customers
using customer-acquired or bank-supplied browsers or personal financial
manager (PFM) software. Good communications between banks and their
customers will help manage expectations on the compatibility of various PFM
software products.
Attacks or intrusion attempts on banks computer and network systems are a
major concern. Studies show that systems are more vulnerable to internal attacks
than external, because internal system users have knowledge of the system and
access. Thus DBBL should have sound preventive and detective controls to
protect its online banking system from exploitation both internally and externally.
Contingency and business resumption planning is necessary for the bank to be
sure that it can deliver products and services in the event of adverse
circumstances. Internet banking products connected to a robust network may
actually make this easier because back up capabilities can be spread over a wide
geographic area. For example, if the main server is inoperable, the network could
automatically reroute traffic to a backup server in a different geographical
location. Security issues should be considered when the institution develops its
contingency and business resumption plans. In such situations, security and
internal controls at the back-up location should be as sophisticated as those at the
primary processing site. High levels of system availability will be a key
expectation of customers and will likely differentiate success levels among
financial institutions on the Internet.
DBBL offers utility bill payment and thus needs a process to settle transactions
between the bank, its customers, and external parties. This type of processes
should be carefully monitored and relationship with the parties is to be properly
maintained. In addition to transaction risk, settlement failures could adversely
affect reputation, liquidity, and credit risk.
Compliance Risk: Compliance risk is the risk to earnings or capital arising
from violations of, or non-conformance with, laws, rules, regulations,
prescribed practices, or ethical standards. Compliance risk also arises in
situations where the laws or rules governing certain bank products or activities
of the banks clients may be ambiguous or untested. Compliance risk exposes
the institution to fines, civil money penalties, payment of damages, and the
voiding of contracts. Compliance risk can lead to a diminished reputation,
reduced franchise value, limited business opportunities, reduced expansion
potential, and lack of contract enforceability.
Maximum online banks in Bangladesh offer their customers to use other bank
delivery channels, mostly DBBL delivery channels like ATM and POS.
Accordingly, banks should make certain disclosures on online banking channels,
including Web sites, remain synchronized with other delivery channels to ensure
the delivery of a consistent and accurate message to customers. Moreover, it is
important for the bank itself to be familiar with the regulations that permit
electronic delivery of disclosures/notices versus those that require traditional hard

copy notification. Thus DBBL should carefully review and monitor all
requirements applicable to electronic products and services and ensure they
comply with evolving statutory and regulatory requirements to avoid compliance
risks and its hazards. Regular monitoring of bank Web sites will help ensure
compliance with applicable laws, rules, and regulations. Also, the bank should set
up a control system to identify unusual or suspicious activities and, when
appropriate, file Suspicious Activity Reports (SARs). Thus the bank should
remain updated to comply with the legal requirements regarding online
transactions.
Strategic Risk: Strategic risk is the current and prospective impact on
earnings or capital arising from adverse business decisions, improper
implementation of decisions, or lack of responsiveness to industry changes.
This risk is a function of the compatibility of an organizations strategic goals,
the business strategies developed to achieve those goals, the resources
deployed against these goals, and the quality of implementation. The
resources needed to carry out business strategies are both tangible and
intangible. They include communication channels, operating systems, delivery
networks, and managerial capacities and capabilities. The organizations
internal characteristics must be evaluated against the impact of economic,
technological, competitive, regulatory, and other environmental changes.
Management must understand the risks associated with online banking before
they make a decision to develop a particular class of business. In some cases,
DBBL may offer new products and services via the Internet. It is important
that management understand the risks and ramifications of these decisions.
Sufficient levels of technology and MIS (Management Information System) are
necessary to support such a business venture. Because many banks will compete
with financial institutions beyond their existing trade area, DBBL must have a
strong link between the technology employed and the banks strategic planning
process.
Before introducing an internet banking product, management should consider

whether the product and technology are consistent with tangible business
objectives in the banks strategic plan. The bank also should consider whether
adequate expertise and resources are available to identify, monitor, and control
risk in the Internet banking business. The planning and decision making process
should focus on how a specific business need is met by the online banking
product, rather than focusing on the product as an independent objective. The
banks technology experts, along with its marketing and operational executives,
should contribute to the decision making and planning process. They should
ensure that the plan is consistent with the overall business objectives of the bank
and is within the banks risk tolerance. New technologies, especially the internet,
could bring about rapid changes in competitive forces. Accordingly, the strategic
vision should determine the way the online banking product line is designed,
implemented, and monitored.
Reputation Risk: Reputation risk is the current and prospective impact on
earnings and capital arising from negative public opinion. This affects the
institutions ability to establish new relationships or services or continue
servicing existing relationships. This risk may expose the institution to
litigation, financial loss, or a decline in its customer base. Reputation risk
exposure is present throughout the organization and includes the responsibility
to exercise an abundance of caution in dealing with customers and the
community. Thus DBBLs reputation can suffer if it fails to deliver on
marketing claims or to provide accurate, timely services. This can include
failing to adequately meet customer credit needs, providing unreliable or
inefficient delivery systems, untimely responses to customer inquiries, or
violations of customer privacy expectations. The banks reputation can be
damaged by online banking services that are poorly executed or otherwise
alienate customers and the public. Well designed marketing, including
disclosures, is one way to educate potential customers and help limit
reputation risk. Customers must understand what they can reasonably expect
from a product or service and what special risks and benefits they incur when
using the system. As such, marketing concepts need to be coordinated closely
with adequate disclosure statements. A bank should not market the banks
online banking system, even the overall banking system based on features or
attributes the system does not have. The marketing program must present the
product fairly and accurately.
The bank should carefully consider how connections to third parties are presented
on their Web sites. Hypertext links are often used to enable a customer to link to a
third party. Such links may reflect an endorsement of the third partys products or
services in the eyes of the customer. It should be clear to the customer when they
have left the banks Web site so that there is no confusion about the provider of
the specific products and services offered or the security and privacy standards
that apply. Similarly, adequate disclosures must be made so that customers can
distinguish between insured and noninsured products. The bank needs to be sure
that their business continuity plans include the online banking business. Regular
testing of the business continuity plan, including communications strategies with
the press and public, will help the bank ensure it can respond effectively and
promptly to any adverse customer or media reactions.
5.7) Comparing DBBL with other Banks:

A survey was conducted to compare DBBLs online banking services with that of other
banks, especially local private banks. For this purpose, nine local and foreign private
commercial banks were randomly selected for the survey. Though randomly selected,
those local banks were carefully chosen that are competitors to DBBL in online banking
services. Currently there are four leading foreign banks doing their business in
Bangladesh. Of them two were selected for the survey, namely Citibank N.A. and The
Hongkong Shanghai Banking Corporation (HSBC hereafter). Among the local private
commercial banks, the following banks were selected for the survey:
National Bank Ltd.
Prime Bank Ltd.
BRAC Bank Ltd.
Eastern Bank Ltd.
Islami Bank Bangladesh Ltd.
AB Bank Ltd.
Southeast Bank Ltd.
The survey was done based on a question answer basis. The findings of the survey are
described below:
Any Branch Banking:

All the banks offer any branch banking. The local banks offer free transfer up to a
certain amount of transfer. Beyond that amount and if the transfer is made out of
the concerned branchs clearing zone, banks charge a transaction fee. Foreign
banks charge even higher than those.
Debit Card:
90% of the interviewee banks offer debit cards to their customers, except Citibank
N.A. The debit cards may be regular, deluxe or both. 10% banks offer deluxe or
exclusive debit cards, 40% offer a regular debit card and 20% offers both types of
debit cards to their customers. 50% of the selected banks dont offer credit or
overdraft facility with their debit cards. These are:
Southeast Bank Ltd. (SEBL hereafter)
Islami Bank Bangladesh Ltd. (IBBL hereafter)
The HSBC
AB Bank Ltd.
Citibank N.A. doesnt offer debit card and information regarding Prime Bank Ltd.
could not be retrieved. The following banks offer overdraft or credit facility:
Dutch Bangla Bank Ltd. (DBBL hereafter)
BRAC Bank Ltd.

Eastern Bank Ltd. (EBL hereafter)
National Bank Ltd. (NBL hereafter)
ATM and POS:
Eight of the ten banks (including DBBL) possess ATM booths, but Citibank N.A.
and Southeast Bank doesnt have ATM booths. Here DBBL is significantly ahead
from its competitor banks. DBBL offers 2,366 ATM booths while BRAC Bank is
at the second position with 75 ATMS and Eastern Bank Ltd is at third position
with 50 ATMs. Among others HSBC also offers 34 ATMs. So DBBL occupies a
bigger market share among these recipients. This can be depicted by a pie chart
presented below:
DBBL
BRA C
EBL
HSBC
OTHERS
Illustration 1: Comparison of ATM booths
Mostly because of DBBLs agreement with many other banks, those banks could
offer debit cards and thus ATM service to their customers.
Internet banking:
This service is an optional one and user has to apply separately to enable this
option. Seventy percent of the selected banks answered Yes and twenty percent
answered No to the following question:
Does the customer can check their account maintained with your bank online?
While answering a question on the charge/s applicable for using online banking
facility, forty percent banks said there are no such charges, forty percent said a
fixed charge is applicable and twenty percent banks said the charges vary
depending on the nature of the customer. Only DBBL and SEB offer postpaid
mobile bill payment and recharging pre-paid mobile numbers using the banks
website.
SMS Alert banking:
In DBBL, SMS alert banking refers to the push-pull service between the bank and
any customer. Other than DBBL five banks were found to offer this service and
four banks dont have this service; i.e. sixty percent banks provide SMS banking
service; obviously optional; to their customers and forty percent banks dont. The
standard SMS charge/s is/are applicable and there is no fixed charge/s applicable.
5.8) SWOT analysis based on the survey:

The full form of SWOT denotes Strengths, Weakness, Opportunities and Threats. It is an
analytical tool that examines the interaction between the business or the proposed change
and the external Marketplace. Strengths and weaknesses are internal factors.
Opportunities and threats are external factors. The SWOT analysis headings provide a
good framework for reviewing strategy, position and direction of a company or business
proposition, or any other idea. SWOT analysis also works well in brainstorming
meetings.
From the survey findings and also observing the prevailing situation thoroughly, a SWOT
analysis has been done exclusively for the online banking side of DBBL. The results are
stated here under:
DBBLs strength at the moment is its numerous ATM booths and POS centers.
Literally it holds more or less ninety percent share of the existing ATM and POS
market. For this reason the customers get attracted. Also the latest scheme of the
bank of opening savings account has done the magic. But in case of online
banking, ATM booths, POS centers, the new secured credit card with EMV (See
appendix) technology and the updated website are the internal factors that
contribute for DBBLs strength.
The weakness of the bank may be its mass banking strategy. The bank seems
overloaded with customers and that is affecting customer services and also its
activities. Many of the ATM booths are inactive or under maintenance. If this
problem persists, customers may switch to competitors.
The opportunity has come before DBBL to strengthen its current position by the
recent circular of Bangladesh Bank of allowing online fund transfer. This would
help the bank to capture a bigger market share than it occupies now. As the bank
already facilitates use of plastic money and has a built in structure of hundreds of
ATMs this opportunity of online fund transfer could give DBBL a well ahead
position in the industry and thus more profitability.
The major threats for any firm always involve threat from competitors. Till now,
DBBL is not really facing a tough competition. But banks like BRAC Bank Ltd.
and Eastern Bank Ltd. may become major threats for the bank in near future.
These two banks hold the second and third position in the industry for offering
ATM booths and POS centers. Though they are far behind, the bank needs to
become cautious to hold its number one position. Recently, it is being felt that
BRAC Bank is getting more customer satisfaction than DBBL in the field of
online banking. So this is the high time to take some specific steps that can
reduce the threat. Bangladesh Bank has allowed inter-branch fund transfer using
internet for all listed banks. If this opportunity is not properly utilized, other
competitors may beat the bank in the long run.
Findings:
The author of the report has the experience regarding the said topics for all about three
months at Dutch Bangla Bank Limited. Based on that experience, some noticeable
observations are described below:
DBBL has a bulk of qualified, experienced and dedicated human resources.
DBBL provide Internet Banking.
DBBL established so many ATM booths throughout the Country.
DBBL often has problem with ATM machine.
DBBL provides the modern technology and enters truly on On-Line Banking and
also provide ATM facility for the customer service .But most of the customers do not
know about Internet Banking and Different types of ATM cards. So DBBL should
focus and vastly advertise those kinds of facilities to the client.
Recommendations:
Though Dutch Bangla Bank has established its image as one of the best service provider
for its potential customers; still they are yet not the market leaders. The bank has to
overcome the shortcomings in the near future. Some recommendations are given below
based on the analysis of data:
Issuing of brochures and leaflets: Bank should issue or print more brochures
and leaflets with product details with a specific focus on online banking facilities.
Customer defined service standards: A formal service blueprint should be

designed with appropriate service level standards to reduce the variability of service.
These standards should be customer defined and customer expectation should be
considered while deciding on the service standards. Online banking facilities should be
the pioneer one regarding this issue.
Control over the mailing network: Dutch Bangla Bank should strictly
monitor the courier services that are engaged in delivering mails and documents. Huge
delivery failures are being piled up at branches. So, the bank should have control over its
couriers and ensure proper delivery of mails and documents.
Conclusion:
Dutch-Bangla Bank limited is a Bangladesh European joint Venture Commercial Bank
registered by the Bangladesh Bank. DBBL follows the rules and regulations prescribed
by the Bangladesh Bank for all scheduled commercial Banks. The functions of the bank
cover a wide range of banking activities. Dutch Bangla Bank limited truly follows all the
rules and regulations prescribed by the Bangladesh Bank for all scheduled commercial
Banks about Internet Banking. DBBL is delivering services like other banks. But if
services are offered at the augmented level definitely DBBL can become the market
leader. The study indicates that the growth of Internet banking services in Bangladesh is
positive enough to create attraction among the banks. The study also reveals that DBBL
has moderated level of satisfaction regarding the issue of online banking.
Appendix
Pharming and Phising : Phishing and pharming are two different ways hackers attempt to
manipulate users via the Internet. Phishing involves getting a user to enter personal
information via a fake website. Pharming involves modifying DNS entries, which causes
users to be directed to the wrong website when they visit a certain Web address.
Bibliography
Rahman, M. (2008), Innovative Technology and Bank Profitability: The
Bangladesh Experience, Working paper series 0803, Research Work, Policy
Analysis Unit (PAU), Bangladesh Bank.
Mia, Rahman and Uddin, (2007), E-banking: Evolution, Status and Prospects, The
Cost and Management, Vol.35, No.1, January-February 2007, pp. 36-48.
Islam, M. (2005), Proposed IBT infrastructure for E-banking in Bangladesh,
Master of Science Thesis, Royal Institute of Technology (KTH), Stockholm,
Sweden.
Hossain, N. (2000), E-Commerce in Bangladesh: Status, Potential and
Constraints, Report Prepared for JOBS/IRIS program of USAID.
Daniel, E. (1999), Provision of electronic banking in the UK and the Republic of
Ireland, International Journal of bank marketing, Vol. 17, No. 2.
Sathye, M. (1999), Adoption of Internet banking by Australian customers,
International Journal of bank marketing, Vol. 17, No. 7, pp. 324-334.

Internship Report On: "Online Banking System of Dutch-Bangla Bank LTD."

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Internship Report On: "Online Banking System of Dutch-Bangla Bank LTD."

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Internship Report

Date of submission: 22 October, 2014

October 22, 2014

Subject: Submission of Internship Report

Approval of the Head of the Department

TO WHOM IT MAY CONCERN

October 22, 2014

TO WHOM IT MAY CONCERN

I am Hridoy Chandra Sarker a student of BBA, Major in Finance from Bangladesh

of Online Banking, Facilities of Online Banking, Threats to Online Banking, Types of

Recommendations and Conclusion.

Approval of the head of the Department

Origin of the Report

Objectives of the Study

Limitations of the Study

Chapter-2: Overview of Dutch-Bangla Bank Ltd.

Clearing and Collection Section

Definition of Online Banking

Chapter-5: Online Banking for Dutch-Bangla Bank Ltd.

Comparing DBBL with other Banks

Chapter-6: Findings, Recommendations, Conclusion

Origin of the report

1.1) Origin of the Report:

1.2)Rationality of the Report:

1.3) Objectives of the Study:

To analyze the banks performance on the ground of online banking.

To identify the strengths and weaknesses of online banking system of Dutch

To analyze the market position of DBBL, with respect to online banking.

Selecting the Topic

Identifying Data Sources

Classification and Analysis of Data

Findings of the Study

Final Report Compilation

1.5) Scope of the Study:

1.6) Limitations of the Study:

1.7) Organization of the study:

2.2) Organizational Profile:

An 8-member board of directors comprising a chairman and four representatives from

2.3) The Mission Statement:

2.3.2) Core Objective: Dutch-Bangla Bank believes in its uncompromising

2.4) Strategies of the Bank:

Synchronized and steady growth of the bank

Utilizing all available resources to develop various plans, policies and

Implementation of the plans, policies and procedures.

Draw upon the connections, advice, etc. of the foreign partners.

Utilize a team of professional employees.

2.5) Goals of the Bank:

A realistic deposit mobilization plan.

An appropriate lending risk assessment system.

A system to make good advances.

A recruitment, compensation, training and orientation plan.

A plan for offering better customer services.

An appropriate management structure, system, procedures and approaches.

A scientific MIS to monitor Banks activities.

2.6) Business Objectives of the Bank:

Building a low cost fund base.

Making sound loans and investments.

Meeting capital adequacy requirement at all the time.

Ensuring 100% recovery of all advances.

Ensure a satisfied work force.

Focusing on fee-based income.

Adopting appropriate management technology.