AN INTERNSHIP REPORT

ON
INTERNET BANKING SERVICES OF JANATA BANK LIMITED

SUPERVISED BY

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

SUBMITTED BY

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

JAGANNATH UNIVERSITY

Date of Submission: 30 April 2017

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

Subject: Submission of Internship Report.

Dear Mam,

You will be pleased to know that I have completed Internship Report on Internet Banking
Services of Janata Bank Limited.

Under the state of the report, I have been given relevant information from the employees of
Janata Bank Ltd for collecting primary data. I also have gone through various publications
relating with Janata Bank Ltd and its operation.

This report provides me an insight on the Internet Banking System of Janata Bank. In this
report I have tried to find out some problem areas related to Internet Banking of Janata Bank
Ltd and tried to find out some possible solutions to those particular problems.

I have enjoyed the preparation of the report because it provides me with the chance to put my
theoretical knowledge in a real life situation. If you need any kind of further information I
will be glad to provide accordingly.

I therefore pray & hope that you would be kind enough to me by providing acceptance of this
report and oblige thereby.

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

i
 Students Declaration

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

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

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

Md. Sulayam

Roll No: M150202006

Section: A, 7th Batch

Department of Management Studies

Jagannath University, Dhaka

ii
 Certificate of Supervisor

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

He is wished all the best in his effort.

Tahmina Rita
Lecturer
Department of Management Studies
Jagannath University.

iii
 Acknowledgement

First of all, I would like to express my gratitude to Omnipotent and Almighty ALLAH,
whose invisible guidance helped me to complete this report. Although time was very limited
for getting the sufficient knowledge about all of banking service, but the short experience that
I gathered will remain as an asset for all the time to come in my life. I take the opportunity to
express my deep sense of gratitude of my reverend supervisor Tahmina Rita for her
invaluable suggestion and guidance during the study period that has greatly inspired me in
preparing this report successfully.
Then I must take this opportunity to thank Mr. Ashish Kumar Sarker, AGM of Janata Bank
Limited of HRD division, for giving me the opportunity to complete my internship
requirement in the organization.

It couldnt be possible to thank all of those marvellous people who have contributed for the
preparation of this report. I am also grateful to the Department of Management Studies,
Jagannath University for proving me such opportunity to come closer to real situation.

I must express my gratitude to all the executives and officers of Janata Bank Limited, REB
Khilkhet branch, Dhaka.

iv
 Executive Summary

Bank is a financial institution that receives, collects, transfers, pays, exchanges lends, invests,
or safeguards money for its customers. Banking is the business of providing financial services
to the private individuals, corporations, government agencies and business and industries.
The main service of a bank is mobilizing deposits and lending these to those people to
finance their consumption or business activities. Banks also render services like issue of letter
of credit and guarantee, remittance or money, collection of utility bills, underwriting of
capital issues, portfolio management as well as lockers services and custodian of valuables.

Internet banking is the practice of making bank transactions or paying bills via the Internet. Thanks
to technology, and the Internet in particular, we no longer have to leave the house. We can shop
online, communicate online, and now, we can even do our banking online. Internet banking allows
us to make deposits, withdrawals and pay bills all with the click of a mouse. It doesn't get much
more convenient than that the benefits are many.

Janata Bank Limited is a state owned commercial bank with numerous branches spreading all
over Bangladesh and is catering the need of the mass business people. It was corporatized on
15th November 2007. Janata Bank was born with a new concept of purposeful banking sub
serving the growing and diversified financial needs of planned economic development of the
country. Janata Bank Limited is playing the most significant role in collecting foreign
remittance from different countries and transfers the currency in BDT to the destined
location.

Janata Bank Limited is one of the largest and leading public commercial bank of Bangladesh.
After completion of core and major courses, at the final semester I have completed my
internship in Janata bank limited. I worked in Janata bank, Khilkhet branch. I worked with
some officers and departments to gather experience and practical knowledge. I also worked
with customers to get the idea about real scenario of banking in practical life. On basis of my
practical experience and theoretical knowledge I prepared the internship report on Internet
Banking Services of Janata Bank Limited. This report has been prepared on basis of both
primary and secondary data. For completing this report I have collected necessary
information to assess the Internet Banking system of JBL. I collected secondary data from
various sources like published materials such as annual reports, web sites, web reports etc.

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

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

vi
 Abbreviation and Elaboration

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

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

viii
 Table of Contents

PRELIMINARY PAGES

Letter of Transmittal I

Students declaration Ii

Certificate of Spervisor Iii

Acknowledgement Iv
Vi
Executive Summary
vii
Abbreviation and Elaboration

Chapter-1 INTRODUCATION 1-13

Serial No. Particulars Page No.

1.1 Introduction of the topic 2
1.2 Background of the Study 4
1.3 Objectives of the Study 4
1.4 Methodology of the Study 5
1.5 Flow Chart of the Study 6
1.6 Scopeofthestudy 7
1.7 Limitations of the study 7
1.8 Literature Review 8

Chapter-2 OVERVIEW OF THE ORGANIZATION 14-30

Serial No. Particulars Page No.

2.1 Historical Background of Janata Bank Limited 15
2.2 Profile of Janata Bank Limited 16
2.3 Mission, Vision and Core Values of JBL 18
2.4 Strategic Objectives of JBL 19

2.5 Ethical Principles ofJanata bank Ltd. 22

2.6 Code of Conduct of JBL 22

2.7 Products and Services of JBL 23

ix
 2.8 Organogram of JBL 25
2.9 SWOT Analysis of JBL 26
2.10 Financial Performance of JBL 28

INTERNET BANKING SYSTEM OF JANATA

Chapter - 3 BANK LIMITED
31 - 44

Serial No. Particulars Page No.

3.1 Janata Bank and Internet Banking 32
3.2 Most Lucrative Services of JBL 35

3.3 Functional Services of JBL 37

3.4 Internet Banking Security of JBL 39
3.5 Risks Associated in Internet Banking 39
3.6 Internet Banking Problem of JBL 43

Chapter - 4 FINDIGNS & ANALYSIS 45 - 48

Serial No. Particulars Page No.

4.1 Empirical Analysis 46
4.2 SWOT Analysis 46
4.3 Cost Volume Profit Analysis 48
4.4 Percentage of most lucrative services of JBL 48
4.5 Findings 49

Chapter - 5 RECOMMENDATIONS AND CONCLUSION 50 - 54

Serial No. Particulars Page No.

5.1 Recommendations 51
5.2 Conclusion 53

END MATTERS

References 55

x
xi
CHAPTER: ONE
INTRODUCTION

1
1.1 Introduction of the Topic

In the present world money is circulated all over the globe. Globalization, technological
advances and other factors money is circulating unimaginably .Financial Institutions mainly
banks play a pivotal role in matching a depositor and lenders and channeling money and
making the economy more efficient. Although the history of Banking goes back to the 14th
century in Europe but Banks are now everywhere. Banks in Bangladesh play a significant
role compared to other financial Institutions.

However the competition in the banking industry has intensified more than ever before.
Global financial crisis, stock market crash, recessions and other factors affected the banking
industry. So banks should position themselves at a unique place in the minds of the customers
by offering attractive offers such as higher interest rates or by offering superior service to the
customers. Services include financial advice, flexible rates or dates of payment, portfolio
management etc.

Internet banking is a service offered to the customers which includes viewing the balances on
accounts, checking the transactions, downloading useful information, transfer of funds,
paying third parties, making loan applications etc. from a secured website of the bank.
Internet banking has opened up a new field of competition for banks. To operate internet an
individual needs the customer number and password. Internet banking has started in the
1980s but it is relatively a new concept in Bangladesh.

Internet banking is the practice of handling all the bank transactions through internet. We are
blessed with such unique technologies where all our works gets completed within seconds.
Internet Banking is one of such technologies. With the help of internet banking, we can
deposit and withdraw amount our self directly to our account, make all kinds of bill
payments, tax payments etc. We can pay our bills like telephone, mobile, credit cards etc.
through internet just by once registering with our bank. After making registration, we can pay
our bills as and when required. Internet banking allow us to access our account, so that we
can know instantly which amount is credited or debited in our bank account which in turn
will help to solve our issues if any. It is an easier way to transfer amount to another account
to which we have to make payment to the party. When we apply for internet banking, bank
provides us with login id and password. The password provided by the bank should be

2
changed immediately and should not be given to anybody else. The password should be
alpha-numeric and should be changed on frequent basis. This information must be kept at
utmost secret, as the password can be hacked by any person.

The Internet has provided a new and inexpensive channel for banks to reach out to their
customers. It allows customers to access banks facilities round the clock and 7 days a week.
It also allows customers to access these facilities from remote sites/home etc. However, all
these capabilities come with a price. The highly unregulated Internet provides a less than
secure environment for the banks to interface. The diversity in computer, communication and
software technologies used by the banks vastly increases the challenges facing the internet
bankers.

Internet banking isn't out to change our money habits. Instead, it uses today's
computer technology to give us the option of bypassing the time-consuming, paper-based
aspects of traditional banking in order to manage our finances more quickly and efficiently.
The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry. For years, financial institutions have
used powerful computer networks to automate millions of daily transactions; today, often the
only paper record is the customer's receipt at the point of sale. Now that its customers are
connected to the Internet via personal computers, banks envision similar economic
advantages by adapting those same internal electronic processes to home use. Banks point of
view internet banking is as a powerful "value added" tool to attract and retain new customers
while helping to eliminate costly paper handling and teller interactions in an increasingly
competitive banking environment. Internet banking or Internet banking allows customers to
conduct financial transactions on a secure website operated by their retail or virtual bank,
credit union or building society.

3
1.2 Background of the study

The MBA program is designed to focus on practical and professional development of people
open to take up business as a profession as well as service as a career. Internship program is
made essential to this MBA program with the aim of developing the real life sense. Before
starting exploration to the real occupational field, students get some professional and
practical knowledge on their interested fields.

As per the requirement of MBA program I applied and get appointed to Janata Bank,
Farashgonj branch from to. A topic has been selected Internet Banking Services of Janata
Bank Ltd. to conduct study and prepare an internship report which is mandatory to the
internship program.

I have prepared this report on basis of Internet Banking Services of Janata Bank Ltd. I
have done this report as the requirement MBA program. My instructor Tahmina Rita has
assigned this topic. I choose Janata Bank Limited for my study. I collected information
about Internet Banking Services of JBL and prepared this report.

I have tried my level best to present my experience of the organization and in this report.

1.3 Objective of the Study

Broad Objective:

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

Administration program that helps a lot to learn about the practical situation of a
financial institution and implement theoretical knowledge into practical and
realistic work environment.

Specific objectives: To obtain main objective, the other supportive objective need to be
attempted, which are .

To point out different aspects of Internet Banking system of JBL.

To identify the risk related to internet banking of JBL.
To analysis the status of Internet Banking of JBL.

4
 To identify the massive problem of internet banking and the problem of JBL
related to Internet Banking.
To recommend some ways to improve the system.

1.4 Methodology

This study is mainly based on secondary data collected from several reliable sources besides
these some primary data was also collected from the branch I was appointed.

Sources of primary data

Face to face conversation

Relevant file and records provided by the officers concerned

Sources of secondary data

Annual reports Janata Bank

Related articles
Books
Other researches
Bank website
Publications etc.

A thorough research was carried out for a period of three months when we talked with
several bank bodies and finally this article is chalked. The investigation will be helpful
for the readers and researchers.

5
1.5 Flow Chart of the Study

Planning

THE APPROACH

-THE LITERATURE REVIEW

-THEORIETICAL CONSIDERATION

COMMUNICATING

Methodology

Primary Resources Secondary Resources

a) Official records of a) Annual report
Janata Bank b) Working papers
b) Face to face c) Office files
conversation d) Bank website

Collecting Information

Analyzing

Preparing the Report

Submission
Of the Report

6
1.6 Scope of the Study
The report gives the readers an idea of the financial condition of Janata Bank Ltd. It also
makes the reader aware of the operations of JBL and the internet banking service of the bank.
However JBL provides very few internet banking services which is available on their web
site.

1.7 Limitations of the Study

I have faced some limitations, when I was preparing this report which is mentioned below.

Insufficiency of information;
Lack of necessary co-operation of the officials due to maintain secrecy;
Relatively new practice in Bangladesh;
Lack of experience;

7
1.8 Literature Review

1.8.1 Internet Banking

A system allowing individuals to perform banking activities at home via the internet is
internet banking. Some internet banks are traditional banks which also offer internet banking,
while others are internet only and have no physical presence. Internet banking through
traditional banks enables customers to perform all routine transactions, such as account
transfers, balance inquiries, bill payments, and stop-payment requests, and some even offer
internet loan and credit card applications. Account information can be accessed anytime, day
or night, and can be done from anywhere. A few internet banks update information in real-
time, while others do it daily. Once information has been entered, it doesn't need to be re-
entered for similar subsequent checks, and future payments can be scheduled to occur
automatically. Many banks allow for file transfer between their program and popular
accounting software packages, to simplify record keeping. Despite the advantages, there are a
few drawbacks. It does take some time to set up and get used to an internet account. Also,
some banks only offer internet banking in a limited area. In addition, when an account holder
pays internet, he/she may have to put in a check request as much as two weeks before the
payment is due, but the bank may withdraw the money from the account the day that request
is received, meaning the person has lost up to two weeks of interest on that payment. Internet-
only banks have a few additional drawbacks: an account holder has to mail in deposits (other
than direct deposits), and some services that traditional banks offer are difficult or impossible
for internet-only banks to offer, such as traveler's checks and cashier's checks.

1.8.2 Benefits of internet banking

Lets start off with the advantages of internet banking. First and foremost, internet banking is
very convenient. It will allow you to pay your bills and make transactions anytime during the
day and the week. The bank will never close because you can access it through your laptop or
computer. So, no matter in which country you are anywhere in the world, you can go internet
and handle your finances.

8
Secondly, internet banking is very fast, effective and efficient. Over the Internet, you can
make transactions that are typically executed and performed at a much faster pace than at
ATMs. Internet banking services also give you the option of handling several different bank
accounts from one site itself.

- Pay bills
- Switch money from one account to the other

- Keeping up to date with all of your latest cheque payments etc.

And doing all of the other things people does at banks in the comfort of their own home

Most internet banking sites are compatible with programs like Microsoft Money and
Quicken, which makes management of assets more effective

1.8.3 Common Internet Banking Services:

Banking transactions can range from something as basic as a retail account balance inquiry to
a large business-to-business funds transfer. On line banking services, like those delivered
through other delivery channels, are typically classified based on the type of customer they
support. The following table lists some of the common retail on line banking services offered
by banks are as follows:

Account management
Bill payment and presentment
New account opening
Investment/Brokerage services
Loan application and approval
Business-to-business payments

1.8.4 Internet Banking Components

On line banking systems can vary significantly in their configuration depending on a number
of factors. Banks should choose their internet banking system configuration, including
outsourcing relationships, based on four factors:

9
 Strategic objectives for on line banking;
Scope, scale, and complexity of equipment, systems, and activities;
Technology expertise; and
Security and internal control requirements.

Banks may choose to support their on line banking services internally. Alternatively, Banks
can outsource any aspect of their on line banking systems to third parties. The following
entities could provide or host (i.e., allow applications to reside on their servers) on line
banking-related services for banks:

Another financial institution,

Internet service provider,
Internet banking software vendor or processor,
Core banking vendor or processor,
Managed security service provider,
Bill payment provider,
Credit bureau, and
Credit scoring company.

1.8.5 Required Physical Infrastructure for Internet Banking

Internet: The Internet is a global system of interconnected computer networks that use the
standard Internet Protocol Suite (TCP/IP) to serve billions of users worldwide. It is a network
of networks that consists of millions of private, public, academic, business, and government
networks of local to global scope that are linked by a broad array of electronic and optical
networking technologies. The Internet carries a vast array of information resources and
services, most notably the inter-linked hypertext documents of the World Wide Web (WWW)
and the infrastructure to support electronic mail.
Intranet: An intranet is a private computer network that uses Internet Protocol technologies
to securely share any part of an organization's information or network operating system
within that organization. The term is used in contrast to internet, a network between
organizations, and instead refers to a network within an organization. Sometimes the term

10
refers only to the organization's internal website, but may be a more extensive part of the
organization's information technology infrastructure. It may host multiple private websites
and constitute an important component and focal point of internal communication and
collaboration.

Hardware: The essential hardware required to build a complete internet banking system
includes:

Personal Computers
Servers
Routers
Firewalls
Modems
Switches
POS (Point of Sale) Terminals
ATM (Automated Teller Machines) booths

Software: For conducting internet banking operations several software are now available
such as FLEXCUBE, a banking software which enables banks to process and store banking
transaction data and making payments through a dedicated client-server network. Different
banks use different types of software depending on the cost and other factors.

1.8.6 Present Scenario of Internet Banking in Bangladesh

The commercial banking system dominates Bangladesh's financial sector. Bangladesh Bank
is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The
banking sector of Bangladesh comprises four categories of scheduled banks. These are state-
owned commercial banks (SCBs), state-owned development finance institutions (DFIs),
private commercial banks (PCBs) and foreign commercial banks (FCBs). Internet Banking in
Bangladesh is yet to develop according to international standard. At present, several private
commercial banks (PCBs) and foreign commercial banks (FCBs) offer limited services of

11
telephone banking, internet banking facilities working within the branches of individual bank
in a closed network environment. As a part of stepping towards internet-banking, the FCBs
have played the pioneering role with adoption of modern technology in retail banking during
the early 1990s whereas the state-owned commercial banks (SCBs) and PCBs came forward
with such services in a limited scale during the late 1990s. Moreover, the banking industry as
a whole, except for the four specialized banks (SBs), rushed to offer technology based
banking services during the middle of the current decade. The existing form of e-banking that
satisfies customer demand in banking activities electronically throughout the world are PC
banking or PC home banking that include internet banking, internet banking, mobile banking,
and telephone banking.

1.8.7 Users of Internet Banking over seven years in Bangladesh

Internet user
40,00%

35,00%

30,00%

25,00%

20,00%
Internet user
15,00%

10,00%

5,00%

0,00%
2011 2012 2013 2014 2015

Figure: Internet user percentage of total population

From the figure we see that the Internet users of our country are increasing every year. After
connecting with the information superhighway, the total country is connected by fiber optic
backbone; certainly it is a milestone for infrastructure of implementing internet banking in
Bangladesh. In Bangladesh most of the banking hardware is available for internet banking is

12
entirely procured from foreign origins with a local distributor. Internet banking operation
hardware includes; servers, workstation, printers, scanner ATM, POS terminals, etc. and
networking hardware includes switch, Router, V-SAT connectivity etc. The software support
for internet banking, i.e. FLEXCUBE is available in Bangladesh. Again Bangladesh
Government is working on the copyright law and the preservation of intellectual property act.
After the successful implementation of all these policies and strategies we are expecting that
more than 50% of the banks will be offering internet banking facilities which is now 12%
only.

13
 CHAPTER: TWO

ORGANIZATIONAL
OVERVIEW

14
2.1 Historical Background

With the emergence of Bangladesh as an independent, sovereign state in 1971 after a

devastating nine month war against the West Pakistani occupation army, a war, full of blood
and tears, trauma and pain of millions of our beloved ones, the legacy of rebuilding the
already broken financial base of the country was felt as an urgent call of the day against a
collapsed economic reality of a newly born state.

In this backdrop, in order to rebuild the countrys economy, measures had been taken to
merge a number of banks previously operated in this region and make new banks and this
initiatives led to formation of Janata Bank in 1972 by combining the erstwhile United Bank
Limited and Union Bank Limited under the Banks Nationalization Order (Presidents Order
No. 26) of 1972.In 15 November, 2007 Janata Bank got registered with the Joint Stock of
Registrars and restructured it as a public limited company with the name Janata Bank
Limited.

Including 4 overseas branches in United Arab Emirates Janata Bank runs its business with
906 branches across the country having a big family of around 14,244 (As on 01.05.2015)
employees with its head office located at JanataBhaban at Motijheel C/A, the heart of the
capital city, Dhaka.At the end of 2014 the Bank held Deposit BDT 5,16,010 million,
Advance BDT 3,19,773 million with Authorized capital BDT 30,000 million and Paid-up
Capital BDT 19,140 million.

Janata Bank Limited, a corporate body trusted over the years, the 2nd largest (in respect of
Deposits/Assets) commercial bank in Bangladesh, has been playing pivotal role in overall
financial activities of the country and is possessing a long heritage of discharging laudable
services to the society since her embankment immediately after the emergence of this verdant
rich alluvial soil as a sovereign, independent state.

The contribution of the Bank to the national economy and social reform has set standard bar
so high that others in this business cant help aspire touching the benchmark of success
earned by JBL. More so a matter of great honor is that the contribution, commitment and
success of the Bank have been recognized with a number of prestigious awards by national
and international organizations of repute.

15
2.2 Profile of JBL

Name of Company Janata Bank Limited

Registered Office Janata Bhaban,110, Motijheel C/A, Dhaka-
1000, Bangladesh.
Legal Status Public Limited Company
Date of Incorporation 21 May 2007
Date of Commencement of Business 31 May 2007
Authorized Capital Tk. 30,000 Million
Paid up Capital Tk. 19,140 Million
Face value per share Tk. 100 per share
Shareholding Pattern 100% Share owned by the Government of the
Peoples Republic of Bangladesh
Tax Identification No 001-200-2732
Vat Registration No 9011050160
Chairman Shaikh Md. Wahid-uz-Zaman
CEO & Managing Director Mr. Md. Abdus Salam
Chief Risk Officer Mr. Omar Farooque (DMD)
Head of Internal Control and Compliance Mrs. MahtabZabin (GM)
Chief Financial Officer (CFO) Mr. Md. NurulAlam FCA, FCMA (GM)
Company Secretary Mr. Md. Mosaddake-Ul-Alam (GM)
Domestic Network
Number of Branch 900
Number of Divisional Office 11
Number of Area Office 47
Number of AD Branch 56
Overseas Network
Number of Branch 04
Location of Branches Abudhabi, Dubai, Al-Ain and Sarjah. UAE
Chief Executive Office Obeid Sayah Al Mansuri Building Zayed,1st
Street (Electra Road), Post Box No 2630 Abu
Dhabi, United Arab Emirates

16
Subsidiaries
Dhaka Janata Capital and Investment Ltd.
Italy Janata Exchange Company srl
USA : Not yet started its operations Janata Exchange Company,
Number of Correspondence 1242
Number of Employees 14413
Number of Exchange House 72
Corporate Rating Status
Entity Rating A + in the long term As Govt. owned
AR-2 in the short term As Govt. owned AAA
in the long term
AR-1 in the short term
Telex 675840JBDBJ, 671288 JBHOBJ
Phone PABX 9560000, 9566020, 9556245-49, 9565041-45,
9560027-30
Fax 88-02-9564644, 9560869
E-mail md@janatabank-bd.com
Website www. janatabank-bd.com
Swift Code JANBBDDH

Figure: Profile of Janata Bank Limited.

17
2.3 Mission, Vision and Core Values of JBL

Mission
Janata Bank Limited will be an effective commercial bank by maintaining a stable growth
strategy, delivering high quality financial products, providing excellent customer service
through an experienced management team and ensuring good corporate governance in every
step of banking network.

Vision
To become the effective largest commercial bank in Bangladesh to support socio-economic
development of the country and to be a leading bank in south Asia.

Values

Janata Bank Ltd follows eight basic core values. These core values work as basic principles
of JBL. The core values of JBL are-

Commitment
Quality
Diversity
Sustainability
Professionalism
Transparency
Responsibility
Accountability

18
 Commitment

Accountability Quality

Responsibility Values Diversity

Transparency Sustainability

Professionalism

Figure: Core competences of Janata Bank Limited

2.4 Strategic Objective of JBL

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

JBL have
Concern
Commitment
Competence

19
JBL strengths
Nationwide networks, 900 branches
Foreign Network 4 branches
Foreign Correspondence 1242
State owned image
Market reputation
Global recognition
Strong deposit base
Strong capital base
No provision shortfall
Skill manpower
Experienced management
Newly recruited talents

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

JBL need
Sense of belonging (ownership)
Team spirit
Human touch with clients
Managerial efficiency

20
 Innovative thinking
Free from corruption
Improve on-line banking
Introduction of mobile banking
Broadening of deposit base
Expedite cash recovery
Making all branch profitable
Improved training program
Boost up foreign remittance
Ensure chain of command
Correct estimation of borrowers demand
Proper valuation of security
Customer preference
Synthesis of mass banking and elite banking
Avoid loan sanctioning bureaucracy
Aware gender sensitivity
Aesthetic infrastructure

Concerning the factors above JBL have the following objectives

1) To ensure inflow of funds at combinations of least possible cost.

2) To maintain a discreet credit policy.
3) To extend financial assistance to the citizenry, living at dispersed locations by
expanding the network of branches.
4) To practice stronger IT-driven initiatives that will meet the challenges and
requirements of the bank and its clientele.
5) To improve administrative and organizational structures in order to prepare the
platform for best practices of corporate governance.

21
2.5 Ethical Principles
Bank deals with public money where ethical compliance is very important. JBL follows and
maintain ethical values in every sphere of its banking operation and customer services. The
core ethics of JBL business are as follows:

Implement justice and fairness;

Ensure optimal customer services;
Maintain privacy and secrecy of customers information;
Prevent money laundering and corruption;
Protects and upholds corporate values;
Maintain accuracy and transparency in financial reporting;
Protect natural environment.

2.6 Code of Conduct

In accordance with the ethical principles the code of conduct of JBL employees shall:

Act with integrity, competence and dignity;

Loyal to the bank and banks interest;
Maintain professionalism and ethical standards;
Deliver professional service in accordance with JBL policies and relevant standards;
Try to fulfill the customer needs in the best possible manner within the guideline of
corporate ethics;
Keep all matters confidentially;
Maintain knowledge of and comply with all applicable laws, rules and regulations;
Never offered or accept illegal gifts or other facilities in order to achieve personal
advantage;
Not engaged in any unprofessional conduct involving dishonesty, fraud,
misrepresentation or commit
Any act that reflects adversely on honesty, trustworthiness and professional
competence.

22
2.7 Products and Services of JBL
JBL render both corporate and retail banking services with a strong focus on socio-economic
development of the country. The bank typically provides short term working capital loan and
limited long term credit exposure. Moreover, JBL offers micro enterprise and special credit
as well as rural banking. Under corporate banking services JBL provides trade finance,
project finance, syndicate finance. On the other hand, consumer loan, deposit scheme,
remittance facilities are provided through retail banking. In 2013, JBL launched its own
innovation to remittance payment system at all branches which facilitate Deposit/withdrawal
from any branch in this system.

Deposits
Current & Call Deposits
Savings Bank Deposits
Monthly Scheme Deposits
Term Deposits
Special Notice Deposit

Loans & Advances

Agriculture Loan Programs
Poverty Alleviation Program
Specialized Loan Program
Rural Credit
Term Loan for Large and Medium Credit Programs
Other Loans & Advances
Loans for Thrust Sectors
Export Oriented Industry Term/Project Financing
Micro & Cottage industries loan
Working Capital
Export Financing
Import Financing
Trade Financing

23
Financial Services
Inland Remittance
Foreign Remittance
Other Financial Services

Other Services
Utility Services
Welfare Services
Q-Cash (ATM) Services
Others

Customer Care

Web based Spot cash

Internet Banking

24
2.8 Organogram of JBL

Janata Bank Ltd have the following organogram in the main structure of banking

Board of Directors

Managing Directors (MD)

Deputy Managing Directors (DMD)

General Manager (GM)

Deputy General Manager (DGM)

Assistant General Manager (AGM)

First Assistant General Manager (FAGM)

Senior Executive Officer (SEO)

Executive Officer (EO)

Assistant Executive Officer (AEO)

Figure: Organogram of Janata Bank

25
2.9 SWOT Analysis of JBL

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

SWOT analysis explains environment of an organization in two broad ways. They are:
a) Internal Environment Analysis: It includes strengths and weaknesses.
b) External Environment Analysis: It includes opportunities and threats.

During my internship period in Janata Bank I have found some aspects relating to the Banks
strengths, opportunities, weaknesses and threats, which I think, affect the banks
performance. These are given below:

Strengths
As a large bank, it has qualified and experienced manpower.
Branch location is suitable for business.
Banks assets position is quite satisfactory and now there is no fund crisis.
Bank has requisite wealth to sustain in the various challenges of market economy
Being a nationalized banking organization, it always gets government support in all
of its operations.

Weakness
As many employers retired from the bank, there is a crisis for manpower in the bank.
Bureaucrat official process hampered the daily internal workflow.
Lack of motivation for the workers.
Low salary structure for the employees.
In some cases management-employee relation is not good.

26
Opportunities
Expansion of new investment areas.
Scope for automation will open a big door of opportunity.
In case of fund crisis Janata Bank gets government support.
The bank undertakes need-based training program.
Threats
Newly developed privatized and foreign banks.
Facing a great competition with other commercial banks and financial institutions.
Loan recovery systems are very weak.
Policies are not practiced properly.

27
2.10 Financial Performance

Sl Particulars 2015 2014 2013 2012 2011

A. Operational Information's & Indicators
1 Total Deposits 516010 478535 409767 361677 286566.84
2 Total Loans & Advances 319773 285747 305339 257801 225732
3 Import 144556 176671 188284 197285 183744
4 Export 154079 153252 156525 153758 118515
5 Foreign Remittance 106677 103982 100089 72285 52640
6 Non Interest Income ----- 5145 8134 9357 7283
7 Total Classified Loans & 37375 31766 53202 15040 11827
Advances(Including
Overseas)
8 Operating Profit 10683 1212 14534 15722 12036
9 Reduction of Classified ----- 3532 4357 3645 5561
Advance
10 Rate of Classified Loans & 11.69% 11.12% 17.16% 5.60% 5.30%
Advances
11 Deposits Advances Ratio 61.97% 59.71% 74.52% 71.28% 78.77%
B. Financial Indicators & Information
12 Authorized Capital 30000 20000 20000 20000 20000
13 Paid up Capital 19140 19140 11000 8125 5000
14 Required Capital 35420 33392 31898 30643 22973
15 Capital Kept ----- 34301 11780 31242 23454
16 Capital (Shortfall)/Surplus 1048 908 (20118) 599 481
17 Loan loss provision required
a) For classified loans and 21684 19345 31772 8175 6823
advances
b) For unclassified loans ------ 2946 2240 2998 2152
and advances
18 Provision Kept ----- 22291 34012 11173 8975
19 Total Assets 629454 586082 511129 440389 345234
20 Earning Assets 496785 461290 434578 376071 293020

28
21 Total Contingent 72495 99726 112559 151207 106228
Assets/Liability (Off
Balance Sheet Items)
22 Profit after tax & Provision 3813 9551 (16280) 4445 4908
23 Rate of Return on profit ---- ---- (3.19%) 1.01% 1.42%
after tax
24 Return on Investment 8.47% 9.39% 8.04% 7.72% 4.89%
(ROI)
25 Cost of Deposit 7.34% 7.75% 7.24% 5.57% 4.17 %
26 Operating Cost ----- 8731 1.97% 2.23% 2.31%
27 Cost of Fund 8.82% 9.23% 9.21% 7.80% 6.48%
28 Average Return on Loan & 11.44% 12.39% 12.12% 9.84% 8.97 %
Advances
29 Interest Spread 4.10% 4.64% 4.88% 4.27% 4.80%
30 Net spread 2.06% 3.16% 2.40% 2.13% 2.50%
31 Earning per share 19.92 86.31 (148.0) 60.45 98.16
32 Current Ratio ----- 1.04 1.03 1.06 1.10
33 Efficiency Ratio ----- 15.86% 15.11% 17.54% 21.61%%

29
30
 CHAPTER: THREE
INTERNET BANKING SERVICES
OF JANATA BANK LTD

31
3.1 Internet Banking and JBL
As a partner of the Governments Digital Bangladesh strategy, the bank has focused on
automation and internet banking activities. The following table projects the growth of
launching internet banking according to administrative divisions.

For performing internet banking, the bank has launched Real time Internet Banking activities
by the real time centralized internet Core Banking System (CBS) software TEMENOS
-24 (T24) in 132 branches in 2014. This facility was available in 17 branches only in 2013.
Live operations in all native branches of the bank are conducted using off-line systems. JB
cheque payment and JB cash deposit system through cheque have been developed in all
inland branches by its own software.

Speedy foreign remittance system has been implemented in the national branch network. In
all 93 branches (each administrative district being equiped with at least one such branch) are
operating the payment system of electronic Government procurement by which all types of
tender fees are collected. Central Data Centre (CDC) & Disaster Recovery Site (DRS) is
going to be modernized and made more powerful progressively. Apart from inland branches,
four foreign branches are conducting internet core banking activities. By using its own
Banking Application Software JBSoft Banking, the bank has saved BDT 33.20 million
(approx.) on procurement and BDT 1.30 million (approx.) per month on maintenance of the
software.

Internet banking services of JBL

Janata Bank has introduced new services for those people who are not covered by traditional
banking services. Among these, there are services/products like internet banking (JB
Remittance Payment System) and real time internet core banking system. Bangladesh
Automated Clearing House (BACH), the first ever electronic clearing house, with its
components- Bangladesh Automated Cheque Processing System (BACPS) and Bangladesh
Electronic Fund Transfer
Network (BEFTN); Society for Worldwide Interbank Financial Telecommunication (SWIFT)
etc.

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JBL remittance payment system
Ensuring a modern deposit/payment service through all branches in the country, JBL has
successfully launched an internet service named On-line JB Remittance Payment System
which is developed by the banks own IT specialists. This service has been categorized under
the following three modules:
1. JB Cheque Payment System
2. JB Cash Deposit System
3. JB Remittance Payment System
Besides, Internet banking (Real time) system has already been implemented in 174 branches
by 2015.

BACH
With an aim to make clearing activities automatic under Bangladesh Automated Clearing
House (BACH) automated clearing center has been setup at Local office of the bank.
Clearing activities in automated system are being executed through Bangladesh Automated
Cheque Processing System (BACPS) from this center.

BEFTN
Fund transfer activities from all branches of the bank with all other banks are being operated
through Bangladesh Electronic Fund Transfer Network (BEFTN).

ATM Service
By adopting the latest technology and under the largest network comprised of 34 banks, of
which 32 banks (including Janata Bank Limited) as members and 2 other banks as network-
sharing members, JBL is providing ATM facilities with debit and credit card to the
customers. Cardholders of the bank have access to more than 4100 ATMs, including 15 of its
own and have the privilege to use more than 5,000 point of sales (POS). Considering
customer service expansion along with promoting goodwill of the bank, projects have been
undertaken to increase the number of ATMs. In 2014, the number of debit and credit
cardholders was 1761 and 632 respectively. The table below shows the increase of number of
both debit and credit card holders.

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CDMS
As core deposit is the low cost deposit and nucleus of the financial base of any bank, JBL
aims to strengthen core deposit procurement activities for which a web based software Core
Deposit Monitoring System (CDMS) has been crafted. Through this system, branches are
being made to input their data on core deposit on the month ending working day. This system
has enabled instant monitoring of core deposit collection of all branches, area and divisional
offices and all departments of head office as well.

Personnel Management Information System (PMIS)

Janata bank Limited has introduced a Web-based and Real Time Personnel Management
Information System (PMIS) which contains all the basic and necessary information of
employees. All HR related functions are executed through some specific built-in modules
using the database of PMIS. All the dignitaries and employees of JBL are able to view over
fifty Real Time reports about the employees and organizational structure of the bank by
registering with General Module of the PMIS system.

Management Information System (MIS)

For the purpose of automation and removal of the shortcomings of manual generation of
reports and regular monitoring of the business activities, a web based application software
programme termed as OMIS, has been crafted. OMIS does the following:

1. Reports both in detail and summary, missing and completed list, comparison and graph as
well as different monitoring reports of any branch/area office/divisional office as well as of
whole bank are prepared;

2. Helps decision taking through generating transparency and accountability of information;

3. Repetition of reporting is reduced thus saving working hours;

4. All necessary statements are produced through open query system.

34
Website
As a state owned bank, JBL is the first to introduce website with domain named
www.janatabank-bd.com at the end of the year 2000. The website is always kept updated
with
important information/circulars, tender, auction and employment related information. The
bank has introduced a web based mailing system by which all departments of the head office,
divisional, area offices and branches are enjoying e-mail facilities. Recruitment procedure of
the
bank and activities related to collection of university admission fees are executed through this
website. For performing internet banking, the bank has launched Real

3.2 Most Lucrative Services of JBL

Electronic Money (E-Money): Electronic money (also known as e-currency, e-money,

electronic cash, electronic currency, digital money, digital cash or digital currency) refers to
money or scrip which is only exchanged electronically. Typically, this involves the use of
computer networks, the internet and digital stored value systems. Electronic Funds Transfer
(EFT) and direct deposit are all examples of electronic money. Also, it is a collective term for
financial cryptography and technologies enabling it.

Credit Cards: Credit Card can be called as an equivalent of a loan sanctioned by the bank to
its customers. Credit card facilitates and makes it possible to Use First and Pay Later the
specified amount of credit as per the agreed terms of sanction. This card facilitates the
cardholder to purchase goods and services from the merchant establishments and shops
through the collaborating credit card companies like VISA, MasterCard, Maestro, and Cirrus.

35
Debit Cards: A Debit Card provides for internet electronic payment like Credit Card but from
savings or current accounts of the cardholder for purchases. This card is a deposit access
product where cardholder uses his own money in his bank account through the debit card on
the principle of Pay First and Use Later. Debit card contains the symbol or hologram of
collaborating company such as VISA, MasterCard, Maestro and Cirrus etc.

ATM Cards: ATM Card can be used to withdraw money, deposit money, balance enquires,
deposit bills in the account. The cardholder must maintain a savings bank account or current
account with the bank. On issuance of card, the cardholder is intimated a four digit secret
Personal Identification Number (PIN). The cardholder is always required to maintain safely
the PIN to prevent fraudulent activity.

Automated Teller Machines (ATM): Full elaboration of ATM is Automated Teller

Machine which acts like a teller point in bank who takes and gives money over the counter.
ATM is same as teller point but it run automatically through identity like card and password.
It does not need any slip or Cheque but it is very much based on A/C holders ATM card and
its Password. Those who are entitled for ATM card, bank has provided them a password
against every single card. This is like a debit card. People can deposit their money in a bank
account and they have entitled withdraw their money through ATM card, which is applicable
for 24 hours a day and 365 days in a year

Point of Sales: Point of sale (POS) or checkout is the location where a transaction occurs. A
"checkout" refers to a POS terminal or more generally to the hardware and software used for
checkouts, the equivalent of an electronic cash register. A POS terminal manages the selling
process by a salesperson accessible interface. The same system allows the creation and
printing of the voucher.

36
3.3 Functional services of JBL

In true sense internet banking is still absent in Bangladesh. Banks are providing banking
services via internet that includes-

3.3(1) Account Summary

The Customer will be able to view the list of Current, Saving, Term Deposit and Loan
accounts with the current balance.

3.3(2) Account Details

The Customer can choose a particular account and see the account details including unclear
fund, limit, interest accrued etc.

3.3(3) Account Activities

The customer can see or print his transaction activity in a given account for a particular
period.

3.3(4) Electronic Fund Transfer

The customer can transfer funds from one of his accounts to another of his accounts within
the bank.

3.3(5) Standing Instructions

The customer can setup, modify or delete standing instructions for transferring fund from one
of his account to another account (his account or 3rd party).

3.3(6) Open/Modify Term Deposit

The customer can open a term deposit by transferring funds from one of his current or
savings accounts with the bank. He can also modify the TD and redeem / part-redeem it.

3.3(7) Loan Repayments

The customer can make payment of the loan installment from his CASA account.

37
3.3(8) Statement Request

The customer can make a request for account statement for a required period. The bank will
manually service this request.

3.3(9) Cheque Book Request

The customer can make a request for a Cheque book.

3.3(10) Cheque Status Inquiry

The customer can choose an account and enter the Cheque no for which the status should be
viewed.

3.3(11) Stop Payment Cheque

The customer can mark his Cheque leaf as stop payment.

3.3(12) Interest Rate Inquiry

The customer can query on the interest rates on CASA & Term Deposit Products.

3.3(13) Foreign Exchange Rate Inquiry

The customer can query on the Foreign Exchange (FX) Rates using this function.

3.3(14) Refill Pre-Paid Card

The customer can buy a refill number for his pre-paid mobile phone or ISP link.

3.3(15) Change Password

The customer can change his Internet Banking Password using this function.

3.3(16) Letter of Credit

The customer can initiate the LC application through Internet Banking.

3.3(17) Bank Guarantee

The customer can initiate the Bank Guarantee through Internet Banking.

38
3.3(18) Limits Query

The customer can view his Loan Limits and Limits Utilization through Internet Banking.

3.4 Internet Banking Security of JBL

To keep security of customer JBL and all banks follow the curricular, as like its one of the
biggest attractions of Internet as an electronic medium is its openness and Freedom. It is a
public domain and there is no restriction on who can use it as long as one adheres to its
technical parameters. This has also given rise to concerns over the Security of data and
information transfer and privacy. These concerns are common to any network including
closed user group networks. . It will be sufficient to say here that the key components of such
concern are,

(I) Authentication, viz., assurance of identity of the person in deal,

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

3.5 Types of risks associated in Internet banking of JBL.

A major driving force behind the rapid spread of internet banking all over the world is its
acceptance as an extremely cost effective delivery channel of banking services as compared
to other existing channels and its applying same condition in Bangladesh. However, Internet
is not an unmixed blessing to the banking sector. Along with reduction in cost of transactions,
it has also brought about a new orientation to risks and even new forms of risks to which
banks conducting o-banking expose themselves. Regulators and supervisors all over the
world are concerned that while banks should remain efficient and cost effective, they must be
conscious of different types of risks this form of banking entails and have systems in place to
manage the same. An important and distinctive feature is that technology plays a significant
part both as source and tool for control of risks. Because of rapid changes in information

39
technology, there is no finality either in the types of risks or their control measures. Both
evolve continuously. The thrust of regulatory action in risk control has been to identify risks
in broad terms and to ensure that banks have minimum systems in place to address the same
and that such systems are reviewed on a continuous basis in keeping with changes in
technology. In the following paragraphs a generic set of risks are discussed as the basis for
formulating general risk control guidelines, which this Group will address.

3.5(1) Operational risk:

Operational risk, also referred to as transactional risk is the most common form of risk
associated with I-banking. It takes the form of inaccurate processing of transactions, non-
enforceability of contracts, compromises in data integrity, data privacy and confidentiality,
unauthorized access / intrusion to banks systems and transactions etc. Such risks can arise
out of weaknesses in design, implementation and monitoring of banks information system.
Besides inadequacies in technology, human factors like negligence by customers and
employees, fraudulent activity of employees and crackers / hackers etc. can become potential
source of operational risk. Often there is thin line of difference between operational risk and
security risk and both terminologies are used interchangeably.

3.5(2) Security risk:

Internet is a public network of computers which facilitates flow of data / information and to
which there is unrestricted access. Banks using this medium for financial transactions must,
therefore, have proper technology and systems in place to build a secured environment for
such transactions.Security risk arises on account of unauthorized access to a banks critical
information stores like accounting system, risk management system, portfolio management
system, etc. A breach of security could result in direct financial loss to the bank. For example,
hackers operating via the Internet could access, retrieve and use confidential customer
information and also can implant virus. This may result in loss of data, theft of or tampering
with customer information, disabling of a significant portion of banks internal computer
system thus denying service, cost of repairing these etc. Other related risks are loss of
reputation, infringing customers privacy and its legal implications etc. Thus, access control
is of paramount importance. Controlling access to banks system has become more complex
in the Internet environment which is a public domain and attempts at unauthorized access

40
could emanate from any source and from anywhere in the world with or without criminal
intent. Attackers could be hackers, unscrupulous vendors, disgruntled employees or even pure
thrill seekers. Also, in a networked environment the security is limited to its weakest link. It
is therefore, necessary that banks critically assess all interrelated systems and have access
control measures in place in each of them.

In addition to external attacks banks are exposed to security risk from internal sources e.g.
employee fraud. Employees being familiar with different systems and their weaknesses
become potential security threats in a loosely controlled environment. They can manage to
acquire the authentication data in order to access the customer accounts causing losses to the
bank.

Unless specifically protected, all data / information transfer over the Internet can be
monitored or read by unauthorized persons. There are programs such as sniffers which can
be set up at web servers or other critical locations to collect data like account numbers,
passwords, account and credit card numbers. Data privacy and confidentiality issues are
relevant even when data is not being transferred over the net.

Data residing in web servers or even banks internal systems are susceptible to Corruption if
not properly isolated through firewalls from Internet.

The risk of data alteration, intentionally or unintentionally, but unauthorized is real in a

networked environment, both when data is being transmitted or stored. Proper access control
and technological tools to ensure data integrity is of utmost importance to banks. Another
important aspect is whether the systems are in place to quickly detect any such alteration and
set the alert.

Identity of the person making a request for a service or a transaction as a customer is crucial
to legal validity of a transaction and is a source of risk to a bank. A computer connected to
Internet is identified by its IP (Internet Protocol) address. There are methods available to
masquerade one computer as another, commonly known as IP Spoofing. Likewise user
identity can be misrepresented. Hence, authentication control is an essential security step in
any e-banking system

41
3.5(3) Money laundering risk

As Internet banking transactions are conducted remotely banks may find it difficult to apply
traditional method for detecting and preventing undesirable criminal activities. Application of
money laundering rules may also be inappropriate for some forms of electronic payments.
Thus banks expose themselves to the money laundering risk. This may result in legal
sanctions for non-compliance with know your customer laws.To avoid this, banks need to
design proper customer identification and screening techniques, develop audit trails, and
conduct periodic compliance reviews, frame policies and procedures to spot and report
suspicious activities in Internet transactions

3.5(4) Liquidity Risk

Arises out of a banks inability to meet its obligations when they become due without
incurring unacceptable losses, even though the bank may ultimately be able to meet its
obligations. It is important for a bank engaged in electronic money transfer activities that it
ensures that funds are adequate to cover redemption and settlement demands at any particular
time. Failure to do so, besides exposing the bank to liquidity risk, may even give rise to legal
action and reputational risk.

3.5(5) Credit risk

Is the risk that a counter party will not settle an obligation for full value, either when due or at
any time thereafter. Banks may not be able to properly evaluate
The credit worthiness of the customer while extending credit through remote banking
procedures, which could enhance the credit risk. Presently, banks generally deal with more
familiar customer base. Facility of electronic bill payment in Internet banking may cause
credit risk if a third party intermediary fails to carry out its obligations with respect to
payment. Proper evaluation of the creditworthiness of a customer and audit of lending
process are a must to avoid such risk.

42
3.6 Internet Banking Problems of JBL

Lack of infrastructure: In JBL banking systems, IT and infrastructure is not as well

so good and developed. JBL has no digital database system and service is also
underlined. Because of this, customers will not get right service and maintenance to
their account service with securely.
Unavailability of ATM Booth: There is scarcity of ATM booth in all places. It
creates high dissatisfaction in customer mind.
Shortage of fund in ATM Booth: Most people complain that there is low money
reserve in ATM Booth sometimes they find empty.
High service charge: Online Banking charge is too high and it is still out of reach
among the middle class and lower class family.
Technological problem: There are some technological problem such as show empty
of own account money, PIN code rejection, Database cannot be support in the system
etc.
Shortage of Branch: Branches are not available so especially business people face
problems.
Securities problem: Some people cannot rely on online banking. They feel less
security on online Banking.
User of online banking: Number of user are low rather than other bank user on
online banking
Limited Areas: This bank provide online banking service in some specific areas.
Training and Development: Employees are not well trained in online banking.
Lack of knowledge of use: For carrying out Internet banking properly, a basic
knowledge of computers and the Internet is required, which limits the number of
people willing to avail this facility. Many people, who are not comfortable with
computers and the Internet, often find it difficult to use Internet banking. Therefore,
for beginners, Internet banking is really time-consuming. In addition to this, people
also find a difficulty in trusting a completely mechanized system like Internet
banking, in case of financial matters. In many instances, a simple mistake, like
clicking a wrong button, may create a big problem. And so, many individuals often
keep wondering if they have properly executed the transaction. But JBL has no
training and development opportunity for the customers to take better service.

43
 Problem of integration: Problems are also listed in the availability of system
integration in the process. Incompatibility between e banking applications and legacy
systems means that most banks require middle wear to integrate these systems.
System integrations has been and is still, to some extant a key barrier in e banking.
Shortcomings the technologist infrastructure is often the biggest problem and also
here include integrations of system.

Negative customer perception: Another big problem is that most of the customers
feel unsecured to make their transaction because when they make transactions this
report also go to the internet service provider and this will hamper their secrecy and as
perspective of Bangladesh our banking system have no individual service protocol.

Small number of services: Actually internet banking service of JBL is not so

aborigine. They are now just providing services of bank transfer, balance check, make
payment and especially fund disbursement is not possible now here. These are the
simple functions they are now performing. Also they are not using http server to
secure this service and they havent yet provide customer training for getting the
services clearly and easily.

44
 CHAPTER: FOUR

FINDINGS AND ANALYSIS

45
4.1 Empirical Analysis

With the advances in technology, many banks have taken the adequate measures to ward off
any problems related to the security of Internet banking. Customers can also follow some
simple precautionary measures, like not disclosing the password and pin number to anyone,
changing the password at regular intervals and installing antivirus software to ensure security
and safety of their Internet banking transactions. Internet banking tutorials are also provided
by many banks to help familiarize people with Internet banking. So, you can avail this facility
to use Internet effectively, for making your day-to-day financial transactions. To analysis we
can some tools of analysis, these are as follows.

4.2 SWOT Analysis

To find out the rationality of a product we must perform a swat analysis of this product and
services. This wills analysis the strength, weakness, opportunity and threats of the particular
services or product. To analysis the performance of internet banking of JBL we the following
analysis is considered.

Strength

JBL has made consortium with other banks through Q-cash and provided a combined ATM
service. Therefore customers are able to use the ATM of other banks made consortium with
JBL.

Real time online banking and use of OMIS as ERP brought a new dimension in the field of
internet banking of JBL.

A well-constructed website with necessary information attracts customers to get involved

with JBL.

Low operational cost to provide banking service.

Weakness

Small number of ATM available by the bank of its own.

Lack of services available by JBL.

46
 Lack of skilled manpower in this field of banking.

Opportunities

Number of the user of internet banking is increasing day by day.

Technologies and expertise are increasing in the ICT sector.
Cost of internet is reducing as a result of technological development.
Government is making rules and regulations and necessary security steps to reduce
security threats.

Threats

Recent criminal attacks on ATM reduce the reliability of the customers.

The hackers are also threat to the internet banking. Where the internet banking password
and information are not secured the security of money is at risk.

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4.3 Cost volume profit analysis

The main benefits of internet banking is the amount of time thus money it saves. Although internet
banking is restricted to managing account and making internet transactions, it cuts out much of the
needs to personal visit to bank. Using internet banking will also increase the efficiency of paying
money bills, debt and wages as it reduce the need for writing and sending cheque .where it can takes
five days to take clear. Wages and salary payments are also easy with this. Internet banking is able to
offers customers higher interest rates than high street banks due to their reduced overhead. Though
internet banking of JBL has taken an investment of more money but now operating expense will be
much lower. Again also customers will be satisfied through fast, accurate, east to use, and
comprehensive delivery of services.

4.4 Percentage of most lucrative internet services of JBL

2015

12%
20%
Electronic Money
Credit Cards
26% Debit Cards
13%
ATM
Point of Sales

29%

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

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4.5 Findings

Last couple of years JBL has increasing their services security and clarity and they are also
emphasizing on internet banking with consisting situations of banking world and are also
enforcing comprehensive applications of it.

The bank expert has determining that this sector will take by 100 percent customers who will
play a vital role in banking growth and as well as financial sector.

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

Already bank authority are also taking initiatives to train up their employee to provide the
better service .IT is also now over viewing that customer efficiency and satisfactions are also
increasing gradually.

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

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

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 CHAPTER: FIVE

RECOMMENDATIONS AND
CONCLUSION

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5.1 Recommendation

We know that Janata Bank limited is one of the famous commercial bank in Bangladesh.
They have been providing good online services which are given satisfaction and interest for
its clients/customers. They gave their clients electronic fund transfer facilities, ATM, Debit
card, credit card, POS, bill pay facilities in online etc. But they have also some lacking in
online banking process. For removing lacking, they should take following steps in the
online banking system-

Increase ATM booth: Spread ATM booth all over the country in important place.

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

Rises Credit card acceptance in all places.

Increase customer awareness about online banking of Janata bank.

Resolve technological problem by using latest technology.

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

Making Service charge of online banking as low as possible.

Provide proper training about online banking to the employees.

Training and awareness among employees: It is recommended that Janata Bank of

Bangladesh should conduct various training programs for the employees, so that they
will get aware with the terms of internet banking. After such programs they can create
awareness amongst the consumers.

Exchange of information on threats and vulnerabilities at appropriate forums:

There should be an open end discussion on the threats and vulnerabilities coming
across the functioning of internet banking work by the employees in the various
official forums and meets.

Build an optimal operating model by understanding which activities to retain

collaborate and outsource: There should be clear sight of operations which needs to
outsource to other companies, this will lead to ease in work for employees.

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

Bank should Create and sustain customer, investor and regulator confidence by
adopting international accounting standards : Adopting international standards
adds some more star to the glory of any company, JBL should impose such standards
when it comes to internet banking or virtual banking, this will enhance the goodwill
of JBL among regulator, customers and invertors.

Bank should anticipate and get prepared for regulatory changes: Laws regarding
IT or cyber laws get change as per the need. JBL should anticipate such kind of
changes and get loaded with various plans and actions.

Focus on identifying core competence: JBL possess some unique characteristics or

positive points in it and with the help of them it can become a leader in market. Bank
should identify such points and concentrate to flourish them more. This can be done
with the help of internet banking, as internet banking of JBL is getting largely
accepted by customers.

Increasing usage of mobile phones is going to revolutionize the banking culture

in near future: Mobile banking is also getting popular in the segment of internet
banking thus this can add some more steps to progress for JBL. Bank is into the
mobile banking but it is providing limited features.

More stress should be given on security concern on internet: There are some
people who are into unethical practices of hacking of accounts of customers. This is
nothing but the breach in the security of the JBL on internet. There should be some
measures in order to prevent such practices. IT structure should be unbreakable.

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5.2 Conclusion

As globally enhancing of information technology used also Bangladesh is maintaining the

serial, here Janata bank is playing a great roll with performing internet as well as internet
banking and they have taken a good position in internet banking. This its containing a great
beneficiary to the people but there have something which will be cause of hemp economy and
customers privacy. For that reason Janata bank should take many initiatives to contain free
from these risks. Internet banking is making business so much easier that any time fast I think
so. They have to emphasize into internet banking because it will take low operating cost for
both customers and bank as well it will increase profitability if bank . With following the
better service structure internet banking will reach door to door to customers and will make
customers life easy to easier.

Study states that internet banking provides greater reach to customers. Feedback can be
obtained easily as internet is virtual in nature. Customer loyalty can be gained. Personal
attention can be given by bank to customer also quality service can be served.

Bank should know that no system is perfect, however a system of such a type will need to be
very secure. This is a system which holds account details and customers wealth. If such a
system was not trusted and not reliable, then JBL would face serious laws and would lose
business.

After studying the SWOT analysis, we came to know various strengths of JBL such as quality
customer service, customer loyalty, easy access to information, 24 hours access, easy online
applications etc. JBL should put efforts to multiply the number of strengths. In terms of
weakness I come to know some of the major weaknesses they are lack of awareness of
internet banking among the customers, obsolesce of technology related to security,
complicated procedures of availing internet banking facilities, lack of knowledge among the
employees of JBL. JBL should concentrate on the weaknesses and reduce them to zero.

In the third segment of SWOT analysis of internet banking we dealt with opportunities like
95 % market of internet market is untapped, JBLs path to become first virtual bank. By
encasing such opportunities bank can become the leader in banking sector of Bangladesh. In
the last segment I come to know about various challenges which are in front of JBL, like
sameness in IT infrastructure within various banks, need of various vendor supports for

53
complex technology, maintaining secured IT infrastructure, alternative mechanism in case of
failure of present security system.

The company can take the advantage of the reputation it has created in the market for itself
and become more competitive

The recommendations and suggestions given, if adopted will improve the position of the
company substantially and optimal profitability coupled with better service and satisfactions
for investors may be achieved.

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 References

Annual report of Janata Bank Limited (2011-2015).

Humphrey, Albert (2005), "SWOT Analysis for Management Consulting", SRI Alumni
Newsletter (SRI International).

Nwankwo G.O. (2001), Bank Management Principles and Practice, UK: Malthouse Press
Limited
Santos, J. (2003), E-service quality: a model of virtual service quality dimensions,
Management Service Quality, Vol. 13 No. 3, pp. 233-46.
Kothari, C.R. (2006), Research Methodology, Methods and Techniques, New Age
International (P) Ltd., 2nd Edition.

Shirshendu Ganguli, Sanjit Kumar Roy, (2011),"Generic technology-based service quality

dimensions in banking: Impact on customer satisfaction and loyalty", International Journal of
Rashid, M. (2010), Banking Sector Challenges in Bangladesh, The Daily Star.
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www.wikipedia.org

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