ISLAMI BANK BANGLADESH LIMITED

TERM PAPER ON ONLINE

BANKING, MOBILE
BANKING AND ATM
SERVICE

4/25/2012
 Prepared For
Tazrina Farah
Course instructor
School of Business
United International University

Submitted by
Mahfuz Ahamad Khan ID. No.: 111093023
Md. Abdullah-al-mamun ID. No.: 111091412
Md . MehediKawsar ID. No.: 111091066

Md. Faysalahmed ID. No.: 111073017

Md. Niaz Hassan ID. No.: 111082021

Course Title: Principles of Banking and Insurance

Section: D
 Letter of Transmittal
25th August, 2012

Tazrina Farah

Course Instructor, School of Business

United International University.

Dear Ma’am,

Subject: Submission of Term Paper.

It is a great pleasure to submit herewith the term Paper for the course Principles Of Banking &
Insurance (FIN 3337)on online banking, mobile banking and ATM service of Islami Bank
Bangladesh Limited we exerted our best effort under your intensive guidance and supervision.

It was surely an opportunity for us to enrich our theoretical knowledge having relationship with
the practice. It gave us the opportunity to have real life working experience and to get insight
into the real banking procedure.Throughout the report we tried to describe our learning from the
online banking system of Islami Bank.

We hope that you will find this report informative and interesting. We will be glad to answer any
sort of query throughout this report and we will be pleased to provide any further clarification or
information in interpreting this analysis if you need.

Sincerely,

Mahfuz Ahamad Khan

Md. Abdullah-al-mamun
Md . MehediKawsar
Md. Faysalahmed
Md. Niaz Hassan

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 Acknowledgement
Support from various persons is required for the successful finalization of any course. we have
been fortunate to obtain the guidance and supervision of our teacher, our fellow classmates, and
others. First of all we would like to convey our salutation to almighty Allah for enabling us to
complete the report with sound health, and then Bachelor of Business Administration (BBA) for
having such a wonderful and unique course, through which we get the chance to learn about the
Banking services. We would like to pay our solemn homage to our course instructor Tazrina
Farah for her guidance.

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 Table of content
LETTER OF TRANSMITTAL ................................................................................................................. III

ACKNOWLEDGEMENT ........................................................................................................................ IV

TABLE OF CONTENT .............................................................................................................................V

EXECUTIVE SUMMARY ...................................................................................................................... VII

1. INTRODUCTION .................................................................................................................................1

1.1 GENERAL OVERVIEW.............................................................................................................................................. 1

1.2 SCOPE OF STUDY ................................................................................................................................................... 1
1.3 OBJECTIVE OF STUDY ........................................................................................................................................... 1
1.3.1 Specific Objectives ....................................................................................................................................... 1
1.4 LIMITATIONS OF THE REPORT ............................................................................................................................... 2

2. METHODOLOGY................................................................................................................................ 3

2.1 SOURCES OF DATA ................................................................................................................................................ 3

2.2 METHODS ............................................................................................................................................................ 3
2.2.1 Collection of Primary Data: ....................................................................................................................... 3
2.2.2 Collection of Secondary Data: ................................................................................................................... 3
2.3 INSTRUMENTS USED IN ANALYSIS.......................................................................................................................... 3

3. FINDINGS ........................................................................................................................................... 4

3.1 IBBL AT A GLANCE ................................................................................................................................................4

3.1.1 Deposit and investment Scheme of IBBl ....................................................................................................4
3.1.2 Aims and Objectives Of IBBL ..................................................................................................................... 5
3.2 ONLINE BANKING SERVICE .................................................................................................................................. 6
3.2.1 Services ....................................................................................................................................................... 6
3.2.2 Transaction Limit ..................................................................................................................................... 6
3.2.3 Charges ...................................................................................................................................................... 6
3.2.4 INTERNET BANKING SITUATION ......................................................................................................................... 7
3.3 SMS BANKING SERVICE ........................................................................................................................................ 7
3.3.1 Services ....................................................................................................................................................... 8
3.3.2 SMS Format ............................................................................................................................................... 8
3.3.3 Charges ...................................................................................................................................................... 8
3.4 INTERNET BANKING SERVICE............................................................................................................................... 8

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 3.4.1 Services ....................................................................................................................................................... 9
3.4.2 TRANSACTIONAL SERVICE ................................................................................................................... 9
3.4.3 INVESTMENT REPORT ........................................................................................................................... 9
3.4.4 FOREIGN BUSINESS REPORT ................................................................................................................ 9
3.4.5 CLEARING INSTRUMENT ....................................................................................................................... 9
3.4.6 FTT & FDD ................................................................................................................................................ 9
3.4.7 iTransfer (Fund Transfer)........................................................................................................................ 10
3.5 ATM SERVICE .................................................................................................................................................... 10
3.5.1 Services ...................................................................................................................................................... 10
3.5.2 Transaction Limit .................................................................................................................................... 10
3.5.3 Charges ..................................................................................................................................................... 10
3.5.4 Number of ATM booths ............................................................................................................................ 11
3.5.5 ATM Services » IBBL schemes- installment payment procedure ........................................................... 11
3.6 ACHIEVEMENTS OF IBBL ..................................................................................................................................... 11

4. ANALYSIS .......................................................................................................................................... 13

4.1 SWOT ANALYSIS ................................................................................................................................................13

4.2 COMPARISON AMONG ISLAMIC BANKS................................................................................................................ 14
4.2.1 daily traffic rank trend ............................................................................................................................. 14
4.2.2 daily reach(percent) ..................................................................................................................................15

APPENDIX.............................................................................................................................................. I

I. REFERENCES ......................................................................................................................................................I
II. GRAPHS .............................................................................................................................................................I
III. PICTURES ........................................................................................................................................................ III

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 Executive summary
Bangladesh is Muslim based country. Over 85% of its total population is Muslim. Islam is a
religion which prohibited transaction related to interest. Rather Islam talks about profit sharing.
Any conscious Muslim would avoid traditional banking system for that reason. From this the
concept of Islamic banking system arises. Previously its considered that Islamic sharia based
banks are not technologically advanced, due to the ignorance of its clients. But with time
changes need for technology grows, and for that Islami Bank Bangladesh Ltd. developed
“ibanking”. This iBankingenables “eIBS” system that helps IBBL to provide Online Banking,
IBBL iBanking, ATM, SWIFT, SMS Banking etc. in the report we try to express IBBL’s whole
online banking system, how it works, its benefits and constraints etc.

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 1. Introduction

1.1 General overview

Islami Bank Bangladesh Limited is the largest private bank in Bangladesh.It is the pioneer of
Islamic banking in Bangladesh. It became incorporated on March 13, 1983. It is a Joint Venture
Public Limited Company engaged in commercial banking business based on Islamic Shari'ah
with 58.03% foreign shareholding. It got 236 Branches & 30 SME/Krishi Branches i.e. total 266
Branches, which makes this the largest private bank in Bangladesh.

IBBL has taken the initiative to develop a large scale software to support the Islamic Banking
solution in the year of 2001. A team of 20 fresh and experienced graduates from different
reputed universities was formed under the supervision of a talented project manager and advisory
and consultancy services of local and western reputed universities made the project a success
history in Bangladesh.

1.2 scope of study

This report will give a clear idea on overall online banking, mobile banking and ATM services
available in our country. It also helps to know about IBBL’s attempt to enhance its banking
service by developing eIBS.

Idea about online banking in Bangladesh.

IBBL’s online banking condition.
Available services under online banking, ATM, and mobile/sms banking from IBBL.
Analysis of the study on IBBL.

1.3 Objective Of Study

Study or working on any subject must have an objective. It may be only one objective or a
combination of some objectives. Our study also has some objectives. Before submitting the
report we need to discuss briefly about our specific objectives.

1.3.1 Specific Objectives

To get a view ofIslamibank’s online banking system.

1
 To find out its online banking services available.
To know the detailed information regarding IBBL’s ATM services.
To find out its internet banking system.
To know its mobile/sms banking services availability.

1.4 Limitations of the report

When we developed this report, we faced these problems which disrupted the fulfillment of this
report. There were several constrains while preparing this reports. Only four-five weeks were not
sufficient to obtain complete information. While preparing the report, we faced a number of
problems which may be termed as limitations. They are as follow:

Lack of enough time due to university time restriction.

Difficulties of getting information due to the employees work pressure.
Lack of proper information due to organizational secrecy policy.
Up to date information is not available in many situation.
Last but not the least, we didn’t get enough time to make this report more informative
and accurate.

2
 2. Methodology

2.1 Sources of data

Both primary data and secondary data are used in this report. There are many tables and figures
in this report which are based on both primary and secondary data.

2.2 Methods

The techniques of collecting primary data are not same as the techniques of collecting secondary
data. The different methods and tools of collecting primary data and secondary data used in this
report are mentioned below:

2.2.1Collection of Primary Data:

The primary data has been collected through survey as undergraduates. The survey includes the
following:

Observations
Telephone interview
Personal interview through questionnaire

2.2.2 Collection of Secondary Data:

The secondary data has been collected from the bank’s prospectus, bank’s other published
information, annual report of the bank, previous research books and journals, IBBL’s website.

2.3 Instruments used in analysis

There are some tools which are used in analysis. These are various figures, tables, charts. These
instruments are used in the analysis with the information we got.

3
 3. findings

3.1 IBBL at a glance

Name: Islami Bank Bangladesh Limited.
Type: Private (Non-Government).
Industry: Banking, Financial services.
Founded: Dhaka, Bangladesh (1983).
Headquarters: Dhaka, Bangladesh.
Area served: Bangladesh & Overseas Products Banking services, ATM services,
Consumer BankingCorporate Banking, Investment Banking.
Employees: 10,068.
SWIFT : IBBLBDDH
Website: islamibankbd.com
E-mail address: [email protected]
Online account e-mail address: [email protected]

3.1.1 Deposit and investment Scheme of IBBl

Deposit Scheme

Al-Wadeeah Current Account

Mudaraba Savings Account
Mudaraba Term Deposit Receipt
Mudaraba Special Notice Account
Mudaraba Special Savings (Pension) Account
Mudaraba Hajj Savings Account
Mudaraba Savings Bond Scheme
Mudaraba Foreign Currency Deposit Scheme (Savings)
Mudarabawaqf cash deposit
Mudaraba Monthly Profit Deposit Scheme
MudarabaMuhor Savings Deposit Scheme

4
Modes of Investment

Bai-Murabaha
Bai-Muajjal
Hire Purchase Under ShirkatulMelk
Mudaraba
Musharaka
Bai Salam

Investment Scheme

Household Durable Scheme

Housing Investment Scheme
Real Estate Investment Scheme
Transport Investment Scheme
Car Investment Scheme
Investment Scheme for Doctors
Small Business Investment Scheme
Agriculture Implements Investment Scheme
Rural Development Scheme
Woman Entrepreneurs Investment Scheme
Micro Industries Investment Scheme
Mirpur Silk Weavers Investment Scheme

3.1.2Aims and Objectives Of IBBL

To conduct interest-free banking
To invest on profit and risk sharing basis.
To accept deposits on Mudaraba& Al-Wadeah basis.
To establish a welfare-oriented banking system.
To extend co-operation to the poor, the helpless and the low -income group
for their economic upliftment.
To play a vital role in human development and employment generation

5
 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

3.2Online Banking Service

IBBL has introduced its Online Banking service since 2006. Being the largest in online
connectivity among all the branches it is capable of providing the better customer service to its
clients. Registration is required to get this service. For registration please contact with your
branch. It could be mentioned here that Online Banking does not refer to internet Banking in
Bangladesh. It is basically ANY branch banking, or facility to do banking function from
anywhere in the country. As a result actual online banking came up with the name “e-banking”
or electronic banking.

3.2.1 Services
Cash Deposit

Cash Withdraw

Fund Transfer

Account Statement

Balance Inquiry

Investment Recovery

3.2.2Transaction Limit
There will be no limit for Cash Deposit and Fund Transfer.

For Cash Withdrawal, transaction limit will be Tk.10, 00,000 per day per account.

3.2.3Charges
For Cash Deposit, Cash Withdrawal and Fund Transfer, charges at the following rates and VAT
will be recovered from the Customer's Account:

Within the District

6
 Cash Deposit / Withdrawal / Transfer Amount Charges
Upto Tk. 20,000.00 Tk. 15.00
Above Tk. 20,000.00 Tk. 15.00 + 0.20 for next per thousand of part
thereof
Maximum Online Charge Tk. 1,500.00

Inter District
Cash Deposit / Withdrawal / Transfer Amount Charges
Up to Tk. 20,000.00 Tk. 20.00
Above Tk. 20,000.00 Tk. 20.00 + 0.30 for next per thousand of part thereof
Maximum Online Charge Tk. 2,500.00

Within the Divisional City Area

Cash Deposit / Withdrawal / Transfer Amount Charges

Up to Tk. 1,00,000.00 Free. But not more than 2 (two) times in a day.

3.2.4 internet banking situation

Where Visitors Go on Islamibankbd.com
Subdomain Percent of Visitors
ibblportal.islamibankbd.com 65.71%
islamibankbd.com 31.88%
career.islamibankbd.com 24.38%

3.3SMS Banking Service

IBBL SMS Banking IBBL has introduced its SMS banking service since 2008. Registration is
required. For registration please contact to your branch. SMS Facilities are applicable only for
our Online Branches.

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3.3.1Services
Multiple Account Registration

International Push- Pull Facility

Account Balance (BAL )

Mini Account Statement (STM)

Account Information (ACI)

3.3.2 SMS Format

IBB <space>SERVICE <space>PIN<space> A/C Serial
Send to : 6969 (for local clients) +8801714006969 (for international clients)

3.3.3 Charges
Till now, no charges required except the normal SMS service charge.For more information
please contact to your nearest branch or see the Rules and regulation given overleaf of the SMS
Banking Registration Form.

3.4Internet Banking Service

Islamic Bank Bangladesh Limited has been devoted to serving its customers since inception. We
are committed to introduce new services and to make existing services faster and better than
ever.iBanking is a cornerstone of our strategy, designed to accelerate our commitment to green
banking and to enable customers to do banking at their own convenience. They have introduced
two new services to all iBanking customers that reflect their continuous endeavor to put the
strategy into action. Wherever their clients are, using iBanking now they can:

Transfer funds (iTransfer) between IBBL accounts

Purchase airtime / Recharge account (iRecharge) from all mobile operators in

Bangladesh, except teletalk.

Note: some other graphs, which are regarding internet banking condition are in
Bibliography, and are described in Analysis part.

Daily Traffic Rank Trend

8
 Daily Reach(Percent)

*seefigure for islami bank bangladesh ltd(IBBL)’s daily reach and its daily traffic trend.

3.4.1 Services
ACCOUNT SERVICE:

Account Balance

Account Statement

Transaction Summary

3.4.2 TRANSACTIONAL SERVICE

iTransfer (Fund Transfer)

iRecharge (Purchase airtime / Recharge account)

3.4.3 INVESTMENT REPORT

Investment Account Statement

Customer wise Liability

Mode wise Liability

Liability at a glance of Party

3.4.4 FOREIGN BUSINESS REPORT

Cost Sheet for Negotiation

Cost Sheet for Realization

Cost Sheet for Retirement of a Bill

3.4.5 CLEARING INSTRUMENT

Credit Clearing Instrument Status

Debit Clearing Instrument Status

3.4.6 FTT & FDD

FTT Message Search

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 FDD Payment Search

3.4.7 iTransfer (Fund Transfer)

This service will facilitate you to transfer fund from your IBBL accounts to other IBBL accounts
instantly. In this case your source IBBL accounts should be registered in our iBanking service.

Conditions:

Maximum amount Tk. 1, 00,000.00 within 5 transactions per day.

Maximum 10 (Ten) account can be subscribed as a destination account.

Subscribed account cannot be deleted within 20 days.

After subscribing collect secret PIN CODE from Branch.

Charge applicable. One(1) taka per One thousand(1000) taka transfer

3.5ATM Service
IBBL has introduced its ATM Banking service since 2000. Being the largest in online
connectivity among the branches we are capable of providing the better customer service to our
clients.

3.5.1 Services
Cash Withdraw

Fund Transfer

Mini Account Statement

Balance Inquiry

3.5.2 Transaction Limit

For Cash Withdrawal maximum amount is Tk. 50,000 in a calendar date.

3.5.3 Charges
Tk.300 Yearly fee is applicable.

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3.5.4 Number of ATM booths
Currently 170 booths in 36 districts and more will be added eventually.

3.5.5 ATM Services » IBBL schemes- installment payment procedure

Pre-requisite
Must have an IBBL E-cash ATM card.
Must open a Hajj / Pension / Muhor / HDS account at IBBL.
Must apply for deposit of monthly installments under the schemes throughATM in
prescribed form supplied from card cell, ITD.
Must have sufficient amount of money in the ATM Link Account (MSA /AWCA / SND)
maintained at the branch.
Must maintain sufficient ATM balance.
Cardholders may deposit installments from 1stto 25th day of the month only for HDS.
Presently Cardholders may deposit installments from 1st to 20th day of the m o n t h o n l y
f o r H a j j , P e n s i o n a n d M u h o r S c h e m e s , w h i c h w o u l d b e extended
up to 25th later. However, clients would be able to do the same from 6thto 25thday of the
month if they deposit at the branch.

Paying installment of monthly Deposit Schemes

Go to any of the ATMs located anywhere within Dhaka/Sylhet/Chittagong City.

Insert your card into the ATM and type PIN –press ENTER.
Press the > key against Deposit
Press the > key against IBBL Schemes
Select the MSS / Hajj / Muhor / HDS
Select the installment month and ENTER
Confirm the transaction by pressing YES
Collect the payment receipt
If you want another transaction, press YES or press No to end transaction

3.6 achievements of IBBL

Islami Bank Bangladesh has set some milestones like,

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 More than 250 branches,
100% online branches,
In house core banking software etc.

Islami Bank also achieved many things with its constant performance. These are:

The Global Finance, a reputed U.S.A. based quarterly Financial Magazine, awarded
IBBL as the best Islamic Financial Institution of the country for the years 2008, 2009,
2010 & 2011.
The Global Finance also awarded IBBL as the best bank of the country for the year 1999,
2000, 2004 and 2005.
Bankers' Almanac (January 2001 edition) published by the Reed Business Information,
Windsor Court, England, IBBL's world Rank is 1771 among 3000 banks
selected by them.
This position was 1902 among 4500 selected banks as on January 1999 edition.
IBBL's country Rank is 5 among 39 banks as per ratings made by the
a b o v e Almanac on the basis of IBBL's Financial Statements of the year 2001.
IBBL was awarded for several times by international & national
organizations.
The Global Finance, a reputed London based quarterly magazine, awarded IBBL as the
best bank of the country for the year 1999 and 2000.
CICI Bank, Hong Kong, awarded IBBL as “The Quality Recognition Award-2009” for
U.S. Dollar Clearing (2009).
Bankers’ Forum awarded IBBL as the Best Bank for Corporate Social Responsibility for
2008 and 2009.
Exclusive economic weekly “The Industry” awarded IBBL as the Best Rated Bank
Award-2010.
The Citi Bank NA awarded IBBL as the “Largest Contributor” in Foreign Trade
Operations in Europe- Bangladesh corridor in 2009.
The UAE Exchange awarded IBBL for mobilizing around 30% of total foreign
remittance of the country.

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 4. analysis

4.1 SWOT Analysis

Strengths

In house core banking software.

Efficient and dedicated employees.
Largest private commercial bank in Bangladesh.

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 100% online branches.
Best online facilities among “Islamic” banks in Bangladesh.

Weakness

Bounded to perform only Islamic banking.

Few number of ATM booths.
market segment(set of clients) isn’t suitable for online banking.
Mobile banking is not developed enough.
Late comer in this sector.

Opportunities

People are more concerned about religion now.

Online banking, mobile banking, ATM are becoming popular in recent days.
Other Islamic banks are fallen behind in technological benefits.

Threats

Competition is extremely high.

Almost every banks open separate line for Islamic banking.
ATM is too weak.
Rumor about political involvement, which creates negative impression.

4.2 comparison among Islamic banks

4.2.1 daily traffic rank trend

Traffic rank for islamibankbd.com:

Traffic Rank Change

7 day 60,743 -10,264

1 month 63,653 +10,261

3 month 66,367 -28,124

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 Among the Islamic banks in Bangladesh Islami Bank has the traffic record, whereas other
didn’t come to the list yet.

4.2.2 daily reach(percent)

Estimated percentage of global internet users who visit islamibankbd.com:

Reach Change
7 day 0.0025 +20%
1 month 0.0023 -18%
3 month 0.00225 +46%

This represents the ability to reach people around the world.Islami Bank(IBBL) has the
highest reach among the Islamic banks in Bangladesh.

4.3 comparison among commercial banks

4.3.1 daily traffic rank trend

Traffic rank for islamibankbd.com:

Traffic Rank Change

7 day 60,743 -10,264
1 month 63,653 +10,261
3 month 66,367 -28,124
Here Brac Bank(BBL), and Duch-Bangla Bank(DBBL) got lot more traffic than IBBL, which
is better for IBBL.

4.3.2 daily reach

Estimated percentage of global internet users who visit islamibankbd.com:

Reach Change
7 day 0.0025 +20%
1 month 0.0023 -18%
3 month 0.00225 +46%

Here also BBL and DBBL got greater reach than IBBL, which is not good for IBBL.

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Note: ratio analysis or any other financial analysis cannot be provided, because of insufficient
information regarding specific growth or revenue from online banking, mobile banking, and
ATM services.

5.conclusion and recommendation

5.1conclusion

5.2.recommendation

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 Appendix

I. References
websites
http://www.alexa.com/siteinfo/islamibankbd.com
http://www.islamibankbd.com
http://www.scribd.com/doc/78227660/11/IBBL-s-World-rating
http://www.thefinancialexpress-bd.com/more.php?news_id=104106&date=2010-06-25
http://www.bangladeshtrades.com/banks-in-bangladesh/islamic-banking-in-
bangladesh.html
http://en.wikipedia.org/wiki/Islami_Bank_Bangladesh_Ltd

II. Graphs
Figure 3.1 Daily Traffic Rank Trend

Figure 3.2 Daily Reach(Percent)

i
Figure 4.1 SWOT analysis

Sales

25%
25%
strength
25%
25% weakness
opportunity
threat

ii
Figure 4.2.1 Daily Traffic Rank Trend[among Islamic banks]

Figure 4.2.2 Daily Reach(Percent)[among Islamic banks]

Figure 4.3.1 Daily Traffic Rank Trend[among local commercial banks]

iii
Figure 4.3.2 Daily Reach(Percent)[among local commercial banks]

Figure 5.2.1 online audience

Figure 5.2.2comparison on the basis of gender

iv
Figure 5.2.3 comparison on the basis of income