Automation of SCBs to be done in phases for online banking
Shakhawat Hossain | Sunday, 10 August 2008
The country's three state-owned commercial banks are taking up automation project shortly for introduction of online banking, said officials of the banks and the finance ministry.
"Tender procedures have already been completed and approved for the automation" said Agrani Bank chief executive officer Abu Naser Bakhtiar.
However, the automation scheme of the state-owned commercial banks (SCBs) -- Sonali, Janata and Agrani -- will be completed in phases.
The first phase of the automation involves Tk 200 million for each of the bank. The fund will come from donors.
Beside, the SCBs will have to bear the cost of other phases of automation work amounting about Tk 1.0 billion, Mr. Bakhtiar said.
He said: "Introduction of the online banking through automation is imperative for the SCBs to cope with competition from the private commercial banks (PCBs)."
The share of business of the SCBs in the country's banking sector is falling fast.
From a 64 per cent in the early 2000s the SCBs' market share fell at 30 per cent in 2007.
A number of factors, including poor banking service, have been attributed to the fast decline in market share of the SCBs.
The PCBs, led by the multinational banks, are already offering online banking facilities and better services to the customers.
"People go to the private commercial despite payment of higher service charges," said a high official of another SCB.
This is because of the PCBs' quick and better services, he said.
The official said automation and the introduction of the online banking facility will be a key to the revival of the SCBs whose performances have been deteriorated due to political influence.
The SCBs have classified loan worth Tk 110.52 billion until March last and they have long been facing difficulties to realise the money.
The amount of classified loan grows mainly because of the poor performances of the SCBs, which were earlier know as nationalised commercial banks (NCBs), he said.
Early this year, the NCBs were turned into SCBs, which are now implementing a four-year plan to improve their performance.
The automation is part of the four-year plan. Its work will be monitored by World Bank, which is funding the first phase of the automation under the enterprise growth and bank modernisation project, said a senior ministry official. The first phase has to be completed in the current year, said the official.
The SCBs officials said priority will be given to the important branches in the divisional headquarters in the first phase of the automation.
Because, it is impossible to bring all branches under the automation network in the first phase, they said.
Sonali, the largest among the SCBs, has 1181 branches, including two in abroad. Janata has 844 branches in the country and four in abroad while Agrani has all 869 branches in the country.
"Tender procedures have already been completed and approved for the automation" said Agrani Bank chief executive officer Abu Naser Bakhtiar.
However, the automation scheme of the state-owned commercial banks (SCBs) -- Sonali, Janata and Agrani -- will be completed in phases.
The first phase of the automation involves Tk 200 million for each of the bank. The fund will come from donors.
Beside, the SCBs will have to bear the cost of other phases of automation work amounting about Tk 1.0 billion, Mr. Bakhtiar said.
He said: "Introduction of the online banking through automation is imperative for the SCBs to cope with competition from the private commercial banks (PCBs)."
The share of business of the SCBs in the country's banking sector is falling fast.
From a 64 per cent in the early 2000s the SCBs' market share fell at 30 per cent in 2007.
A number of factors, including poor banking service, have been attributed to the fast decline in market share of the SCBs.
The PCBs, led by the multinational banks, are already offering online banking facilities and better services to the customers.
"People go to the private commercial despite payment of higher service charges," said a high official of another SCB.
This is because of the PCBs' quick and better services, he said.
The official said automation and the introduction of the online banking facility will be a key to the revival of the SCBs whose performances have been deteriorated due to political influence.
The SCBs have classified loan worth Tk 110.52 billion until March last and they have long been facing difficulties to realise the money.
The amount of classified loan grows mainly because of the poor performances of the SCBs, which were earlier know as nationalised commercial banks (NCBs), he said.
Early this year, the NCBs were turned into SCBs, which are now implementing a four-year plan to improve their performance.
The automation is part of the four-year plan. Its work will be monitored by World Bank, which is funding the first phase of the automation under the enterprise growth and bank modernisation project, said a senior ministry official. The first phase has to be completed in the current year, said the official.
The SCBs officials said priority will be given to the important branches in the divisional headquarters in the first phase of the automation.
Because, it is impossible to bring all branches under the automation network in the first phase, they said.
Sonali, the largest among the SCBs, has 1181 branches, including two in abroad. Janata has 844 branches in the country and four in abroad while Agrani has all 869 branches in the country.