Online Banking System-Its Application in Some Selected Private Commercial Banks in Bangladesh

Abstract

The outcome of the study is based on both the primary and secondary data and information. The primary data were collected from a total number of 50 customers (25 big and 25 mid level customers) from 10 Private Commercial Banks (PCBs). Again, a total number of 50 bankers taking 5 from each sample banks were also selected as the respondents. Both the banks and customers were selected using convenient sampling for easy and smooth collection of data and information. Two sets of structured questionnaire keeping in line with the objectives were prepared for collecting the requisite data. The main research issues covered in the study are: adoption of online banking facilities in Bangladesh, identifying major components of online banking and their application, knowing the main online banking services offered by the selected banks, assessing customer satisfaction on online banking service and identifying the major problems of online banking service in selected banks. The main findings of the study are: i) it is observed that OBS has been introduced in Bangladesh in 1998. Up to December, 2011 OBS has in operation in a total number of 47 banks out of 56 banks. It is reported that fully OBS has been in operation in almost all foreign commercial banks. In all the 2 nd and 3 rd generation banks of local commercial banks OBS has been in full operation. In case of all 1 st generation banks and some 2 nd generation banks have introduced partial OBS.(ii) in most of the selected banks, the components namely debit card, credit card, automated teller machine such as Master Card, Visa Card, Q-cash Card, Point of sales, on line service, internet Banking and society for worldwide interbank financial telecommunication etc. have been introduced up to December 2011. (iii) the major online banking services are offered have been: View statements and account balances, Fund transfers, Bill payment, Manage savings and current account, Card service, Order cheque and books request, Stopping cheque, Fixed deposit placement and Requesting the bank statement. iv) on the basis of five point Likert scale, it is found that 60% of the customers have been highly satisfied, 24% of the customers have been satisfied and the remaining 16% of the customers have been unsatisfied on the online banking services offered by selected banks. As regards the impact of OBS on the customers, the study reveals that OBS reduces the frequency of customers' physical visits to the banks, customers are getting substantial benefits, customers are secured and customers access to accounts round the clock etc. v) the selected customers have identified some major problems of OBS such as unavailability of a backbone network connecting the whole country, inadequacy of reliable and secured information infrastructure especially in telecommunication infrastructure; sluggish ICT penetration in banking sector; insufficient legal and regulatory support for adopting e-banking; negative attitudes of management; lack of IT resources; lack of knowledge among employees and customers etc. The i...

Modelling the barriers to online banking in the Indian scenario: an ISM approach

“…Thulani et al (2009) opined that although the majority of banks have adopted online banking, the usage level remains relatively low, as the same is not been accessed by banking customers because there is no compatibility with the existing legal system. According to Sattar and Rahamn (2013) and Rotchanakitumnuai and Speece (2003), insufficient legal and regulatory supports act as a barrier to online banking. Online banking adoption is also affected by the inefficient redressal system of the country.…”

“…2.11 Lack of proper infrastructure/bank support Sattar and Rahamn (2013) examined that there is inadequacy of reliable and secure information infrastructure, especially in telecommunication, which dissuades customers from using online banking services. Qiu (2009) found that especially the older age group does not prefer e-banking, as there is no appropriate support extended by bank employees, leaving them with no option but to follow traditional methods.…”

“…Gu et al (2009) identified trust as a major enabler to online banking. However, India has faced a setback in terms of lack of trust in online banking (Kesharwani and Singh, 2012) services and lack of proper infrastructure (Sattar and Rahamn, 2013;Qiu, 2009). In India, only 7 out of 100 (7 per cent) account holders are using internet for banking transactions (McKinsey and Company, 2014).…”