Internship Report on Online Banking of Shahjalal Islami Bank Limited Sylhet Branch, Special Focus on (BEFTN)

Internship Report on Online Banking of Shahjalal Islami Bank Limited Sylhet Branch, Special Focus on (BEFTN)

SUBMITTED TO:
Mr. M. Shahansha Molla Assistant professor Department of Business Administration Leading University, Sylhet-3100

SUBMITTED BY:
Shanu Uddin Rubel ID: 0901010054 Department of Business Administration Leading University Sylhet-3100

Submission Date: February 05, 2013

LEADING UNIVERSITY

February 05, 2013 Mr. M. Shahansha Molla Assistant professor Dept. of Business Administration Leading University, Sylhet.

Subject: Letter of Transmittal

Dear Sir, I have completed the Internship Report required to be submitted as a precondition for the completion of B.B.A. Program. The title of my report is Online Banking of Shahjalal Islami Bank Limited Sylhet Branch, Special Focus on (BEFTN). The Internship Report is based on my 3 months attachment in Shahjalal Islami Bank Limited. In this report I provide information about the online banking facility of SJIBL in an integrated approach based on the information collected during the internship period.

It will be kind of you if you accept my report on the aforesaid topic. I hope you will be pleased with the report. I have given all my sincere effort in preparation of this report and will appreciate if you suggest anything about this report for any kind of rectification needed.

Thanking you. Sincerely yours,

Shanu Uddin Rubel ID No: 0901010054 Dept. of Business Administration Leading University, Sylhet.

February 05, 2013 Mr. Dr. Bashir Ahmed Bhuiyan, Assistant Professor, Head of the Department, Dept. of Business Administration Leading University, Sylhet.

Subject: Letter of Transmittal

Dear Sir, I have completed the Internship Report required to be submitted as a precondition for the completion of B.B.A. Program. The title of my report is Online Banking of Shahjalal Islami Bank Limited Sylhet Branch, Special Focus on (BEFTN). The Internship Report is based on my 3 months attachment in Shahjalal Islami Bank Limited. In this report I provide information about the online banking facility of SJIBL in an integrated approach based on the information collected during the internship period. It will be kind of you if you accept my report on the aforesaid topic. I hope you will be pleased with the report. I have given all my sincere effort in preparation of this report and will appreciate if you suggest anything about this report for any kind of rectification needed.

Thanking you, Sincerely yours,

Shanu Uddin Rubel ID No: 0901010054 Dept. of Business Administration Leading University, Sylhet.

LETTER OF CERTIFICATE

I am enormously pleased to declare that Shanu Uddin Rubel, a students from the Department of Business Administration, 21th Batch, Leading University, Sylhet, has been completed his Internship in Shahjalal Islami Bank Limited, Sylhet Main Branch. He has completed his internship report on the topic Online Banking of Shahjalal Islami Bank Limited Sylhet Branch, Special Focus on (BEFTN). He has reviewed all the relevant literature and provided good effort for collection of both primary and secondary data. I have supervised him throughout the preparation of the paper.

I also certify that the paper is an original one and has not been submitted elsewhere previously for publication in any form.

I wish him all the best in his effort.

Mr. M. Shahansha Molla Assistant professor Department of Business Administration Leading University, Sylhet-3100

TO WHOM IT MAY CONCERN

This is to assert that Shanu Uddin Rubel, ID No: 0901010054, a student of BBA Program, Leading University, Sylhet, has consummated good & proper a 03 (three) month long Internship Program at our branch from 1 October,2012 to 31 December, 2012. He was assigned the topic Online Banking of Shahjalal Islami Bank Limited Sylhet Branch, Special Focus on (BEFTN) to Study on Shahjalal Islami Bank Limited. To my best Knowledge, it is clear crystal that he abode by the dos & donts of the bank. His conduct towards the branch, Executives and Officers, Staffs and Customers was very satisfactory. I wish his glorious future.

PREFACE

Industrial internship is a program, which is conducted to acquire practical knowledge. It is believed that practical working experience will be added advance in our future life, which may also help to achieve our aim and ambition. It provides a chance to acquire knowledge from global business and earmark for executives. It identifies the practical phenomena including risk and opportunities and also enables to take probable alternative decisions. The knowledge is best on learning and experience.

It is really a matter of great pleasure that, I have completed my internship program in Shahjalal Islami Bank Ltd. Sylhet (Dhupdigir Par) Main Branch. This program was conducted from October 01, 2012 to December 31, 2012 after finishing my BBA examination 2012, Leading University Sylhet. By this Program, I am acquainted with the General Banking division of Shahjalal Islami Bank Limited.

This report has been prepared for the fulfillment of academic curriculum as required under the program. While preparing this report, I gathered practical experience of working and I also think that closer internship between student and teacher participating in the internship program are further gathered. Finally I would like to say that tireless struggle would become successful when any person or organization will get benefit from this report.

Shanu Uddin Rubel

B.B.A (Finance & Banking) 21st Batch ID: 0901010054 Leading University, Sylhet.

ACKNOWLEDGEMENT
At the very beginning, I would like to express my deepest gratitude to the almighty Allah for giving me the strength and the ability to finish the task within the scheduled time.

I am deeply indebted to my Internship Supervisor Mr. M. Shahansha Molla, Assistant Professor, Department of Business Administration, Leading University for his whole-hearted supervision during the Internship period. His valuable suggestions and guidance helped me a lot to prepare the report in a well-organized manner. I would like to thank our whole Department of Business Administration specially Head of the Department Mr. Dr. Bashir Ahmed Bhuiyan, Assistant Professor, for his support at the time of internship and preparing the report. My heartfelt gratitude goes to Md. Tufael Yakub, AVP & Head of Branch, Muhammed Siraj Uddin, Senior Officer, Mr. Mustafizur Rahman, Officer, and Mr. Foysol Ahmed, MTO, Shahjalal Islami Bank Ltd. Sylhet Branch for their keenness in giving me valuable information, which was very helpful to complete my internship report.

Finally I would like to thank all my co-workers in Sylhet Branch, Shahjalal Islami Bank Ltd. for their overall support and cooperation during my internship in the bank and also bank management for giving me an opportunity to complete my internship from Sylhet Branch, Shahjalal Islami Bank Ltd.

EXECUTIVE SUMMARY:

The World of business has become increasingly complex and time driven. The days when customers were willing or even able to wait in lines at the local bank counter to get their work done are almost history now. The internet revolution has brought with it a number of advances in modern bank dealings & online banking is one of them.

Online Banking is the performance of banking activities via the Internet. Online banking is also known as "Internet banking" or "Web banking." A good online bank will offer customers just about every service traditionally available through a local branch, including accepting deposits (which is done online or through the mail), paying interest on savings and providing an online bill payment system. Through online banking complex transactions can take place at lightning speed without the customer ever having to leave his/her place of work or home.

In the world of competition banks are trying to meet the demand of their clients, and seek to satisfy customer through their service. Online Banking is a greater mechanism through which banks increase their efficiency & able to satisfy the customer needs. The possibility of making online payments for various kinds of bills like utilities has also made online banking one of the most progressive developments of the 21st century. In the era of E-Banking most of the banks of Bangladesh perform their activity through online basis. Shahjalal Islami Bank also introduces online services in its entire branch, but the bank providing a few of the so-called online banking to its clients. But the bank is planning to provide these services over internet in a near future. After completion of this work, the account holders can able to get all kinds of online facility from the bank, and I think it will bring a boost in their performance and as well as their profitability.

Table of Contents:
Sections
Chapter 1: Introduction 1.1 Background of the Report 1.2 Objective of the Study 1.3 Methodology of the Study 1.4 Scope of the Study 1.5 Limitations of the Study Chapter 2: Theoretical Aspect of Islami Banking 2.1 Islami Banking Concept 2.2 Objective of Islami Banking 2.3 Islami Banking Movement in Bangladesh Chapter 3: Overview of SJIBL 3.1 Historical Background of SJIBL 3.2 Introduction of SJIBL Sylhet Main Branch 3.3 Department of SJIBL Sylhet Main Branch 3.4 Objectives of SJIBL 3.5 Vision & Mission 3.6 Our Strategies 3.7 Our Moto 10 10 11 11 11-12 12 12 6 6-7 7-8 2 2 3 3 4

Page No.

3.8 Corporate Profile 3.9 Organizational Structure 3.10 Board of Directors 3.11 Board of Committees 3.12 Executive Committee 3.13 Policy Committee 3.14 Management Team 3.15 Shariah Council of SJIBL 3.16 IT Position of SJIBL 3.17 Banking Software used in SJIBL Chapter 4: Products & Services of SJIBL 4.1 Deposit Services: 4.1.1 Mudaraba Savings Deposit (MSD) 4.1.2 Al-Wadia Current Account (ACD) 4.1.3 Mudaraba Short Notice Deposit (MSND) 4.1.4 Different Types of Scheme 4.2 Investment Services: 4.2.1 Bai-Muajjal Commercial TR 4.2.2 Bai-Muajjal (Real Estate) 4.2.3 Bai-Muajjal (FO)

13 14 14 14 15 15 15 16 16-17 17

19 19 19-20 20 20-23

23 23 23

4.2.4 Car Purchase Investment Scheme 4.2.5 CNG Conversion Investment 4.2.6 Investment Scheme for Marriage 4.2.7 Prottasha for Small Enterprises 4.2.8 Prottasha for Women Entrepreneur 4.2.9 Household Durable Investment Scheme Chapter 5: What I have learned in the Internship Program at SJIBL 5.1 Cheque Book Issue 5.2 Duplicate Cheque Book Issue 5.3 Return of the Cheque 5.4 Examined of the Cheque 5.5 Local Remittance 5.6 Cash Receive 5.7 Cash Payment Chapter 6: Online Banking of SJIBL Sylhet Branch, special focus on BEFTN 6.1 Definition of Online Banking 6.2 History 6.3 The common features of electronic banking in Bangladesh are as follows 6.4 The Advantages of Online Banking 6.5 Disadvantage of Online Banking

24 25 25-26 26 26-27 27

29 29-30 30 30 31-32 32 32

34 34 35 35-37 37-38

6.6 Constraints to E-Banking in Bangladesh 6.7 Online Banking Security 6.8 Online Banking in Shahjalal Islami Bank Limited 6.9 Users of Online Banking in SJIBL 6.10 Online banking Fees in SJIBL 6.11 What you need to have to access SJIBL Internet Banking 6.12 Security tips 6.13 Lacking of Online banking facility in SJIBL 6.14 Online Transfer Process through Computer 6.15 Electronic Funds Transfer (EFT): 6.16 Bangladesh Electronic Funds Transfer Network (BEFTN) 6.17 Participants in BEFTN 6.18 Authorization 6.19 EFT Transaction Flow 6.20 Consumer vs. Corporate Payments 6.21 EFT Credits of Shahjalal Islami Bank Limited Sylhet Main Branch Chapter 7: SWOT Analysis & Observation of SJIBL 7.1 SWOT Analysis 7.2 Observations

39 39-40 40 41 41 41 41-42 42 42 43 43 44-45 45 46-48 49 49

51 51

Chapter 8: Recommendations & Conclusion 8.1 Recommendations 8.2 Conclusion Chapter 9: Bibliography Appendix 53 54 56 58

Chapter One:
Introduction

1.1 Background of the Report:

This report originated as an academic requirement of BBA Program of Leading University. After completion of the program period a student must submit the report on the assigned topic to the department. The program is three months duration. The topic of the report is Online Banking of SJIBL Special Focus on (BEFTN). This is a Feedback which department accepts from the students who join in an organization after the completion of theoretical part of the BBA Program. My Institution supervisor Mr. M. Shahansha Molla Assistant Professor of Leading University assigned me the project for the report. The report will definitely help us to increase our knowledge about corporate world & will teach to apply theoretical knowledge in the practical life.

1.2 Objective of the Study:

The main objectives of the study are: To gather knowledge about the online banking facility provided by the SJIBL specially focusing on (BEFTN).

The Secondary objectives of this report are: To develop the practical knowledge by the practical orientation of work. To build up the pillar of the career for near future. To know about Shahjalal Islami Bank Limited (SJIBL) operational activities which is based on Islami Shariah. To know about Foreign Exchange operation of SJIBL. To identify the customer service of SJIBL.

1.3 Methodology of the Study:

Different data and information are required to meet the goal of this report. Those data and information were collected from various sources, such as, primary and secondary which is showed below: Primary Sources of Data: Personal observation. Face to face conversation of the officers. Face to face conversation of the client. Working at different desks of the bank.

Secondary Sources of Data: File study. Annual report of Shahjalal Islami Bank Ltd. Statement of affairs. Bank Rate sheet. Internet. Bangladesh Bureau of statistics report. Different publications regarding banking function.

1.4 Scope of the study:

Shahjalal Islami Bank Limited (SJIBL) is now well growing and its containing twenty-one branches in Dhaka, Sylhet, and Chittagong. The scope of the study will be limited to the organizational setup, function and operation of the SJIBL in the Bangladesh. This report mainly encompasses the online banking of SJIBL specially focusing on BEFTN. For the purpose of my internship program, I was assigned in the Sylhet Dhupdigir Par Branch at SJIBL and this provide me the way to get myself familiarized with banking environment for the first time indeed. I have an opportunity to gather experience by working in different departments of the Branch.

1.5 Limitations of the Study:

During the study, I have faced the following limitations: Three months time is not enough for such a widespread study. It is very complicated to collect all the required information in such a short period. Due to some lawful obligation and business confidentiality banks are unwilling to provide data. For this reason, the study limits only on the available published data and certain degree of formal and informal interview. The bankers are very busy with their jobs, which lead a little time to discuss with. In many cases, up to date information is not published.

Chapter Two
Theoretical Aspect of Islamic Banking

2.1 Islamic Banking Concepts:

Islamic banking (or participant banking) is banking or banking activity that is consistent with the principles of Sharia law and its practical application through the development of Islamic economics. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees for loans of money. Investing in businesses that provide goods or services considered contrary to Islamic principles is also haraam ("sinful and prohibited"). Although these principles have been applied in varying degrees by historical Islamic economies due to lack of Islamic practice, only in the late 20th century were a number of Islamic banks formed to apply these principles to private or semi-private commercial institutions within the Muslim community.

Dr. Ziauddin Ahmed says, Islamic banking is essentially a normative concept and could be defined as conduct of banking in consonance with the ethos of the value system of Islam.

Dr. Zakir Naik says, In Islam there is no different entity such as capital and organization, on land you pay rent, to labour, you pay wage, capital has profit and loss sharing and same is for organization while modern banking defines interest for capital. This is the basic difference of modern banking and Islamic banking.

2.2 Objectives of Islamic Banking:

An Islamic Bank is a financial institution that operates with the objective to implement and materialize the economic and financial principles of Islam in the banking area. The main objectives of Islamic Banking are: The main objective of an Islamic Bank is to Prohibit Muslims from dealing with interest or usury (Riba) which has been from dealing with interest or usury (Riba) which has been strictly prohibited by Allah and to protect them from one of strictly prohibited by Allah and to protect them from one of the biggest sins.

To establish participatory banking instead of banking on debtor creditor creditor relationship. To invest through different modes permitted under Islamic Shariah. To accept deposits on profit loss sharing basis. To establish welfare oriented banking system. To extend co-operation to the poor, the helpless and the low income group for their economic enlistment.

To play a vital role in human development and employment generation. To contribute towards balanced growth and development of the country through investment operations particularly in the less developed areas.

To contribute in achieving the ultimate goal of Islamic economic system.

2.3 Islamic Banking Movement in Bangladesh:

In August 1974, Bangladesh signed the charter of Islamic Development Bank and committed itself to recognize its economic and financial system as per Islamic Shariah.

Bangladesh government subscribed recommendation of Islamic Foreign Ministers conference held in Senegal in 1978 regarding systemic efforts to establish Islamic banks in the member countries gradually.

In January 1981, the then president of the Peoples Republic of Bangladesh while addressing the 3rd Islamic Summit Conference held at Makkah and Taif suggested, The Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce.

Earlier in November 1980, Bangladesh Bank, the countrys Central Bank, sent a representative to study the working of several Islamic banks of different countries.

In November 1982, a delegation of IDB visited Bangladesh and showed interest to participate in establishing a joint venture Islamic Bank in the private sector. They found a lot of work had already been done and Islamic banking was in a ready form immediate introduction.

Two professional bodies Islamic Economies Research Bureau (IERB) established in 1976 and Bangladesh Islami Bankers Association (BIBA) established in 1980 made significant contributions towards introduction of Islamic banking in the country. They came forward to provide training on Islamic banking to top bankers and economists to fill-up the vacuum of leadership for the future Islamic in Bangladesh. They also held seminars, symposia and on Islamic economics and banking throughout the country to mobilize public opinion in favor of Islamic banking.

At last, the long drawn struggle to establish an Islamic bank in Bangladesh became a reality and Islamic Bank Bangladesh Limited was founded o 30th March, 1983 in which 19 Bangladeshi national, 4 Bangladeshi institutions and 11 banks, financial institutions and government bodies of the Middle East and Europe including IDB and two eminent personalities of the Kingdom of Saudi Arabia joined hands to make the dream a reality. Al Baraka Bank Ltd. (now recognized as the Oriental Bank) was established in 1987. Al Arafah Islami Bank and Social Investment Bank Ltd. were established in 1995. Shamil Bank of Bahrain (Islamic Bankers) has started its operation in 1997. Shahjalal Islami Bank Ltd. was established in 2001. EXIM Bank Ltd. converted its entire banking operation into Islamic Banking from July 2004.

Nine conventional banks namely Prime Bank Ltd. Dhaka Bank Ltd. South East Bank Ltd. Premier Bank Ltd. The City Bank Ltd. Jamuna Bank Ltd. Arab Bangladesh Bank Ltd. Standard Chartered Bank and the HSBC have so far established Islamic Banking branches in some major cities. More connectional Bank such as Bank Asia Ltd. and BRAC Bank Ltd. are contemplating to establish Islamic banking branches in the near future. The first Security Bank Ltd. is switch over their entire banking to Islamic Banking.

Chapter Three
Overview of Shahjalal Islami Bank Limited

3.1 Historical Background of Shahjalal Islami Bank Limited:

Shahjalal Islami Bank Limited is based on Islamic Shariah. SJIBL is named after the name of a saint Hajrat Shahjalal (R) who dedicated his life for the cause of peace in this world and hereafter and served the humanity. Shahjalal Islami Bank Limited (SJIBL) commenced its commercial operation in accordance with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act, 1991. It started its Banking operation on May 10, 2005 with the 1st branch (main branch) opened at 58, dilkusha C/A, Dhaka obtaining the license of Bangladesh Bank, for enlistment of economic condition of its customers as well as to contribute sustainable economic growth and development in trade and industry of the country. Its corporate head quarter is situated at 10 Dilkusha C/A, Jiban Bima Bhaban, Dhaka-1000, Bangladesh. During last eleven years SJIBL has diversified its service coverage by opening new branches at different strategically important locations across the country offering various service products both investment & deposit. Islamic Banking, in essence, is not only INTEREST-FREE banking business, it carries deal wise business product thereby generating real income and thus boosting GDP of the economy. Board of Directors enjoys high credential in the business arena of the country, Management Team is strong and supportive equipped with excellent professional knowledge under leadership of a veteran Banker Mr. Md. Abdur Rahman Sarker.

3.2 Introduction of SJIBL Sylhet Main Branch:

It is the Main Branch of Sylhet City. It is situated at the 1st floor of Al Falah Tower, East Dhupa Dhigir Par Sylhet. This bank is design in one floor & in this floor bank also have a broker house. There are about 30 member works in this bank. Mr. Md. Tufael Yakub, AVP & Head of Branch.

3.3 Department of SJIBL Sylhet Main Branch:

General Banking Department. Cash Department. Remittance Department. Investment Department. SME Department. Clearing Department.

3.4 Objectives of Shahjalal Islami Bank Limited

The prime objective of Shahjalal Islami Bank Limited is to promote, foster and develop the application of Islamic principles, law and tradition to the transaction of financial, banking and related business affairs. It has also been looking forward to promote Investments Companies, Enterprise and other related concerns engaged in such business that is acceptable and consistent with Islamic principles, law and tradition. The objective of Shahjalal Islamic Bank Limited highlight in the follows:

To offer contemporary financial services in conformity with Islamic Shariah. To contribute towards economic development and prosperity within the principles of Islamic Justice.

To facilitate efficient allocation of resources. To help achieving stability in the economy.

3.5Vision & Mission: Vision:

To be the unique modern Islami Bank in Bangladesh and to make significant contribution to

the national economy and enhance customers' trust & wealth, quality investment, employees' value and rapid growth in shareholders' equity.

Mission:
1. To provide quality services to customers. 2. To set high standards of integrity. 3. To make quality investment. 4. To ensure sustainable growth in business. 5. To ensure maximization of Shareholders' wealth. 6. To extend our customers innovative services acquiring state-of-the-art technology blended with Islamic principles. 7. To ensure human resource development to meet the challenges of the time.

3.6 Our Strategies:

To strive for customers best satisfaction & earn their confidence. To manage & operate the Bank in the most effective manner. To identify customers needs & monitor their perception towards meeting those requirements.

To review & updates policies, procedures & practices to enhance the ability to extend better services to the customers.

To train & develop all employees & provide them adequate resources so that the customers needs are reasonably addressed.

To promote organizational efficiency by communicating company plans, polices & procedures openly to the employees in a timely fashion.

To cultivate a congenial working environment. To diversify portfolio both the retail & wholesale markets.

3.7 Our Motto: Committed to Cordial Service.

3.8 Corporate Profile:

Name of the Company Shahjalal Islami Bank Limited

Legal Form

A public limited company incorporated in Bangladesh on 1st April 2001 under the companies Act 1994 and listed in Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited.

Commencement of Business Head Office

10th May 2001

Uday Sanz, Plot No. SE (A) 2/B Gulshan South Avenue, Gulshan - 1, Dhaka-1212. 88-02-8825457,8828142,8824736,8819385,8818737 88-02-8824009 www.shahjalalbank.com.bd SJBL BD DH sblho@shahjalalbank.com.bd Alhaj Anwer Hossain Khan Md. Abdur Rahman Sarker 79 29 06 1,811

Telephone No. Fax No. Website SWIFT E-mail Chairman Managing Director No. of Branches No. of ATM Booth No. of SME Centers No. of Employees Stock Summary: Authorized Capital Paid up Capital Face Value per Share

Tk. 6,000 million Tk. 5,566 million Tk. 10

3.9 Organizational Structure:

There are five different wings to consist the organizational structure of SJIBL. They are Board of Directors Board Committees Executive Committee Policy Committee Management Team

3.10 Board of Directors:

The Board of Directors of 13 members. The Board of Directors is the apex body of the bank.

Chairmen

Vice Chairmen

Directors

Managing Directors

Secretary

3.11 Board of Committees:

The Board of Directors also decided the composition of each committee and determines the responsibilities of each committee.

3.12 Executive Committee:

All routine matters beyond delegated powers of management are decide upon by or routed through Executive Committee, subject to ratification by the Board of Directors.

Chairmen
Deputy Chairmen

Directors
Managing Directors

Secretary Legal Adviser Auditors

3.13 Policy Committee:

All matters relating to the principles, rules and regulations, ethics etc. operation and management of the Bank are recommended by the Committee of the Board of Directors.

3.14 Management Team:

Managing Directors

Executive Vice President

Vice President

Sr. Asst. Vice President

Assistant Vice President

3.15 Shariah Council of Shahjalal Islami Bank Limited:

Shariah Council of the Bank is playing a vital role in guiding and supervising the implementation and compliance of Islamic Shariah principles in all activities of the Bank since its very inception. The Council, which enjoys a high status in the structure of the Bank, consists of prominent ulema, reputed banker, renowned lawyer and eminent economist. Members of the Shariah Council meet frequently and deliberate on different issues confronting the Bank on Shariah matters. They also conduct Shariah inspection of branches regularly so as to ensure that the Shariah principles are implemented and complied with meticulously by the branches of the Bank.

3.16 IT Position of SJIBL

Gulshan Branch, Dhaka. Foreign Exchange Branch, Dhaka. Kawran Bazar Branch, Dhaka. Joydevpur Chowrasta Branch, Gazipur. Agrabad Branch, Chittagong. Khatunganj Branch, Chittagong. Sylhet Branch, Sylhet. Beanu Bazar Branch, Beanibazar, Sylhet. Dargah Gate Branch, Sylhet. Uttara Branch, Uttara, Dhaka. Dhanmondi Branch, Dhanmondi, Dhaka. Shatmoshjid Branch, Shatmoshjid Road, Dhaka.

Now a days technological service is the key factor for the service providers in the financial institutions. To compete with the local and foreign banks they should consider the On-line banking facilities as an add-on service to the clients. To introduce & explore their products & services worldwide, to get and handle with their prospective local & expatriate customers, to make correspondence with foreign organizations & institutions, they should introduce real on-line banking facilities immediately. This will facilitate them to attain a strong position in the Competitive world. And I think online banking will make the way easier for SJIBL to satisfy the customers require & able to lead in the Banking area of Bangladesh.

3.17 Banking Software Used in Shahjalal Islami Bank Limited:

Shahjalal Islami Bank Limited uses Pc Bank 2000 Software for its banking operation. It is well developed customized software that has been capable to perform all banking function. Some of the new branches use Bank Ultimus Software which is more updated then Pc Bank 2000.

Chapter Four:

Products &Services of Shahjalal Islami Bank Limited

4.1 Deposit Services:

Shahjalal Islami Bank Limited starts a mixture of gorgeous deposit schemes from the very beginning of its operation. The bank is always making its effort to introduce more new & attractive deposit schemes for its customers. Currently the Following Deposit Schemes are offered in Shahjalal Islami Bank Limited.

4.1.1 Mudaraba Savings Deposit (MSD):

This deposit scheme is for those clients who are interested to save some money for their future benefits. In addition, a great number of people open this account to deposit the foreign remittance. It is also very easy to maintain to get all other banking services. Minimum opening Deposit is Tk. 1000 & Profit rate of MSD account is 4% (approx.)

Requirements: The basic requirements to open this account are discuss in the followingThe Form of MSD should be filled correctly. The Clint need to provide 2 copies of passport size photograph, introducers signature, & Photocopy of National ID Card/ Certificate/ passport copy to open this saving account.

4.1.2 Al- Wadia Current Deposit (ACD):

Shahjalal Islami Bank Limited receives deposits in its Al Wadia Current Account. It has some similarity with the current account of conventional bank. The term Al Wadiah Current Deposit means deposit of money allowing somebody to sue it. Banks being trustee preserves and keeps or in safe custody of what is deposited. Depositors feel safe in keeping their money with the bank and take transaction facilities. Bank provides assurance of returning money to the depositors on demand. In the process of opening Al-Wadiah Deposit, the bank gets approval of the depositors regarding the use of the deposited money and earns profit out of their development. Any losses incurred by way of such investment are totally borne by the bank. Thus, the depositors dont take the risk of losses with Al-Wadiah Current Deposit; they also dont

expect any profit from it. Depositors are provided with chequebook. They can withdraw or deposit any amount as and when they like. Bank may charge a fee in the account. Al-Wadiah Deposit is short terms and very uncertain, thus banks have to be very useful in the investment of money from this account. Requirements: The client needs to provide of passport size photograph, Trade License, Tin Certificate (if Applicable). Profit rate: No profit is given to maintain this account.

4.1.3 Mudaraba Short Notice Deposit (MSND):

The MSND account is different from the interest-based banks. It is also a Time Deposit account. The formalities for opening of this account are similar to those required for Al-Wadiah Current Account. The only difference is that seven (7) days notice is required for withdrawal of any sum and profit is paid. The rate of profit for this account is 5%. If the withdrawal on demand is desired, it may be paid subject to the for-feature for the period of notice or the expired of notice. Minimum opening Deposit is Tk. 5000.

4.1.4 Different Types of Scheme: The Shahjalal Islami Bank Limited (SJIBL) is containing some Deposit Scheme, which are the really profitable for bank and customer. The Bank maintains Shariah based transaction with their customer by different Scheme those are: 1. Monthly Deposit Scheme (MDS) 2. Mudarah Term Deposit Receipt (MTDR) 3. Monthly Income Scheme (MIS) 4. Double / Triple Profit Deposit Scheme 5. Millionaire Scheme. 6. Hajj Scheme.

Monthly Deposit Scheme (MDS/DPS): This account open very easy and there are no fixed day to open. Account holders do not need any savings account if he/she directly pays their monthly installment. Account holders carefully complete the MDS form and attests two copies passport size photograph one nominee and other own with form. Account holders can pay advance to continue their installment or can give permanent instruction from his/her savings account. In this term, the account holders are bound to pay Tk.50 for transferred and Tk.5/- for service charge. If the account is close before the maturity then profit will be calculate according to saving rates. If a depositor fails to pay calculate as Savings rate. But for the first six-month no profit will be calculate. Nominee will enjoy the profit will in absence of the accountholder. Duration for MDS is 5, 8, or 10 years. Profit rate for this account is 11.20% (approx.). Installment Amount per month: Tk. 100, 250, 500, 1000, 2000, 5000, 25000 or 50000. Mudaraba Term Deposit Receipt (MTDR): It is like a fixed deposit in the conventional banking system but it does not receive or accept interest father, this account give profit and collect deposits. For this Account opening minimum balance Tk.100000 is required, maximum amount is as much as the client want. If a customer withdraw his/her money before one month than he/she will not get any kind of profit. On the other hand, after the matured if client dont withdraw his/her money than it will be auto renewed with imposed profit for the next days. If a depositor would like to withdraw his profit after six months he/she will get the profit accordance with previous years profit rate. After the announced yearly profit or loss, if bank felt in loss posting then the depositor bound to incur the loss. In absence of account holder the selected nominee will get the money. Account holder bound to pay 10% Tax yearly if the account holder submit TIN number, if he doesnt then he have to pay 15% Tax on his profit. Duration for MTDR is 1, 2, 3, 6, and 12 Month. Monthly Income Scheme (MIS): This scheme is very popular in our country, job retreat people opens this scheme. And which people are not able to do business than they are wanting to safe from risk and they open it. It is the scheme for profit earning. In this account depositor can deposit minimum of Tk. 50,000/- and above. Depositor will get Tk500/ against Tk. 50,000/-. And it is the fixed deposit for 3 (three) years. Profit rate for this account is 12%. If the accountholder want to close his/her account before maturity date than he/she will get profit accordance with savings rate that is 5.5%. If the account is close before the maturity then profit will be calculate according to saving rates. In the absence of accountholder, the specified nominee will get the whole benefit. The profit rates of this account are:

Double / Triple Profit Deposit Scheme:

The Shahjalal Islami Bank gives the facility to the client by the Islamic Shariah Mudaraba rules and regulations. In this scheme depositors can deposit more than Tk.10, 000 for 6 years and after the maturity date accountholder will receive double than his/her deposited amount. If the account holder deposit this money for 9 & month he will receive triple than his/her deposited amount. If the account is close before the maturity then profit will be calculate according to saving rates. Depositor will get 80% investment facility by deposit the deposit receipt. Bank can invest this amount any sector by the Islamic Shariah rules and regulations. Accountholder are bound to pay any government tax. For opening this account applicant need recent one copy his and his nominees photograph. Millionaire Scheme: It maturity is long than other scheme. Generally this account is designed for lower or middle class working people. Through this account anyone can be the owner of 1 Million Taka if the accountholder provide monthly installment continuously to the end of the maturity period. The depositor should deposit monthly installment to the account within first 15 days of the month; neither will he/she be designated as debtor to the bank. If 15th date is the off day then the next working day will be schedule date. Accountholder have the right to provide advance installment. If the accountholder have the current or savings account he can provide monthly installment of the millionaire scheme, but to do that the accountholder must have fill up the form of Standing Order. For the permanent standing order the accountholder have to pay Tk.50 as a service charge. Accountholder can open more than one account in the same Branch. Depositor will get 80% loan facility against the deposit money. No chequebook will be issued for this account, but the bank will provide deposit book. Hajj Scheme: Most of the people cant go for Hajj because they cant afford the money for it. SJIBL provide a superb scheme through which people can accomplish their dream. People who have 18 years age is eligible for the scheme. Duration for the Hajj Scheme is 1 to 25 years (12 monthly installments are considered as a 1 year). The depositor should deposit monthly installment to the account within first 15 days of the month; neither will he/she be designated as debtor to the bank. If 15th date is the off day then the next working day will be schedule date. If the accountholder fail to pay five installments the account will be automatically closed. Accountholder have the right to provide advance installment. Before maturity date accountholder can close the account by providing Tk.100 as a service charge.

4.2 Investment Services:

There are some eye-catching investments facilities are offered in Shahjalal Islami Bank Limited. The Brief explanation of these services is given below:

4.2.1 Bai-Muajjal Commercial TR: It is an agreement between bank and client whereby bank delivers goods to the client upon deferred payment, i.e. the client shall pay the price at some future date at a time, by lump sum or by installment. Under this mode of investment, bank is not supposed to disclose cost price and profit separately. Goods are delivered on trust and Trust Receipt is obtained for legal implication.

4.2.2 Bai-Muajjal (Real Estate): Mode of operation and principle of this product are alike Bai-Muajjal Commercial TR. Difference is with the purpose, i.e. the facility is only extended against construction or purchase of building, apartment etc.

4.2.3 Bai-Muajjal (FO): The Bai-Muajjal Financial Obligation (FO) is another type of facility that the bank offers to its clients. One can give his MTDR/MIS as a security to lend money from bank. She/he will sign a deed to return the money with some negotiable profit in the period of 1 year. It is also renewable after 1 year.

4.2.4 Car Purchase Investment Scheme: Maintaining a car now a day is no more a luxury, but an essential part of daily working life to add speed to its performance and taking this as view Shahjalal Islami Bank has introduced Car Purchase Investment Scheme. Potential users of personal cars are requested to contact any of the branches of the bank for availing the facility within shortest possible time at very easy terms.

Purchasable Car Brand New or Reconditioned Private Car Microbus

Eligibility Age between 20 to 55 years Permanent employees of a). Govt., Semi Govt. and Autonomous Bodies b). Banks and financial institutions c). senior teachers of University, Govt. School, College and Madrasha d). Executives/Officers of Multinational Companies and renowned NGOs Worthy businessman having trade license, VAT certificate and TIN Ceiling Period Maximum 5 years for brand new Maximum 4 years for reconditioned Maximum Tk. 40.00 lac for brand new Maximum Tk. 30.00 lac for reconditioned

Down payment Minimum 10 % for brand new Minimum 20 % for reconditioned

4.2.5 CNG Conversion Investment: Convert your vehicle into CNG system - reduce fuel cost - save money. Plan to convert your car at CNG system. Worried about conversion cost? No problem, Shahjalal Islami Bank is beside you to solve the problem. Yes, you may avail investment facility of Shahjalal Islami Bank under CNG Conversion Scheme at a very easy terms & Conditions. Interested vehicle owner are requested to contact any of the branches of the bank for availing the facility within shortest possible time. Eligibility Any permanent salaried executives of Corporate Houses, Renowned Private Companies, Banks, NBFI, Multi National Company(s), Renowned NGOs, Government Office, Semi-Government and Autonomous Bodies. Self-employed persons like Doctors, Engineers, Charted Accountants, etc. Ceiling: BDT 40,000 to BDT 1, 00,000. Period: Maximum 18 months. Profit Rate: Most competitive in the market.

4.2.6 Investment Scheme for Marriage: Do you want the best memories of the marriage day of yourself or your loving daughter/ son/sister/ brother to cherish? Do you want to celebrate the marriage day with pride and joy? But also want to make sure that all arrangements are made well in advance & every comfort meticulously provided for? Shahjalal Islami Bank Marriage Investment Scheme can give you the relief for all. Eligibility Any Bangladeshi salaried or a self employed person having 2 (Two) years professional experience Investment Amount: Maximum Tk.3, 00,000/Period: Maximum 48 months. Age: 25 years to 60 years.

Repayment Mode: Equal monthly installments. Profit Rate: Most competitive within your reach. Special Feature: Partial adjustment or Full Pre-payment of liability at any time allowed without any early settlement charge.

4.2.7 Prottasha for Small Enterprises: Shahjalal Islami Bank Limited (SJIBL) is firmly committed to implement and materialize the economic and financial principles of Islam in the Banking Arena. The very essence of Islamic mode of banking is to remove the disparity through establishing equity justice in trade, commerce and industry sector, creating opportunities for employment, boosting up income generation which ultimately helps alleviation of poverty from the society. Keeping the view and as an active contributor in the economic growth of Bangladesh, Shahjalal Islami Bank Ltd. has initiated SME Investment throughout the country. Target Group Small sized Trading, Manufacturing and Service oriented business

Purpose Tenor Minimum 12 months and maximum 36 months To meet Working Capital requirements of an existing business

Profit Rate Most competitive in the market

Security Personal guarantee Collateral security (case to case)

4.2.8 Prottasha for Women Entrepreneur: It is well-known that women's empowerment and economic development go hand-in-hand. Now a days Women Entrepreneurs are receiving greater attention from policymakers and experts in developed and developing countries. In our country, Women Entrepreneurs are also encouraged to contribute to the national economy through establishing and expanding small & medium enterprises all over the country. Shahjalal Islami Bank Limited (SJIBL) is extending investment to Women Entrepreneurs for their business all over the country through its Small & Medium Enterprise (SME) Investment program on easy terms and conditions. Target Group Small sized Trading, Manufacturing and Service oriented business

Purpose To meet Working Capital requirements of an existing business

Repayment By easy monthly installment

Security Personal guarantee Collateral security (case to case)

4.2.9 Household Durables Investment Scheme: Purpose Facilitate investment to purchase household durables to the different low & medium income honest businessman/professionals. Socio-economic improvement of the country through improvement of life style of the low.

Ceiling of Investment Maximum ceiling of the investment will be Tk 5.00 lac per client. Size of the investment will be fixed as such the monthly installment against the investment

Repayment Procedure: Monthly Installment basis.

Chapter Five:

What I have learned in the Internship Program at SJIBL

In the Internship Program I basically work in the general banking department & I have learned many things about General Banking. In the following I would like to highlight the things what I have learn in my Internship Program: 1. Different types of account opening of SJIBL. 2. Procedures maintain & document collection for opening different types of account. 3. Cheque book issue. 4. Duplicate Cheque book issue. 5. When the cheques return & how to examine a chaque. 6. I have gather knowledge about Demand Draft, Payment Order, Telegraphic Transfer & procedure required to maintain. 7. Different types of instrument through which Chas received & Payment are done.

I have previously discussed briefly about different types of account of SJIBL & procedure maintain for each account. So in the following I have discuss about the remaining things-

5.1 Cheque Book Issue:

Cheque Book is a material to withdraw money from the bank. It is a very convenient way to transact money from one place to another without any accident. If anyone opens an account then she/he will apply for a Chequebook on requisition slip. After verifying the signature of the account holder by the officer issues Cheque. After issuing the chequebook it requires 4 day to come MICR chequebook from Dhaka head office. When the issuing chequebook came we will assign numbers to the leaves of the Chequebook and account number in the register book. Then the Chequebook is delivered to the party after taking the signature on the register book from the party.

5.2 Duplicate Cheque Book issue:

When a party looses his/her Chequebook, then he/she applies for duplicate Chequebook. Bank stop payment order for that lost Cheque book series in the respective ledger. Then client needs guarantors

certificate and guarantor must be an account holder of that branch with sufficient balance. In this case, the party will apply to the branch manager for duplicate Chequebook. The party must give indemnity bondage referring that he/she will liable for any fraud-forgery by the lost Cheque. After the formalities Bank issue of new Chequebook for client.

5.3 Return of the Cheque:

A Cheque may be returned by the following reason: Account Closed. Insufficient funds. Payment stopped. Drawn against uncollected funds. Amount in words and figure differ. Drawers signature differs. Cheque postdated. Date incomplete/missing. Clearing house stamp missing.

5.4 Examined of the Cheque:

The Passing official must examine the followings: Whether the instrument presented is related to the branch. The instrument is not undated/anti-dated/post-dated. The instrument is not crossed since crossed instruments are not payable over the counter. The amounts is words and figures are written and do not differ. There is no alternation anywhere on the instrument. In case of order Cheque the proper identification of the payee ensure to the satisfaction of the Bank. The instrument bears the signature of the drawer.

5.5 Local Remittance:

Local Remittance means sending money from one place to another for the customers and it is very important service system in our country. For this service, our country business sectors are get facility by transfer funds from one place to another. Some of the instrument that Shahjalal Islami Bank Limited, Foreign Exchange Branch provides are huge beneficial to the clients. These are: 1. Demand Draft (DD) 2. Pay Order (PO) 3. Telegraphic Transfer (TT)

Demand Draft (DD): Demand Draft is an order of issuing bank in another branch of the same bank to pay specified sum of money to the payee on demand. It is generally issued when customer wants to remit money in any place which is out of the clearinghouse area of issuing branch payee can be client himself or another. Bearing money may be risky. It is a negotiable instrument and it can be crossed or not. For payment of DD, paying branch first has to be confirmed that the DD is not forged one. First bank Cheques the Test Code mentioned on the draft. If Taste Code agrees then believe that DD is not forged and makes payments. For further confirmation, the issuing bank sends an advice about the DD to the paying branch. Pay Order (PO): This is very important instrument of the Bank. Pay Order gives the payee the right to claim payment from the issuing bank. It can be en-cashed from issuing bank only. Unlike Cheque, there is no possibility of dishonoring pay order because before issuing pay order banks takes out the money of the pay order in advance. Pay order cannot be endorsed or crossed and so it is not negotiable instrument. Telegraphic Transfer (TT): Telegraphic Transfer is the quick service system than others. By this method money is transfer to another place by telegraphic message. Generally for such kind of transaction payees should have account with the paying bank. Otherwise it is very difficult for the paying bank to recognize the exact payee. Test code is also furnished on the TT message for the protection of it. When sending money is urgent then the bank

use telephone for remittance. This service is only provided for valued customers. Who is very reliable and have long-standing relationship with bank.

5.6 Cash Receive:

Cash is the life of a bank. Different types of from are use for cash deposits for different types of accounts. Cash may be received by the following ways: Current of Savings account pay-in-slip Credit voucher Different types of instrument remittance (TT, DO, PO etc.) are received by respective forms. Share collection Different types of scheme

5.7 Cash payment:

Cash is paid in payment counter against the following instrument: Cheques Cash debit voucher Pay-in-slip Pay Order, DD etc.

Chapter Six:

Online banking of SJIBL Sylhet Branch, special focus on (BEFTN)

6.1 Definition of Online Banking:

The performance of banking activities via the Internet. Online banking is also known as "Internet banking" or "Web banking." A good online bank will offer customers just about every service traditionally available through a local branch, including accepting deposits (which is done online or through the mail), paying interest on savings and providing an online bill payment system.

6.2 History:

The history for the modern home electronic banking services were the distance banking services over electronic media from the early '80s. Online services were first come to us in New York in 1981 when four major banks among all other banks were started offer home banking services. The UKs first online banking services were first formed by Nottingham Building Society in 1983. The system was based on UKs Prestel system and maintained by use of a computer, such as the BBC Micro, or Keyboard connected to the telephone system and television set. Electronic banking is known to us since 1990. In Bangladesh, some multinationals incepted the ATM booth in Dhaka since 1992-93. In Bangladesh Dutch Bangla Bank is the first bank for Electronic banking system who introduced first online banking system as Bangladeshi bank. The automation was completed in 2003, but all the other facilities are being changing day by day and making it up grade continuously. All of the services are free-of-charge and can be affordable for everyone. Today many large national banks, regional banks, credit unions, even smaller banks offer some form of online banking, variously known as Pc banking, Home banking, Electronic banking or Internet banking. Most of the large banks now offer fully secure, fully functional online banking for free or for a tiny charge.

6.3 The common features of electronic banking in Bangladesh are as follows:

Electronic banking idea developed in Bangladesh since 1992 through several multinational banks. But most of the local and foreign banks are maintained electronic banking in their all branches. Here some common features of electronic banking in Bangladesh. Those are following below:1. 24- hours cash withdrawal facility 2. Quick cash withdrawal without having queue 3. Account activities enquiry in any moment 4. Statement request through ATM/Debit/Credit Card 5. Transfer own funds to other account number in same bank 6. Present Balance enquiry 7. More than16- hours shopping facilities 8. Deposit or Mail cash or check(s) (Cross check) through mechanical device. 9. 11. Mini statement which contain 8-10 previous transaction records 10. 12. Can able to pay utilities bill 11. 13. Withdraw money by using VISA, PLUS, MASTER, and other credit card 12. 14. Withdraw money from dollar account which gives taka by converting foreign currency

6.4 The Advantages of Online Banking:

There are many reasons why online banking has emerged as a staple of daily life. Its fast, safe and convenient. It also means that there is no more need to travel to your nearest bank for basic services any longer. Here are some of the other advantages that banking online offers:

24/7 Services: Banking online means that the banks no longer need to keep their branches open around the clock. That means you can simply login to the website of the bank and get what youre looking for. Self-service is the key here.

Monthly Statements: With online banking there is no need to visit the bank, call up the branch, or wait for a financial statement to come in the mail. All you have to do is login online and download a copy of your statement. This adds a great deal of convenience for those who are hard pressed for time. Similarly, if you need your statement to prove income when you're looking to rent an apartment or something, you no longer need to wait for the bank to send you a statement. It'll always be available online.

Cost Effective: Internet banking is very cost effective. It does away with the need to have too many personnel or clerical staff around in the bank. It also raises efficiency in that many customers can be served all at the same time.

Paperless: Internet accounts allow all transactions to be done without using paper. This saves tremendous amounts of paper, and thus contributes to significant savings on the banks part. Plus it also aids in being environment friendly.

Transfer of Funds: With online banking there is no need to visit your bank to ask them to transfer funds from one account to another. Whats more, with internet banking you can even transfer funds across countries and continents! You can also schedule monthly payments to be made out of your account automatically.

Loan Applications: Through banking on the internet any customer can apply for a loan without even having to visit their local branch. You can sell and buy stocks and shares, open a new account and even close an existing account, all with very little effort on your part.

Geographical Convenience: With internet banking, it doesnt matter where youre located. You could be in any part of the globe and still be able to check on any financial transaction online.

Asset Management: Banking through the internet has made the effective management of all your assets possible. Most of todays banks provide sophisticated tools and mechanisms for you to aggregate accounts, get alerts on market activity, get stock quotes, as well as manage your portfolio of investments.

The Time Constraint: One of the most important advantages online banking offers is the convenience of conducting all financial transactions from the comfort of ones office or home. This is a great advancement for those who do not have the time to visit their local branch. Especially when it comes to the basic transactions like opting for statements, requesting a new cheque book or even transferring funds, internet banking can really speed up the entire process.

Online Bill Pay: Banking through the internet has made bill payment easier than ever before! You can pay your credit card, electric, water, phone, and other bills by just logging into the banks web portal. Many of the banks today offer a service called Electronic Clearance Scheme or ECS through which you can automatically debit funds from your account to pay particular bills or investments. Most mutual fund investments are carried out in this manner.

6.5 Disadvantage of Online Banking:

The world has come from far and we are every day digging into the unknown, what was unthinkable then is now a practice. Today, you can bank right from the comfort of your home and multitudes of benefits come with it. However, though internet banking is such a good and desirable innocent, it has some disadvantages as listed:

Setting up an account may take time: In order to register for your bank's online program, you will probably have to provide ID and sign a form at a bank branch. Some banks even ask for photos. It takes time for maintaining the procedure.

Legal issues: If you and your spouse wish to view and manage your assets together online, one of you may have to sign a durable power of attorney before the bank will display all of your holdings together.

Learning difficulties: Banking sites can be difficult to navigate at first. Getting acquitted with the banking sites software may require some time to read the tutorials in order to become comfortable in your virtual lobby.

Site changes and upgrades: Even the largest banks periodically upgrade their online programs, adding new features in unfamiliar places. In some cases, you may have to re-enter account information.

Internet account: You need to get an account with an Internet Service Provider (ISP) which may be another hectic experience

Security concern: Even though online banking sites are heavily encrypted, with the developing technology, its hard to rule out the "hackers" who may access your bank accounts

Switching banks: This can be more cumbersome online than in person Money usage: You cant spend your money from the online bank account as you wish, in the end; you will need to go to an ATM to withdraw money for usage.

Technical breakdowns: As with all technologies, online banking websites sometimes go down. If this happen when you closed your local bank or credit card accounts, you will definitely go penniless.

However, even though online banking has some disadvantages, the advantages with no doubt outweigh. It is there for important for everyone to prepare for the unknown with an online bank account.

6.6 Constraints to Online Banking in Bangladesh:

Foreign and private banks offered a broad range of services over the internet. Public sector banks lag behind in offering wider range of internet banking services and products. But there is a constraint to EBanking in Bangladesh, which are highlighted in the following: At present, there is no proper infrastructure for performing Electronic banking activities in Bangladesh. Slow uptake of internet access and PCs. Poor telecommunication network policies and slow paced regulatory initiatives. Very minimum number of users of internet. The banking infrastructure in terms of electronic payments and inter-bank connectivity is poor. Limitations of supportive legal system. Lack of skilled IT workforce.

Absence of cyber law. Absence of EFT (Electronic Fund Transfer) legislation. Absence of need based business plan for online banking ATMs may have network problems, unavailability and shortage of money. Lack of awareness at customer level of E-banking issue. Weather has a direct effect towards e-banking. If create heavy rain, flood or cyclone then the entire network is down.

6.7 Online Banking Security:

All Banks are very conscious of the security of all customer information. The banks have taken steps to protect the confidentiality of the accounts. All Online Banking transactions sent over the Internet are specially encrypted using 128-bit encryption to maximize online banking security. Only registered users can access online banking. When clients register, he/she will receive a unique access ID number & a temporary PIN. The first time the clients use the service, they are asked to select a PIN of their choice. Therefore, no one else can access the clients information, and they must keep these numbers confidential. Online banking includes a special service called Secure Email they allow the clients to communicate with the bank throughout the online banking. This is provided in a secure environment to protect the information. To protect the privacy, the banks recommended the clients not to use standard Internet email when communicating information about the accounts.

6.8 Online Banking in Shahjalal Islami Bank Limited:

SJIBL E-Banking allows the customers of the bank to perform their banking activities on Secured Banking Anytime Anywhere. It facilitates the customer to access the bank in secured channel through internet staying anywhere of the world at any time of a day.

Security guaranty: SJIBL ensures the security of its customers by implementing the worlds best security certificate (SSL) on its internet banking server. The security certificate secures the valuable data and transactions of a customer through proper encryption.

Available Services:

Balance Inquiry Cheque Book Details Stop Cheque Request Limit Inquiry Clearing Cheque Status Address Change Request Profit Details Transaction Details Cheque Book Requisition Term Deposit Details Customer Information Statement Request Investment Repayment Schedule

Upcoming Services:

Standing Instructions Utility Bill Fund transfer

6.9 Users of Online Banking in SJIBL:

The Online banking service is set in Shahjalal Islami Bank Limited. In this bank, Current account holders take majority position of online facility. Because, they are mostly businesspersons & traders who need frequent transactions in different cities & towns. Through this online banking facility their transactions can be made easily. Beside the current account holder others types of account holder get the facilities of online banking. Online banking helps the clients to get information from home & can make transaction at less period of time. It is essential to be say that not only the clients but also the bankers of SJIBL enjoying the benefits of online banking.

6.10 Online banking Fees in SJIBL:

Shahjalal Islami Bank Limited charges TK. 600 as online banking fees in a year. The total taka has been realized in two times in a year. After each 6 months, Tk.300 has debited from the account as online service charge. The account holder can get online banking services as many times as he/she wants by giving this charge.

6.11 What you need to have to access SJIBL Internet Banking:

You must have to open a bank account at any branch of Shahjalal Islami Bank Limited. You must have an active email address and mobile phone number. Download the internet banking registration form. You can also collect the form from your nearest branch.

Fill up the form and submit it to the branch where you maintain your account or any nearest branch.

You will get your internet banking username and initial password within the next working day of submitting the form through your email.

6.12 Security tips:

To be more secured from the customers end the customer should follow the following security tips:

Change your password regularly and make it at least 6 digits with alpha numeric combination, special character and capital and small letter combination.

Dont use your date of birth, telephone/mobile number or any common information as your password.

Never disclose your password to anyone event to the employees of SJIBL. Never write down your password on anything.

SJIBL will never send any email with a link to click. If you find such email any time then please ignore it or contact with SJIBL.

Never provide your confidential information like internet banking username, password in any page except the Internet Banking Login area.

Ensure logging off from your user ID after completion of your activities. Avoid using internet banking form any public computer like cyber caf.

6.13 Lacking of Online banking facility in SJIBL:

Through the bank providing all the basic online services to its clients, the so-called Online or Internet Banking is not fully organized in this bank. The total solution of online banking service means, the accessibility of account holder to their accounts by using their own PIN & Password over internet; i.e.; one can have almost all banking services without visiting any branch of the bank. Moreover, there is a strict restriction over online viewing of account information; the permission of branch manager is required in this concern.

6.14 Online Transfer Process through Computer:

In banking software (Pc Bank 2000) there is an option exists to perform all online transactions. The process of online service is starting with the use of an option named Remote Transaction. In Remote Transaction, the branch name & branch password is needed to enter into the database of clients of another branch. Only one minute is required, permission is given through this process to make an online transaction to another branch. By using the option, an officer can do online cash deposit, cheque payment & transfer of funds.

6.15 Electronic Funds Transfer (EFT):

Electronic funds transfer (EFT) is the electronic exchange, transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems.

6.16 Bangladesh Electronic Funds Transfer Network (BEFTN):

A new era of online banking is open to the people of Bangladesh. Now they are under the debit transaction facility that is offered by the Government owned Bangladesh Bank (BB). BBs electronic fund transfer (EFT) network is very simple and designed to provide people a painless, quicker and hassle free service across the country. BEFTN has started its 'Live Operation' on 28th February 2011 with the objective to decrease paper-based payment methods and encourage paper-less payment methods for secured, faster & cost-effective transactions especially at the corporate levels. Bangladesh Automated Clearing House has two components, the Bangladesh Automated Cheque Processing System and Bangladesh Electronic Funds Transfer Network. The Network started with credit transactions and started debit transactions from 15 September 2011. Now, people can give their utility bills and different taxes using the EFT system. It will not only save a lot of time but also reduce the transaction cost for both the clients and organizations. EFT system also supports remittance transfer which opens a new era in the country economy. Electronic payments are recent developments in the payment system arena of our country, the term used for any kind of payment processed without using cash or paper based instruments. Forms of electronic payment includes EFT, Card based payments, Internet payments and Mobile payment. Unfortunately most of the people are not aware of this service. They still stand in queue in bank to pay their bills at the end of each month. BB should advertise their new service all over the country. Also concerned people should step forward to participate in this program. Thus, EFT system can be populated among both the people and organizations.

6.17 Participants in Bangladesh Electronic Funds Transfer Network:

The EFT Network is a multilateral electronic clearing system in which electronic payment instructions will be exchanged among Scheduled Banks. The system involves transmitting, reconciling and calculating the net position of each individual participant at the end of each processing cycle. The participants involved are:

(a) Originator. (b) Originating Bank (OB) (c) Bangladesh Electronic Funds Transfer Network (EFT Operator) (d) Receiving Bank (RB) (e) Receiver (f) Correspondent Bank

a) Originator: The Originator is the entity that agrees to initiate EFT entries into the network according to an arrangement with a receiver. The originator is usually a company, government agency or an individual directing a transfer of funds to or from a consumers or a companys account. The originator executes an EFT fund transfer entry through an Originating Bank (OB). b) Originating Bank (OB): The originating bank is the bank which receives payment instructions from its client (the originator) and forwards the entry to the BEFTN. A bank may participate in the EFT system as a receiving bank without acting as an originating bank; however, if a Bank chooses to originate EFT entries, it must also agree to act as a receiving bank. c) Bangladesh Electronic Funds Transfer Network (BEFTN): BEFTN is the central clearing facility, operated by Bangladesh Bank that receives entries from OBs, distributes the entries to appropriate RBs, and facilitates the settlement functions for the participating banking institutions. d) Receiving Bank (RB): The receiving bank is the bank that will receive EFT entries from BEFTN and post the entries to the account of its depositors (Receivers).

e) Receiver:

A receiver is a person/organization who has authorized an Originator to transmit an EFT entry to the account of the receiver maintained with the Receiving Bank (RB). f) Correspondent Bank: In some cases an Originator, Originating Bank or Receiving Bank may choose to use the services of a Correspondent Bank for all or part of the process of handling EFT entries. A Correspondent Banks function can include, but is not limited to, the creation of EFT files on behalf of the Originator or acting on behalf of an OB or RB, respectively. All Correspondent Banks must be approved by Bangladesh Bank before a bank enters into an agreement with the Correspondent Bank.

Figure1: Participants involved in an EFT transaction

6.18 Authorization:
A written arrangement with the originating company signed by an employee or customer to allow payments processed through the EFT Network to be deposited in or withdrawn from his or her account at a bank. Authorization can also be a written agreement that defines the terms, conditions and legal relationship between Originator and Receiver.

6.19 EFT Transaction Flow:

In EFT terminology, Originator and Receiver refer to the participants that initiate and receive the EFT entries rather than the funds. Unlike a check, which is always a debit instrument, an EFT entry may either be a credit or a debit entry. By examining what happens to the receivers account, one can distinguish between an EFT Credit and EFT Debit transaction. If the receivers account is debited, then the entry is an EFT debit. If the receivers account is credited, then the entry is an EFT credit. Conversely, the offset of an EFT debit is a credit to the originators account and the offset to an EFT credit is a debit to the Originators account. In the later sections the description of the transaction and/or instruments to be used in the BEFTN has been described in logical sequence regardless of their implementation schedule.

EFT Credits: EFT credit entries occur when an Originator initiates a transfer to move funds into a Receivers account. For example, when a corporate uses the payroll service at a bank to pay the salary of its employee each month, the corporate originates the payment through the OB to transfer the money into the account of the employee; the individual is the receiver in this example. EFT credit transactions involve both consumer and corporate payments with separate rules and regulations for each. The most typical consumer EFT application is Direct Deposit of Payroll.

Figure 2: EFT Credit Transactions Flow

In the illustration above an EFT credit transaction flow for payroll payment is shown, where an organization initiates an EFT entry to credit its employees account. Some other common credit applications are:

Inward Foreign remittances Domestic remittances Payroll private and government Dividends/Interest/Refunds of IPO Business to business payments (B2B) Government tax payments Government vendor payments Customerinitiated transactions

EFT Debits:

In an EFT debit transaction, funds flow in the opposite direction to the information. Funds are collected from the Receivers account and transferred to an Originators account, even though the originator initiates the entry. In the illustration below it is shown that a utility company initiates an EFT entry to collect its bill from the consumer.

Some examples of EFT debit application: Utility bill payments Equal Monthly Installments (EMI) Government tax payments Government license fees Insurance premium Mortgage payments Club/Association subscriptions

Figure 3: EFT Debit Transactions Flow

A typical transaction as it flows through the EFT Network might follow the path described below:

The Originator and its bank (OB) determine by agreement that how the information will be delivered from the originator to the OB. Ideally, the originating bank or originator would format the data in accordance with the BEFTN prescribed format and transmit the information to the OB via a communication line. The OB generally removes onus entries (if any) and transmits the remaining entries to the BEFTN within the preset timeline. An onus transaction is one in which the Receiver and the Originator both have accounts at the same bank. Therefore, the transaction needs not to be sent through BEFTN but instead may be simply retained by the bank and posted to the appropriate account. The BEFTN will sort the entries by Receiving Bank (RB) routing number and transmit the payment information to the appropriate RB for posting. On settlement date/time, BEFTN will calculate the net settlement figure for each participating bank and the settlement will take place at the books of accounts of Bangladesh Bank.

6.20 Consumer vs. Corporate Payments:

EFT transactions are typically categorized as either consumer payments, Government payments or commercial payments. These transactions are defined in accordance with the relationship of parties involved in the transaction and the type of receiver account. Consumer payments that could be made via the EFT network include credit applications such as payroll, dividend, interest and annuity payments and so on. Consumer EFT debit applications include the collection of utility bills, insurance premiums, loan installments and other recurring obligations. Corporate EFT applications include cash collection and disbursement, corporate trade payments, government tax payments etc. Cash collection and disbursement allows companies to achieve efficiency in cash management through intracompany transfer of funds. Corporate trade payments enable corporations to exchange both data and funds with trading partners, facilitating an automated process of updating their accounts receivable and accounts payable systems.

6.21 EFT Credits of Shahjalal Islami Bank Limited Sylhet Main Branch:
SJIBL only make the EFT Credit transaction they dont construct EFT Debit Transaction. In the Process of EFT Credit entries occur when an Originator initiates transfer to move funds into a Receivers account through SJIBL. Through the BEFTN Facility SJIBL clients now can easily transfer funds in a short period of time.

300000000 250000000 200000000 150000000 100000000 50000000 0

254980709

EFT Credit Report (in Taka) 18744733 October November 17858639 December

Figure 4: EFT Credits of SJIBL Sylhet Branch The above graph shows that SJIBL Sylhet main branch Credit EFT Report for three months October to December 2012. In October Sylhet Main branch EFT Credit becomes TK.18744733, but in November we can see that in the graph its EFT Credit goes to TK.254980709 & in December its EFT Credit TK. 17858639 which is lower than the previous year.

Chapter Seven:
SWOT Analysis & Observation of SJIBL

7.1 SWOY Analysis of SJIBL

Strength: Good asset quality. Satisfactory business growth. Diversified product lines. Good profitability. Experienced top management. Friendly working environment which motivating for employees. Customer relationship management. Opportunities: Weakness: Negative retained earnings. Dependent of fixed deposits. Moderate risk management system. Limited delegation of power MIS at primary stage. is Weak in Shariah compliance. Limited branch network. Limited ATM booth. Threats: Increased competition in the market. Market Pressure for dollar crisis. Political instability. Government rules and regulation. Economical variation. Policy of competitive banks.

SME based business Real time online banking. Credit card in dual currency. Go beyond the national boundaries. Different consumer service scheme of the SEBL.

7.2 Observations:
The IT infrastructure of SJIBL is not in the satisfactory level thus causing below standard service on online banking. Through my internship program I learn that the using rate of total online banking is still poor in SJIBL Due to day operational activities there is a little scope for proper monitoring. Many customers are reluctant to get online services by paying fees, which create a dilemma for SJIBL. Sometimes it has become burden for the officers to maintain the rules and regulations Imposed by the central bank. The branch has sufficient Computers & Manpower and the place is big enough to deal with the clients. Clients are in favor of introducing system. Through my Internship program I have seen that sometimes the server of the branch go down & the bankers fail to make transaction. So the bank should use update software in the bank which will help them to provide reliable services. Finally some officers would not like to spread out some informations because these were so much confidential for the bank.

Chapter Eight:
Recommendations & Conclusion

8.1 Recommendations:

Actually there are no major Difference between Islamic banking system and Conventional banking system. I have the practical experience in SJIBL for only three months, with my little experience in the bank with vast and complex banking system, it is very difficult for me to recommend. I have observed some shortcomings regarding operational activities of the bank. On the basis of my observation I would like to recommend the following suggestions:

Shahjalal Islamic bank ltd is now an established bank of Bangladesh so Bangladesh Bank should formulate a separate policy for the Bank. The employees are given deposit target, which creates extra pressure to them for that reason they cannot freely provide customer service. If the bank can reduce the pressure then they could be able to provide good service. Customer service in more respects of GB should be more developed. Shahjalal Islamic Bank ltd should be organized a variety of seminars and symposium so that both national and international people can be more familiar. To provide quality service to the customer it is necessary to have a trained team of an organization or an institution. For this reason the bank should recruit fresher, bright energetic persons such as BBA MBA, and MBM etc. Bank should offer more facilities to the customers such as Credit card, Visa card, Master card, ATM machine, etc. As soon as possible the bank should start more branches in Sylhet City as well country. SJIBL should endorse online service as like the foreign countries banks are providing. So that the client can get the facilities of imaginative online banking and get excess to their account and make transaction without going bank. Finally various media mentioning if online banking mechanism so that people can be inspired should advise it.

8.2 Conclusion:
There has been a revolution in the communication media through the introduction of Internet and other forms of secure dial up media. This had a huge impact on all the sectors of the industry specially the banking sector. Traditionally in order to execute banking transaction a customer would require coming at the bank & have to hang around for making transaction. But due to the introduction of electronic banking, customers now can have access to their account 7days a week 24 hours a day and can make transaction easily with a shorter period of time. It has not only benefited the customers but the bank as well. From Banks point of view this has helped prevent customers queuing up at the bank counters thus helping to minimizing the cost as well as the workload for the employees.

In Bangladesh SJIBL can focus on their strengths to materialize the opportunities hidden for them in the banking industry and also they can work on their weaknesses to develop the product effectively and grab more opportunity hidden in the banking industry. With their strengths SJIBL can also reduce the threats existing in the market. They have global strength with their solid brand image and experience and skills as well, with which they are being able to satisfy the customers with their wide range of products and services.

SJIBL can overcome these hurdles and utilize the strengths, as the Bangladeshi banking industry has possessed some positive sides. Bangladesh is growing market where new businesses are coming up and in this emerging market and SJIBL can introduce its products and services effectively to the upcoming corporate. Moreover, it is an emerging market, various multinationals operating in the country will expand and new multinationals will come. These multinationals have huge need of electronic banking products for Payment, Collection and Delivery need to manage their expanding business. They also need liquidity management for proper funding and by focusing on these opportunities; SJIBL can create an effective corporate portfolio in the country.

Chapter Nine:

Bibliography

I studied the documents of SJIBL and visited the following websites for gaining necessary information and data that helped me to prepare the report.

Documents:
1. Booklet of Shahjalal Islami Bank Limited. 2. Documents related to BEFTN.

Websites:
1. www.shahjalalbank.com.bd 2. www.simplyfinance.co.uk/articles/advantage_of_online_banking.html 3. http://worldofthewise.hubpages.com/hub/Online-Banking-10-disadvantages-you-must-know 4. http://www.scribd.com/ 5. www.investopedia.com/ 6. www.shahjalalbank.com.bd/annualreport/AR_SJIBL_2011.pdf 7. http://www.dhakainternet.com/2011/12/13/bb-offers-electronic-fund-transfer-facilities/ 8. orp.aiub.edu/FileZone/OtherFiles/.../AIUB-BUS-ECON-2010-03.pdf 9. http://www.youthinkers.com/2011/06/04/e-payments-in-bangladesh-opportunities-andchallenges/ 10. www.bangladesh-bank.org/aboutus/.../beftn_operatingrules.pdf

Appendix