Mobile Banking System in Bangladesh: A Closer Study

A Closer Study

Assignment On

Mobile Banking System in Bangladesh: A Closer Study

Course code: MGT-312 Course Title: Fundamentals of MIS

Submitted to
Mr. Md. Rahimullah Miah Lecturer of MIS Department of Business Administration Leading University, Sylhet, Bangladesh

Submitted by
Faglul Karim Raihan ID: 1001010142
Sec-C, 7th Semester (24th Batch)

Department of Business Administration Leading University, Sylhet Date of Submission: April 18, 2012

Table of content
CHAPTER CONTENT NAME PAGE NO

Letter Of Transmittal Dedication Declaration Acknowledgement Letter Of Acceptance Abstract 1 2 Introduction General Context Of The Study Methodology Of The Study Result And Discussion Conclusion And Recommendations References Appendices Profile Of Author

i ii iii iv v 1 2-6 7-20

21

22-24

25-26

27-28 29-31 32

List of Tables
TABLE NO: 1 NAME OF TABLE Bkash Payments are now accepted at the following outlets Bkash Agent Location in Sylhet Sadar Mobile service operators of Mbanking Usage rate of M-banking customers Satisfaction level of M- banking customers PAGE NO: 9

2 3 4 5

10-11 23 24 24

List of Figures
Figure No:
1 2

Name of Figure
Country City Map Network Architecture for mobile banking system

Page No:
21 31

LETTER OF SUBMISSION
April 18, 2012 Mr. Md. Rahimullah Miah Lecturer of MIS Department of Business Administration Leading University, Sylhet, Bangladesh
Subject: Letter of Submission.

Dear Sir, It is an enormous pleasure to submit my assignment titled Mobile Banking System in Bangladesh: A Closer Study assigned as a requirement of our course related.

In preparing this assignment I have acquired many knowledge about mobile banking. I have tried my best to furnish the assignment with relevant data, which I had to collect from online and related journal. I hope this assignment will help the banking sector to gather some insights on the windows to do further studies in this aspect.

I would like to convey my tributes to you and thank you for giving me the opportunity to work on this topic. Your queries in this aspect will highly be expected.

Thank you Sincerely yours

Faglul Karim Raihan ID: 1001010142 Section C 7th Semester (24th Batch) BBA Program Department of Business Administration Leading University, Sylhet, Bangladesh

Dedication
In dedication to all my friends and family who help me find happy moments every day to celebrate

DECLARATION
This assignment paper is prepared by me. The title of this assignment is Mobile Banking System in Bangladesh: A Closer Study under the supervision of Mr. Md. Rahimullah Miah, Lecturer of MIS, Leading University, Sylhet, Bangladesh. Any duplication is prohibited without the permission of Author.

Faglul Karim Raihan

ID: 1001010142 Section C 7th Semester (24th Batch) BBA Program Department of Business Administration Leading University, Sylhet, Bangladesh E-mail: raihan_lu@yahoo.com Mobile:0171577865 April 18, 2012

ACKNOWLEDGEMENT
First of all I pay a special thanks to my almighty God, who made me able to complete this report. Then I would like to give thanks to Renowned Philanthropist Mr.Ragib Ali as he established Leading University and we got this opportunity to read here. After wards, I would like to express my heartfelt gratitude to Prof. Dr. Mr. Bashir Ahmed Bhuiyan, Head of the Department of Business Administration, Leading University-Sylhet. I would like to thanks our course instructor Mr. Md. Rahimullah Miah, respected lecturer of Leading University for giving me this chance to make a assignment. My thanks also goes to my family members and friends who are co-operated with me at any of the steps of the assignment and continuously support me without any hesitation and make themselves an important part of this job.

AUTHOR

LETTER OF ACCEPTANCE

This is to certify that Faglul Karim Raihan, ID No. 1001010143, Section C, 7th Semester,24th Batch, Department of Business Administration, Leading University, Sylhet, Bangladesh has completed his assignment work entitled on Mobile Banking System in Bangladesh: A Closer Study under my supervision. He has completed his work with sincerity, commitment and dedication. He discussed different issues and problems with me to meet the requirements of this study and preparing the assignment.

I wish all the best in his effort.

Md. Rahimullah Miah Lecturer of MIS Department of Business Administration Leading University, Sylhet, Bangladesh

ABSTRACT
Mobile banking is one of the latest tools for easy and convenient banking in the current world. Day to day mobile payment and banking has become popular in Bangladesh. Mobile Banking System in Bangladesh: A Closer Study is the title of this assignment. The main objective of the study is to take a fresh look at the current M-Banking situation in Bangladesh and prospect of mobile banking in Bangladesh also highlight some recommendations for rendering M-banking services effectively. Mobile Banking is a Banking process without bank branch which provides financial services to unbanked communities efficiently and at affordable cost. To provide banking and financial services, such as cash-in, cash out, merchant payment, utility payment, salary disbursement, foreign remittance, government allowance disbursement, ATM money withdrawal through mobile technology devices, i.e. Mobile Phone, is called Mobile Banking. DutchBangla Bank Limited (DBBL) has for the first time introduced its mobile banking service expanding the banking service from cities to remote areas. Currently many bank are providing this service and some bank are going to lunch this M-banking service. Among them BRAC Bank Limited mobile banking service named Bkash, Banglalink, Dhaka Bank and Western Union, Dutch-Bangla Bank Limited services are most popular.Bangladesh Post Office, also provide mobile money services seems like mbanking. Mobile banking is not available on every device and still some popular bank does not provide mobile banking at all. The most potential customer of mobile banking is rural people. About 35% of mobile banking consumer are highly satisfied with present mobile banking service.After analyzing collected data eventually put some

recommendation that may be proposed for further improvement of Mobile Banking in Bangladesh. In recommendation to reduced M-Banking limitation all banks should

provide this opportunity, Government should provide help about mobile banking. Banks can use all mobile operators to make more available in all over the country. Also they should provide User guide to make easier the use of b-banking to all intended customers.

CHAPTER ONE

1. Introduction
1.1 Mobile Banking: Mobile banking refers to a client-server system that is specifically designed for mobile devices, allowing banking customers to use handheld devices to access their accounts, pay bills, authorize fund transfers, or perform other activities. Like many other m-commerce services, mobile banking services can be challenging and no single company has all the expertise required to develop and deliver compelling services on its own. Mobile banking (also known as M-Banking, SMS Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile banking services were offered over SMS. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. Mobile banking has until recently (2010) most often been performed via SMS or the Mobile Web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the mobile device. [Website 3]

1.1.1 Background of Mobile Banking: A woman counts her cash after a withdrawal from the first cash point machine in London, in 1967. For 30 years, financial institutions have been on a quest to satisfy their customers need for more convenience. First came the automated teller machine (ATM), which New Yorks Chemical Bank introduced to the American public in 1969. It did little more than dispense cash at first, but the ATM evolved over time to become a true bank-away-from-bank, providing a full suite of financial transactions. Then come Internet banking in the mid-1990s, which enabled consumers to access their financial accounts using a home computer with an Internet connection. Despite its promise of ultimate convenience, online banking saw slow and tentative growth as banks worked out technology issues and built consumer trust. Today, Internet banking has reached a critical mass, with about 35 percent of U.S. households conducting bank transactions online. Not so with mobile phones. They can be carried anywhere and are -- by an enormous number of people. More than 238 million people in the U.S. have mobile phones. Thats a

whopping 78 percent of the population. And worldwide there are more than 3.25 billion mobile phone subscribers, with penetration topping 100 percent in Europe. If mobile phones only delivered voice data, then their use as a vehicle to deliver banking services would be limited. Most phones, however, also provide text-messaging capabilities, and a growing number are Web-enabled. That makes the mobile phone an ideal medium through which banks can deliver a wide variety of services. Banks classify these services based on how information flows. A pull transaction is one in which a mobile phone user actively requests a service or information from the bank. For example, inquiring about an account balance is a pull transaction. So is transferring funds, paying a bill or requesting a transaction history. Because banks must respond or take some action based on the user request, pull transactions are considered two-way exchanges. A push transaction, on the other hand, is one in which the bank sends information based on a set of rules. A minimum balance alert is a good example of a push transaction. The customer defines the rule -- "Tell me when my balance gets below $100" -- and the bank generates an automatic message any time that rule applies. Similar alerts can be sent whenever there is a debit transaction or a bill payment. As these examples illustrate, push transactions are generally one way, from the bank to the customer. [Website 1]

1.2 Objectives of the Study To identify prospect of mobile banking in Bangladesh. To make suggestions on the basis of findings. To provide precise knowledge of M-banking and its infrastructure. To narrate the present scenario of M-banking in Bangladesh. To identify the usage rate and satisfaction level of M-banking customers. To highlight some recommendations for rendering M-banking services effectively.

1.3 Scope of the Study The scope of the study is limited to the issues related to the Mobile Banking in Bangladesh. The assignment will focus only on the banking facility provider of the country through Mobile network.

1.4 Limitations of the Study Due to time constraints, the study has been conducted only on mobile banking service on secondary information. A macroscopic analysis (aggregate analysis) has been made here for the unavailability of appropriate data in some cases. To prepare this assignment I have faced a lot of problems such as unavailability of lab, electricity problem, unavailability of related books and journals, lack of time, unavailability of information in net etc. For more accurate analysis, further detail studies are required.

1.5 Methodology of the Study The assignment has been done mainly based on secondary sources of data or information. Secondary data has been collected from different publication material and web site as well as the books and material from different libraries, the hand note of the various seminars.

1.6 Literature Review

Rotchanakitumanuai and Speece (2003) Investigated why corporate customers do not accept mobile banking, which can assist banks to implement this self-service technology more efficiently. Many Thai banks are currently implementing mobile banking. Banks that offer service via this channel claim that it reduces costs and makes them more competitive. However, many corporate customers are not highly enthusiastic about mobile banking. They used in-depth qualitative interviews methodology for collecting their data. The interviews with Thai firms suggested that security of the Internet is a major factor inhibiting wider adoption. Those already using Internet banking seem to have more confidence that the system is reliable, whereas non-users are much more service conscious, and do not trust financial transactions made via Internet channels. Non-mobile banking users tend to have more negative management attitudes toward adoption and are more likely to claim lack of resources. Legal support is also a major barrier to Internet banking adoption for corporate customers.

El-Sherbini et al. (2007) Investigated the customers' perspectives of mobile banking, their perceived importance for it, usage patterns and problems rising on its utilization. The paper discussed the strategic implications of the research findings. Empirical data were gathered from bank customers in Kuwait to achieve the research objectives. All bank customers in Kuwait were considered as

population of research interest. The results showed the perceived importance of internet banking services by customers, current and potential use of MB services in Kuwait and problems perceived by bank customers in using MB. The researchers' main hypothesis tested that top five services considered relative important in Kuwait banks were "Review account balance", "Obtain detailed transactions histories, "Open accounts", Pay bills" and Transfer funds between own accounts".

Ahmed Ali said.(2010) I think I should clarify some of the suggestions you gave. 1. I agree that GP should have an option to link to bank accounts. But until now they have refused to allow such a link. 8 Banks already have this technology but GP has prevented them from serving GP customers. Banks have taken the initiative but GP has stopped it just because they can and thinking that their proposal will pass.

2. Yes GP will not pay interest. But that doesn't stop GP from earning interest on this money (the simply put it together and put it in a FDR) 3. As much as GP wants you to belive, Bangladesh isn't the only country where there are more mobile users than bank users. (I will get into that in another article). None of those countries are considering GP's version of mobile banking. 4. Short term deposits are more crucial to the banking industry than what you estimate. Nowhere in the world has a mobile company been put in charge of short term deposits. GP clearly didn't have good intentions. Otherwise all the foreign banks wouldn't group with local banks to oppose this outlandish proposal. Again this is not only me that feel this way. The entire world acted in opposition to GP's Mobile Banking Thesis. GP's Mobile Banking is not the same as 'Mobile Banking'

Sathye. (1999) Analyzed the factors affecting the adoption of Mobile banking by Australian consumers. His sample was from individual residents and business firms in Australia. The study focused on the capital cities where use of mobile internet and population was likely to be high. White and yellow pages were used as the frame of reference for personal and business customers, respectively. The findings suggest that security concerns and lack of awareness about mobile banking and its benefits stand out as being the obstacles to the adoption of mobile banking in Australia. He also suggests some of the ways to address these impediments. Further, he suggests that delivery of financial services over the Internet should be a part of overall customer service and distribution strategy. These measures could help in rapid migration of customers to mobile Internet banking, resulting in considerable savings in operating costs for banks.

CHAPTER TWO 2. General Context of the study

2.1Mobile Banking in Bangladesh Dutch-Bangla Bank Limited (DBBL) is Bangladesh's most innovative and technologically advanced bank. DBBL stands to give the most innovative and affordable banking products to Bangladesh Dutch-Bangla Bank Limited (DBBL) has for the first time introduced its mobile banking service expanding the banking service from cities to remote areas. Bangladesh Bank Governor Atiur Rahman yesterday inaugurated the service by depositing Tk 2,000 and withdrawing Tk 1,500 through Banglalink and Citycell mobile networks in Motijheel area. Bangladesh Bank has already allowed 10 banks to initiate mobile banking. Of them DBBL kicked off first." Mobile banking is an alternative to the traditional banking through which banking service can be reached at the doorsteps of the deprived section of the society, the central bank governor said at an inaugural press briefing at Hotel Purbani. Atiur Rahman said through mobile banking various banking services including depositing and withdrawing money, payment of utility bills and reaching remittance to the recipient would be possible. By going to the DBBL-approved Citycell and Banglalink agents throughout the country the subscribers on showing necessary papers and payment of a fee of Tk 10 can open an account. To avail of the banking service a subscriber will require owning a cell phone of any provider and he will be given a four-digit PIN. By using the PIN he can operate all types of banking services including depositing and withdrawing money maintaining security and secrecy of his account. The customer will hand over cash to the agent and the agent will initiate the transaction from his mobile phone, the agent will help the account holder to do the banking using his PIN. A customer can deposit or withdraw money five times a day and he can deposit or draw Tk 5,000 per day. One percent of the transaction account or Tk 5, whichever is higher, will be taken as cash-in-charges. In case of cash out the charge will be 2 percent of the transaction amount or Tk 10. However, the registration fee, salary and remittance disbursement services will be provided free of cost. DBBL has 4585 agent all over Bangladesh. Dhaka Division ( 2444 ), Chittagong Division ( 1207 ),Sylhet Division ( 306 ),Barisal Division ( 131 ), Rangpur Division ( 224 ), Khulna Division ( 129 ), Rajshahi Division ( 144 ) . [Website 4]

Features/Services of DBBL Mobile Banking:

-in (cash deposit) -out (cash withdrawal) -time Top-up

BRAC Bank Limited is set to introduce mobile banking secondly, a top official said the service will enable millions of banked and unbanked people to deposit, withdraw and transfer money through mobile phones. BKash, a joint venture between BRAC Bank and US-based Money in Motion, will provide mobile banking with a fully encrypted VISA technology platform for transactions through mobile phones. Any mobile user can register and open up a bKash account and then do transactions through their mobile phones in easy, convenient and reliable way. bKash will fundamentally change the way people now do transactions, as all transactions will be possible through mobile phones in future, said Syed Mahbubur Rahman, managing director of the bank. Customers will not need to come to the bank; rather the bank will go to them, he said at a press conference in Dhaka on the occasion of its 10th founding anniversary. The bank said a bKash account will act as a digital mobile wallet and anybody can take the service. Your mobile phone will become your wallet. Customers can get financial services through phones, even by the handset that costs the lowest, Rahman said. Under a partnership with UNDP and Local Government Division, bKash is rolling out mobile banking in 4,501 union parishads in the country. bKash has already signed a deal with a leading mobile operator and is in talks with others to enable all mobile users -- currently around 7.5 crore -- to have individual digital wallets, said Mamdudur Rashid, deputy managing director of the bank. BRAC Bank launched its operation 10 years back with the objective of bringing unbanked people under formal banking coverage. The business model of the bank is to mobilise deposits from urban areas and disburse it to rural areas. The country's youngest bank has already set some records: it has acquired over 12 lakh customers, bringing full banking services not only to small and medium enterprises, but all strata of the banking industry, said the bank Being the youngest Bangladeshi bank, we have emerged as the largest SME bank serving about 3.65 lakh entrepreneurs at grassroots level, an achievement that helped global recognition for this

Bangladeshi bank, said Rashid The bank believes in 3P philosophy -- people, planet and profit and has been active in Green banking. It has already turned 22 of its SME Unit Offices solarpowered and plans to convert the rest in the same manner by 2012. [Website 5]

Features/Services of bKash Mobile Banking: Cash in & cash out Send money Token - create token - encash token - redeem token Bkash Payments are now accepted at the following outlets
Outlet Agora Gulshan-2 Uttara Dhanmondi Shantinagar Elephant Road Nando's Dhanmondi Gulshan Barista Uttara Gulshan-1 Karwan Bazar Hallmark Gulshan-2 Dhanmondi Shantinagar Ramna 0183 487 7060 0183 487 7061 0183 487 7062 0183 487 7063 0183 336 2169 0183 336 2176 0183 336 2178 0184 111 3322 0184 199 6644 0182 307 4908 0182 307 4911 0182 307 4907 0182 307 4910 0182 307 4909 bKash Account Number

Payment My wallet - check balance - request statement - change pin

Table-1

Bkash Agent Location in Sylhet Sadar

Sylhet Sadar Thana/Upazilla Shop Name
Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Abu Kawsar Store Anjuman Enterprise Asha Electronics Asha Varieties Store Bandon Telecom Beani Bazar Departmental Store Bismillah Telecom Chandni Enterprize Ema Telecom Ima & Eva Telecom Imran Enterprise Inpage Teletalk Jamuna Telecom Janapriyo Telecom Kismat Photostat & Gallery M/S Hanifa Traders M/s. Arif Store M/s. Nazmul Telecom M/s. Nova Telecom M/s. Zahida Telecom Ma Enterprise Ma Photgraphic Centre Maa Telecom Maa Telecom Mim Varieties Store Mohadeb Store Murshed Telecom Mustafa Telecom My Choise Dot Com

Shop Address
Chand Manjil, Kalighat, Sadar, Ward No. 14, Sylhet Station Road, Puler Mukh, Dakkhin Surma, Sylhet Bandar Bazar, Puran Lane, Sylhet Lalbazar Road, Baruthkhana, Sylhet Dorga Gate, Sadar, Sylhet Airport road, No. 3 Khadim Nagar, Sylhet Al Hammad Trade Centre, Zinda Bazar, Sylhet Chandni Ghat, Ward No. 26, Sadar, Sylhet No. 2, Tahmina Rahman Mansion, Sylhet Akhalia, Sadar, Sylhet Gotatikar Point, South Surma, Sylhet Dorga Gate, Upazila: Kotwali, Union: 01 No Ward, District: Sylhet, Post Code: 3100 Dash Para, Khadim Nagar, Shah Poran, Sylhet Azad Shopping Center, Muktijuddha Chattar, Kadamtoli, Sylhet Islampur Bazaar, Upazila: Sylhet sadar, Union: 04 No Khadimpur, District: Sylhet, Post Code: 3100 Jitu Miah Point, Sheikh Ghat, Ward no. 1, Sylhet Sadar, Sylhet 25 No, WARD, SCC, Baipas Road (Daudpur), Sylhet Shibgong Point, Sadar, Sylhet 7 Masjid Market, Madina Market, Sylhet Naya Sarak Point, Sylhet Sadar, Sylhet Boteswar Bazar, Sylhet Sylhet Plaza Market (Ground Floor), Zindabazar, Airport Road, Kaltan Samity Market, Sylhet Shah Poran, Khadim Nagar, Sadar, Sylhet Surma Gate, Khadim Nogor, Sylhet Sadar, District: Sylhet, Post Code: 3100, Division: Sylhet. Kalighat, Sylhet Boteshar Bazar, Khadim Nagar, Sylhet Mirboxtula, Naya Sarak, Sylhet Polytechnique Gate, Sylhet Sadar, Ward No. 25, Sylhet

Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar Sylhet Sadar

Nazmul Telecom Nobodigonto Network Nowrin Telecom Piccadilly Gallery & Telecom Pinki VCD & Telecom Prime Lighting and Decorators R S Telecom Rahmania Telecom RK Enterprise Rukon Telecom S R Gift Gallery Saikat Enterprise Saya Telecom Shohag Phone Service Sikdar Enterprise Sky Tel Sohel Telecom Sonny Audio Complex Star Telecom Star Telenet Sylhet Robi Sheba Tanmoy Enterprise Zahed & Sons

Etim School Road, Baghbari, Kotwali, Sylhet Notun Bazar Akhalia Sadar, Tuker Bazar, Sylhet No. 3 Karimullah Market, 3rd Floor, Bandarbazar, Sylhet Howapara Main Road, Zinda Bazar, Sylhet Airport road, Khadim Nagar, Sylhet Meghna B-16, Daria Para, Ward no. 2, Sylhet Surma Market, Sadar, Sylhet Chowki Dighi, Airport Road, Sylhet Subidbazar, Moinul Building, Sylhet Bhatalia Road, Sylhet Sadar, District: Sylhet, Post Code: 3100, Division: Sylhet. Tilagor Point, Upazila: Sylhet, Union: 21 No Ward, District: Sylhet, Post Code: 3100 Taltola Point, Amzodia Market, Sylhet Serampur Bazar, South Surma, Sylhet Airport Road, Choukidekhi, Sylhet Bandarbazar, Sylhet Bashundhara, Rajbari, Raynagar, Sylhet Kazitula, Sadar, Sylhet Baluchar PointM.C.Collage Road, Sadar, Sylhet Airport Road, Ambarkhana, Sylhet Gate no. 2, Usmani Medical Road, Ward no. 3, Sadar, Sylhet 117-Azadi, Mirboxtula, Sylhet Kanishail Road, Shamimabad, Sylhet Lais Super Market, Station Road, Sylhet Table-2

Rima Music & Telecom Mu Market, Nipobon Aa/a, Khadim Nagor, Sador, Sylhet

Banglalink, Dhaka Bank and Western Union jointly launched the Mobile Money Transfer service. With this new Mobile Money Transfer service enabled by Banglalink, Dhaka Bank and Western Union, consumers in Bangladesh who register for a Dhaka Bank approved account in Banglalink Mobile can choose to credit the money sent through the Western Union Money TransferSM service from over 200 countries and territories to their mobile account. Bangladeshi expatriates can also visit a Western Union Mobile Money TransferSM enabled Agent locations to conduct a Mobile Money Transfer and send cash to any valid Banglalink mobile phone number. Banglalink mobile users (Dhaka Bank approved account holders) may have access to their money from any of over 1,700 Dhaka Bank-accredited Banglalink Mobile Cash Points which are open till 8pm every day, seven days a week. In the future, this mobile account balance may also be used for local fund transfers, utility payments, train ticket purchase and airtime topups. Speaking on the occasion, Banglalinks chief commercial officer Asher Yaqub Khan said: Our philosophy at Banglalink is based not only on pioneering new mobile services, but also making mobile technology as affordable and accessible as possible for consumers. Western Union moved money from 170 countries to Bangladesh in 2011 and is present at 437,000 agent locations in over 200 countries and territories. Banglalinks mobile network covers over 87 percent of Bangladesh geographically where over 97 percent of people live in. Dhaka Bank is providing the banking infrastructure underling the service.Dhaka Bank Managing Director Khondker Fazle Rashid thanked the central bank for initiating a visionary step like Mobile Financial Services.He said Dhaka Bank has always tried to support Bangladesh Banks endeavour to provide banking coverage to the unbanked population of the country and has been the first-ever bank to execute mobile-based transaction in the country. Western Union Regional Vice President for South Asia and Southeast Asia Ratheesh Kumar said: Western Union is celebrating its 160th anniversary and has been moving money for

better for over 135 years. After working in Bangladesh for over 17 years, this service is another significant milestone. Bangladesh has grown to be the worlds seventh remittance-receiving market, with a growing need for Bangladeshis overseas to send money to support their families back home. Remittances make up 9.6 percent of the countrys GDP. Over 70 percent of Bangladeshs population lives in rural areas where financial services may not be available. [Website 2] Bangladesh Post Office The regular paper based money order service of the post office seemed a time consuming, expensive and inefficient approach of remit money to any part of the country. There was a demand for quick transfer of money to locations where the beneficiary can collect and use it instantly. With this perspective in view, Bangladesh Post launched a new money order service named Electronic Money Transfer Service (EMTS), commonly known as Mobile Money Order Service. This fulfilled the expectations of people to remit the desired amount of money to their near and dear ones so as to utilize when they need. This is mobile as well as web based remittance service available in all important post offices of the country. The sender can send the money within a minute and recipient/beneficiary can collect it instantly. Both sender and recipient get confirmation of the remittance and disbursement as soon as it is made in their mobile phones. This service is available in all important post offices of the country. Presently 2000 post offices provide the EMTS which is covering all district, upazilla/thana and important/busy rural post office locations. Every month hundreds of post officials are being trained and the service is expanded to those locations.

Bangladesh Post maintains a server and call center to monitor and support the service. All Electronic Money Transfer Service locations (post offices) are equipped with computer, internet connectivity and/or mobile phones which are used to send the issue or payment request to the server. Procedure: The sender goes to the post office and fills up an issue form (EMO -1) giving required information like sender name, address, mobile phone number, recipient's name, address mobile phone number, amount of money to be sent etc. The post office staff sends the information to the central server through the computer or official EMTS mobile phone. When the request is accepted and confirmed by the server through issuing SMS generating a 16 digit

unique PIN to senders mobile phone and a separate confirmation message is sent to issuing post office. The sender shall inform the recipient to collect the money from his/her nearest post office. The recipient goes to the post office and again fill up the disburse form (EMO-2) and claim the money showing the PIN. The post office counter operator verifies the information given by the recipient from server with those used earlier by sender; if everything is match the disbursement procedure is made. As soon as the disbursement is completed the sender is again confirmed by another SMS generated by the server. [Website 8]

Features
1.Remittance in a minute 2.User Friendly- adoption of mobile phones & applications 3.Maximum Area coverage: Locations distributed throughout the country (presently 2000 POs), to be expanded to all Post Office locations 4.Transaction security ensured by a 16 digit auto PIN generation mechanism 5.Independent of Mobile Operator-customer enjoying mobile operator's service can use this service. 6.EMTS devices not specific to power sources like electricity -have freedom of using any Source of Power (electricity, battery, solar charger) 7.Ensure customer satisfaction- Daylong well acquainted Help Desk Service 8.Optional Corporate Services: a)One 2 Many transactions-Option for Salary Disbursement b)Many 2 One Transactions- Option for collection of tution/Admission fees from students 9.Location Independent Disbursement 10.Widely used Network Partner- Banglalink Mobile Operator 11.Database Management and Security-VPN Connectivity 12.Scope to add new value added service and future expansion

2.2 History of Mobile Banking in Abroad: Improving access to financial services, such as savings, deposits, insurance and remittances, is vital to reducing poverty. Savings can help poor people to invest in productive assets like livestock, a loan may help to expand business activities, and insurance can provide income for a

family if a breadwinner becomes sick. In many developing countries, however, 9 out of 10 people do not have a bank account or access to basic financial services. Poor people are often not considered viable customers by the formal financial sector as their transaction sizes are small, and many live in remote areas

beyond the reach of banks branch networks. Informal banking services such as microfinance and village savings and loan associations remain limited in their reach. The first mobile banking and payment initiatives were announced during 1999 (the same year that Fundamo deployed their first prototype). The first major deployment was made by a company called Pay box (largely supported financially by Deutsche Bank). The company was founded by two young Germans (Mathias Entemann and Eckart Ortwein) and successfully deployed the solution in Germany, Austria, Sweden, Spain and the UK. At about 2003 more than a million people were registered on Pay box and the company were rated by Gartner as the leader in the field. Unfortunately Deutsche Bank withdraws their financial support and the company had to reorganise quickly. All but the operations in Austria closed down. Another early starter and also identified as a leader in the field was a Spanish initiative (backed by BBVA and Telephonica), called Mobi Pago. The name was later changed to Mobi Pay and all banks and mobile operators in Spain were invited to join. The product was launched in 2003 and many retailers were acquired to accept the special USSD payment confirmation. Because of the complex shareholding and the constant political challenges of the different owners, the product never fulfilled the promise that it had. With no marketing support and no compelling reason for adoption, this initiative is floundering at the moment. Many other large players announced initiatives and ran pilots with big fanfare, but never showed traction and all initiatives were ultimately discontinued. Some of the early examples are the famous vending machines at the Helsinki airport supported by a system from Nokia. Siemens made announcements in conjunction with listed and high-flying German e-commerce company, Brokat. Brokat also won the lucrative Vodafone contract in 2002, but crashed soon afterwards when it runs out of funds. Israel (as can be expected) produced a large number of mobile payment start-ups. Of the many, only one survived Trivnet. Others like Adamtech (with a technically sound solution called Cell pay) and Paytt disappeared after a number of pilots but without any successful production deployments. Initiatives in Norway, Sweden and France never got traction. France Telecom

launched an ambitious product based on a special mobile phone with an integrated card reader. The solution worked well, but never became popular because of the unattractive, special phone that participants needed in order to perform these payments. Since 2004, mobile banking and payment industry has come of age. Successful deployments with positive business cases and big strategic impact have been seen recently.

2.3 SWOT Analysis of Mobile Banking Strengths: 1. Mobile as a technology provides all the support required to leverage Banking transactions. 2. Ease of availability- any time, any where. 3. Rapid growth of Mobile and wireless market. Weakness: 1. Lack of awareness about the new channel among the mobile users. 2. Security concerns about the new channel 3. Mobile Handset Operatability 4.Application distribution

Opportunity: 1. Rapid increase in the Mobile user base and acceptance of the Mobile technology even in Rural areas makes a bigger market available for mobile banking to expand. 2. With technology advancements in Mobile handsets rich features can be embedded in the application. 3. Lowering of Mobile Tarrif rates - GPRS plans, SMS

Threats: 1. Regulatory restrictions by "Bangladesh Bank to launch Mobile banking as a separate channel. 2. Acceptance of new technology by users. 3.Customer misuse of products and services 4. Traditional banking risks such as credit risk, liquidity risk and market risk are also present in e-banking sectors.

2.4 Advantages of Mobile Banking:

The biggest advantage that mobile banking offers to banks is that it drastically cuts down the costs of providing service to the customers. For example an average teller or phone transaction costs about $2.36 each, whereas an electronic transaction costs only about

$0.10 each. Additionally, this new channel gives the bank ability to cross-sell up-sell their other complex banking products and services such as vehicle loans, credit cards etc. For service providers, Mobile banking offers the next surest way to achieve growth. Countries like Korea where mobile penetration is nearing saturation, mobile banking is helping service providers increase revenues from the now static subscriber base. Service providers are increasingly using the complexity of their supported mobile banking services to attract new customers and retain old ones. A very effective way of improving customer service could be to inform customers better. Credit card fraud is one such area. A bank could, through the use of mobile technology, inform owners each time purchases above a certain value have been made on their card. This way the owner is always informed when their card is used, and how much money was taken for each transaction. Similarly, the bank could remind customers of outstanding loan repayment dates, dates for the payment of monthly installments or simply tell them that a bill has been presented and is up for payment. The customers can then check their balance on the phone and authorize the required amounts for payment. The customers can also request for additional information. They can automatically view deposits and withdrawals as they occur and also pre- schedule payments to be made or cheques to be issued. Similarly, one could also request for services like stop cheque or issue of a cheque book over ones mobile phone. There are number of reasons that should persuade banks in favor of mobile phones. They are set to become a crucial part of the total banking services experience for the customers. Also, they have the potential to bring down costs for the bank itself. Through mobile

messaging and other such interfaces, banks provide value added services to the customer at marginal costs.

Such messages also bear the virtue of being targeted and personal making the services offered more effective. They will also carry better results on account of better customer profiling. Yet another benefit is the anywhere/anytime characteristics of mobile services. A mobile is almost always with the customer. As such it can be used over a vast geographical area. The customer does not have to visit the bank ATM or a branch to avail of the banks services. Research indicates that the number of footfalls at a banks branch has fallen down drastically after the installation of ATMs. As such with mobile services, a bank will need to hire even less employees as people will no longer need to visit bank branches apart from certain occasions. With Indian telecom operators working on offering services like money transaction over a mobile, it may soon be possible for a bank to offer phone based credit systems. This will make credit cards redundant and also aid in checking credit card fraud apart from offering enhanced customer convenience. The use of mobile technologies is thus a win-win proposition for both the banks and the banks customers. The banks add to this personalized communication through the process of automation. For instance, if the customer asks for his account or card balance after conducting a transaction, the installed software can send him an automated reply informing of the same. These automated replies thus save the bank the need to hire additional employees for servicing customer needs.

2.5 Disadvantages of Mobile Banking

Security: Security experts generally agree that mobile banking is safer than computer banking because very few viruses and Trojans exist for phones. That does not mean mobile banking is immune to security threats, however.

Mobile users are especially susceptible to a phishing-like scam called "smishing." It happens when a mobile banking user receives a fake text message asking for bank account details from a hacker posing as a financial institution. Many people have fallen for this trick and had money stolen through this scam. Online banking is usually done through an encrypted connection so that hackers cannot read transmitted data, but consider the consequences if your mobile device is stolen. While all banking applications require us to enter a password or PIN, many people configure their mobile devices to save passwords, or use insecure passwords and PINs that are easy to guess. Compatibility: We need a smart phone to get the most out of mobile banking.

Mobile banking is not available on every device. Some banks do not provide mobile banking at all. Others require you to use a custom mobile banking application only available on the most popular smart phones, such as the Apple iPhone and RIM Blackberry. Third-party mobile banking software is not always supported. If we do not own a smart phone, the types of mobile banking we can do are usually limited. Checking bank account balances via text message is not a problem, but more advanced features such as account transfers are generally not available to users of "dumb phones." Cost: The cost of mobile banking might not appear significant if we already have a compatible device, but we still need to pay data and text messaging fees. Some financial institutions charge an extra fee for mobile banking service, and we may need to pay a fee for software. These extra charges quickly add up, especially if we access mobile banking.

2.6 Prospect of Mobile banking in Bangladesh

Mobile Banking is a Banking process without bank branch which provides financial services to unbakedcommunities efficiently and at affordable cost. The aim of the service is to bring more people under the umbrella of banking service. Bangladesh Bank governor Dr Atiur Rahman inaugurated the service through deposit and withdrawal of money from two banking outlets in the city. Government thinks it has a great prospect as it is a new technology in digital Bangladesh. But in Bangladesh many people think traditionally, because they cannot think it has any facility to use mobile banking. 69% people feel mobile banking has prospect in Bangladesh whereas 31% think it has no prospect in Bangladesh as many people will not feel interest or have belief on mobile banking.

2.7 Upcoming Mobile banking in Bangladesh

Mercantile Bank Limited By next six month Mercantile Bank Limited will introduce branchless mobile banking in 50 union information service centers as pilot programme to provide banking facilities to the grassroots level in the country. The remaining UISCs will be brought under the programme in phases. All banking facilities including opening of bank account, cash withdrawal and depositing of money and receiving remittances will be available through the mobile banking.

Islami Bank Bangladesh Limited SSL Wireless and Islami Bank Bangladesh Limited have entered an agreement to provide Mobile Banking Services in Bangladesh for all the major telecom providers.

In accordance with the agreement, SSL Wireless will provide both Push and Pull Banking solutions to Islami Bank Bangladesh Limited with the aid of the mobile phone SMS features. From now on, whenever any customer of Islami Bank Bangladesh Limited is in need to know the details of the account balance and his or her mini account statement, they simply have to send a standard SMS from their handset to a designated short code 6969, that SSL Wireless provides to Islami Bank Bangladesh Limited under this agreement. After receiving the SMS from the customer, a query will then be dispatched from the highly 128 bit SSL encrypted server that is installed on Islami Bank Bangladesh Limiteds end to the customer letting them know of the details they are interested in.

SSL Wireless is the first of its kind in the entire nation to provide such highly automated mobile banking solutions to all of the subscribers for any network carrier in Bangladesh including Grameenphone, Aktel, Banglalink, Warid Telecom, CityCell and TeleTalk. This highly secured service will not only enable the remote users to connect with the bank from their home or office but it will also save much time for both the customer and the bank. Mobile banking solutions is one of the highest growing value added services in Bangladesh with SSL Wireless taking up the majority of the market share since their inception. SSL Wireless also have introduced the remote account transactions for everyone in Bangladesh with a mobile phone and in the near future the customers of IBBL will receive the money sent from any place of home or abroad through this service. [Website 7]

CHAPTER THREE 3. Methodology of the study

Site Selection The topic chosen for the assignment is Mobile Banking in Bangladesh. Site Design I work with non-government sector and also include government sector. Country Map Figure 1: Country City Map

Source: [Website 2] Data Collection All the data and information which is related to my task was collected from secondary source. Data Analysis I use Microsoft Word and Microsoft PowerPoint to prepare this assignment.

CHAPTER FOUR 4. Result and Discussion

Mobile banking is a new technology in Bangladesh which started from 31st March 2011. Dutch Bangla Bank Limited pioneered in mobile banking services in Bangladesh. Most people heard about it but not have a clear idea. According to a survey report almost 94% people heard about mobile banking and 6% havent heard about mobile banking. Many people heard about mobile banking. But they yet have not felt that they should use it as they are happy to use traditional banking system. Some people feel interest to use it. About 55% people feel they should use it and 45% people havent feel to use mobile banking according to the survey.

Mobile banking is real time on-line banking. As it is on-line banking it takes less time than traditional banking. It will make access to banking and advanced payment, transactions at affordable cost People have not to wait by standing in a long line which is happen in traditional banking system. But some people think it takes higher time and some people think it takes same time as traditional banking. Mobile banking is available anytime, anywhere throughout the country. So it can save ones time. But all people not think the same. About 70% respondents think that mobile banking can save their time, where as 30% think it cannot save time.

Mobile Banking drastically cuts down the costs of providing service to the customers.It is convenient, affordable and it is much more effective in developing savings habits, it will make access to banking and advanced payment transactions at affordable cost. All people know that its cost is not higher than traditional banking. Around 56% respondents say its cost is lower, 20% say same and 24% say it is affordable than traditional banking. . A positive aspect of mobile phones is that mobile networks can reach remote areas at low cost.

It is much safer and safeguard against fraudulent transactions. One can trust mobile banking as traditional banking system. It has secured pin code which is known by the user, and also has a check digit without it no one can deposit money. But in Bangladesh traditional branch-based banking remains the most widely adopted method of conducting banking transaction. The poor

often have greater familiarity and trust with mobile phone companies than formal banking institutions. Furthermore a mobile handset can easily be adapted to handle banking transactions. But it is not commonly known by all. From the survey itis found that 63% respondents think mobile banking is trust worthy and 37% respondents feel it is not trust worthy.

It is much more effective in developing savings habits. Its using system is also easy. Anyone can use it. Poor people are often not considered viable customers by the formal financial sector as their transaction sizes are small, and many live in remote areas beyond the reach of banks branch networks. Informal banking services such as microfinance and village savings and loan associations remain limited in their reach. So, mobile banking system develops to bring poor people into banking system. 83% respondents face or heard no problem to use mobile banking. But 17% respondents heard or face problems to use it likesometimes transaction do not reach at time, cannot operate it easily as traditional banking, not trust worthy.
Mobile service operators of M- banking

Name of Banks Brac Bank Dhaka Bank Mercantile Bank Limited Dutch-Bangla Bank Islami Bank Bangladesh Bangladesh Post Office

Mobile service operators GrameenPhone, Aktel. GrameenPhone, Banglalink. GrameenPhone, Citycell, Aktel, TeleTalk.

GrameenPhone, Citycell, Aktel, Banglalink. Grameenphone, Aktel, Banglalink, Warid Telecom, CityCell and TeleTalk Grameenphone, Aktel, Banglalink, Warid Telecom, CityCell and TeleTalk

Table-3

Usage rate of M-banking customers

Usage level Frequently Sometimes Hardly No use at all No. of customers 10 40 30 20 Table-4 Percentage (%) 10 40 30 20

Satisfaction level of M- banking customers Satisfaction level Highly Medium Low No. of customers 28 40 12 Table-5 Percentage (%) 35 50 15

In this assignment some major findings are Service providers are increasingly using the complexity of their supported mobile banking services to attract new customers and retain old ones. A very effective way of improving customer service could be to inform customers better. Credit card fraud is one such area. The banks add to this personalized communication through the process of automation. Mobile banking is not available on every device. Some banks do not provide mobile banking at al. The cost of mobile banking might not appear significant if we already have a compatible device, but we still need to pay data and text messaging fees. Mobile Banking reduces the costs of providing service to the customers. Most of the rural area people are the potential customer of mobile banking.

CHAPTER FIVE

5. Recommendation
On the basis of field observations and analysis of the gathered information from the relevant studies the following recommendations may be proposed for further improvement of Mobile Banking in Bangladesh: Government must have to take adequate measures to ensure the uninterrupted supply of raw materials for M-Banking. To reduced M-Banking limitation all banks should provide this opportunity. Government should easier the process to lunch mobile banking service. Government should provide help about mobile banking. Rules and Regulations must be stricken about mobile banking. Employees of customer service department of banks should be co-operative for registration and educating the customers this technology-based service. User guide should be provided to all intended customers. Banks should use all mobile service operators available in Bangladesh. More services should be included in M- banking.

6. Conclusion
More than three billion mobile phones are currently in operation worldwide and fully 70% of the total population of developing countries fall within the coverage of existing cellular networks. Mobile banking is suspended to become the big killer mobile application arena. However, banks going mobile the first time need to step the path cautiously. The biggest decision that banks need to make is the channel that they will support their services on. Mobile banking through an SMS based service would require the lowest amount of effort, in terms of cost and time, but will not be able to support the full breath of transaction-based services. However, in markets like India where a bulk of the mobile population users' phones can only support SMS based services, this might be the only option left. On the other hand a market heavily segmented by the type and complexity of mobile phone usage might be good place to roll of WAP based mobile applications. According to the Gartner Group, mobile banking services will have to support a minimum of 50 different device profiles in the near future. However, currently the best user experience, depending on the capabilities of a mobile phone, is possible only by using a standalone client.. Mobile Application based banking is poised to be a big m-commerce feature, and if South Korea's foray into mass mobile banking is any indication, mobile banking could well be the driving factor to increase sales of high-end mobile phones. Nevertheless, Bank's need to take a hard and deep look into the mobile usage patterns among their target customers and enable their mobile services on a technology with reaches out to the majority of their customers.

CHAPTER SIX

7. REFERENCE
Website: 1.http://www.scribd.com/search?query=assignment+on+mobile+banking+in+bangladesh 2. http://www.google.com 3. http://en.wikipedia.org/wiki/Mobile_banking 4. http://www.dutchbanglabank.com/electronic_banking/mobile_banking.html 5. http://www.brac.net/node/1001 6. http://www.bkash.com/ 7. http://www.thedailystar.net/newDesign/news-details.php?nid=51635 8. http://www.bangladeshpost.gov.bd/EMTS.asp

BOOKS/ JOURNAL 9. BRAC Bank mobile bank news. 10. Shirali S. and Shirali S. M. H., Mobile Banking Services in the Bank Area," SICE Annual Conference, Kagawa University, Japan, pp.2682- 2685, September 17-20, 2007. 11. Ahmed, S. M. Sohel, and Asaduzzaman, Md. (2011), Consumer Choice Behavior towards Mobile Phone Operators in Bangladesh -Journal of Arts, Science & Commerce, Vol. II, pp. 30-39 Al-Akhras T Mousa,Al-Saiyeed Rizik,Alian Marwah and Qwasmi Doaa:Innovative Secure Mobile Banking Services,2011, p.195. 12. Benamati, J. S., & Serva, M. A. (2007). Trust and distrust in online banking: Their role in developing countries. Information Technology for Development, 13(2), 161-175. 13. Brown, I., Cajee, Z., Davies, D., & Stroebel, S. (2003). Cell phone banking: Predictors of adoption in South Africa--an exploratory study. International Journal of Information Management, 23(5), 381-394. 14. Burt, R. S. (1992). Structural holes: The social structure of competition. Cambridge: Harvard University Press.

15. Castells, M. (1996). The rise of the network society (Vol. 1). Malden, MA: Blackwell. 16. Chipchase, J., Persson, P., Piippo, P., Aarras, M., & Yamamoto, T. (2005). Mobile essentials: field study and concepting. Paper presented at the 2005 Conference on Designing for User eXperience. From http://portal.acm.org/citation.cfm?id=1138301 17. And many other PDF report on Mobile Banking collect from internet. 18. http://palpapers.plynt.com/issues/2005Sep/sms-banking/

APPENDICES
Features/Mobile Banking Services (In General)
Mobile banking can offer services such as the following: 1) Account Information: -statements and checking of account history

ccess to card statements

2) Payment, Deposits, Withdrawals & Transfers:

-payment handling

A specific sequence of SMS messages will enable the system to verify if the client has sufficient funds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When depositing money, the merchant receives cash and the system credits the

client's bank account or mobile wallet. In the same way the client can also withdraw money at the merchant: through exchanging sms to provide authorization, the merchant hands the client cash and debits the merchant's account. 3) Investments:

-time stock quotes

4) Support: cluding mortgage approval, and insurance coverage

5) Content Services:

alty-related offers -based services

Based on a survey conducted by Forrester, mobile banking will be attractive mainly to the younger, more "tech-savvy" customer segment. A third of mobile phone users say that they may consider performing some kind of financial transaction through their mobile phone. But most of the users are interested in performing basic transactions such as querying for account balance and making bill payment.

Network Architecture for mobile banking system

The following is a diagram shows a structural design for the mobile banking scheme.

Figure-2
In the above diagram the 2-way SSL link between the service provider and between the mobile banking application and the service provider and also between the service provider and the wireless carrier ensures confidentiality of data. The email message sent by the bank is PGP encrypted and signed in order to ensure confidentiality and integrity of data. The following diagram shows the recommended placement of the SMS banking components in the banking infrastructure. [website 18]

PROFILE OF AUTHOR
Name: Faglul Karim Raihan Date of Birth: 16-12-1989 Father`s Name: Md: Rashid Ahmed Mother`s Name: Raihana Sultana Chowdhury Permanent Address: 19/3 Fazil Chisth, Subidbazar, Sylhet, Bangladesh. Occupation: Student ID No: 1001010142 Section: C Semester: 7 Batch No: 24 Department: Business Administration Name of Institution: Leading University, Sylhet, Bangladesh Contact No: +88-01715777865 Email: raihan_lu@yahoo.com