Another new dimension in digital banking is Mobile Banking which is handier to the customers. It is also known as M-Banking. The banking transactions under this system are performed through 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 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. The services rendered by a mobile bank are: mini-statements and checking of account history; alerts on account activity; monitoring of term deposits; access to loan statements; card statements; mutual funds/equity statements; status of cheque, stop payment of cheque; ordering cheque books; recent transactions; due date of payment; PIN provision, change of PIN and reminder over the internet; blocking of (lost/stolen) cards; domestic and international fund transfers; micro-payment handling; mobile recharging; commercial / bill payment; deposit at banking agent, etc. Despite huge prospects, only a few Bangladeshi banks have started very limited mobile banking.

Now let's see why is this digital banking? I-banking is time-saving, cost-effective, safe, convenient, and provides any time access from any location. If the we think from bank's point of view, e-banking has a number of advantages like low set up cost, low operational cost, capability to cater to a large customer base, saving a lot of operational cost, offering personalized services to customers, and reduction of burden on branch banking and many more. [Figure-1]

Although I-banking has bright prospects, it involves some financial risks as well. The major risk of e-banking includes operational risks (e.g. security risks, system design, implementation and maintenance risks); customer misuse of products and services risks; legal risks (e.g. without proper legal support, money laundering may be influenced), etc. Security of Internet transactions is of paramount concern to most customers particularly where financial information is involved. Banks must convince their customers that their web sites are secure and sufficient safety measures have been taken to assure security at the transaction levels. Protection of customers' financial information and profile are indispensable if the public is to embrace Internet banking. For effective security measures both the bank and customer must play their respective role together. The banks should develop their own online software rather depending on other vendors. Simultaneously, our government should think about formulating law for tackling the imminent cyber crime.

One thing must be remembered that for maintaining security the clients should not depend on the bank alone, rather s/he should be aware of phishing, pharming and use the internet or other devices properly, carefully and wisely.

Phishing is a way of attempting to acquire information such as usernames, passwords, and credit card details by masquerading as a trustworthy entity in an electronic communication. Attempts to deal with the growing number of phishing incidents include legislation, user training, public awareness, and technical security measures.

Pharming is a hacker's attack aiming to redirect a website's traffic to another, bogus website. Pharming can be conducted either by changing the host's file on a victim's computer or by exploitation of a vulnerability in Domain Name System (DNS) server software. In recent years both pharming and phishing have been used for online identity theft information. Pharming has become of major concern to businesses hosting e-commerce and online banking websites. Sophisticated measures known as anti-pharming are required to protect against this serious threat. Antivirus software and spyware removal software cannot protect against pharming.

In spite of having a number of drawbacks in our country there is still some prospects for Digital Banking. Bangladesh Railway has a high-speed optical fiber network of 1,800km covering most major parts of the country. This optical fiber network can be a blessing for e-banking in Bangladesh. It is praiseworthy that some commercial banks are already using this optical fiber network for operating their online transactions, ATM and Point-Of-Sale services. Digital telephone exchanges are available in 389 Upazilas. Work on rest of the Upazilas is under way. Though late, Bangladesh has joined the information super-highway by connecting itself with international submarine cable system in 2006. A total of 159 Internet Service Providers (ISPs) have now been connected with this system of which 64 are actively providing services. We have got WiMAX (Worldwide Interoperability for Microwave Access) which is a part of fourth generation wireless-communication technology. Presently two WiMAX operators are providing this high speed internet connection. Setting up ICT park, raising allocation for developing ICT infrastructure, waiving taxes on computer peripherals have accelerated the prospects of e-banking in Bangladesh. Bangladesh Bank is encouraging the scheduled banks to introduce digital banking system. It has introduced some online services for the scheduled banks such as, online CIB services, LC monitoring system, Online export monitoring system, Bangladesh Bank e-tender system, submission of weekly statement, prize bond matching, and online EXP submission etc. Bangladesh Electronic Fund Transfer Network (BEFTN) is already under way led by the central bank.

Some critics may complain that the automation will induce job cuts. As a result, the unemployment problem will further deteriorate. What should be made clear at this point is that automation will help create skilled jobs like administrator, system analyst, programmer, operator etc. and actually help reduce the unemployment problem, not increase it.

Source: The Financial Express/ Bangladesh/ 6th Dec 2011

The strength of Standard Chartered's balance sheet, risk management approach and market position across the growing economies of Africa, Asia and the Middle East were cited by Standard & Poor's "S&P" in its upgrade of Standard Chartered Bank from A+ to AA- on 1 December 2011.

The S&P upgrade clearly demonstrates the Bank's differentiated position versus other international banks. It reinforces the Group's growing balance sheet, minimal wholesale funding requirements, diversified income streams and the strength of its capital and liquidity positions. Standard Chartered Bank is in a very small group of international banks to have been upgraded from S&P under the new methodology - with most institutions being downgraded or remaining the same.

Source: Financial Express/ Bangladesh/ 6th Dec 2011

The World Bank (WB) and the International Monetary Fund (IMF) are being put on the dock at frequent intervals in Bangladesh and, possibly, in many other developing countries. Recently the IMF has been strongly criticised by a section of our economists, for not releasing the extended credit facility to the tune of USD 1.0 billion and, more importantly, attaching a lot of conditions to the release of the said facility. The economists, interestingly, all of them belonging to one ` specific school of thought', were of the opinion that we should generate the equivalent amount, if not more, to finance our important projects being imbued with the 'spirit of the War of Liberation'. They also felt that the IMF or WB growth prescriptions were always typical and faulty, therefore we should stay away from them.

At this point in time, we possibly need to review the role of the World Bank and the IMF in Bangladesh and examine the validity of the allegations that are being made against these institutions. As a nation, we have behaved in a self-defeating manner on numerous occasions in the past including championing in corruption, political violence, social injustice and economic mismanagement. It is extremely important to ensure that we are not committing a similar mistake by implicating two institutions that are trying to assist a country that is being harmed more by a segment of its own people, including corrupt political parties, dishonest business community, `playing to the gallery' type leaders and, to some extent, by a section of `narrow -- focused' press.

Bangladesh joined the World Bank in 1972, soon after Independence. Early projects financed by the Bank built shelters in cyclone-affected areas and provided urgently needed drinking water. The Bank also worked with others to revive the war-torn country's economy. Since 1972, the Bank's concessional lending arm, the IDA, has financed around 200 projects with loans of about USD 10 billion. In the 1970s, the Bank supported efforts to expand agricultural production, which have helped Bangladesh achieve near self-sufficiency in food production, food supply and develop population and family planning programmes that have dramatically lowered the high fertility rates. From the mid-1980s, the Bank expanded support for more energy projects, particularly in the oil and gas sectors, to reduce the country's dependence on imported energy and speed up development of its own gas reserves. The Bank also supported the government's efforts to encourage private-sector development and to deal with distortions in trade, pricing, credit allocation and interest rates. One of the World Bank's flagship projects in Bangladesh is Jamuna Bridge. The Bank's private sector arm, the International Finance Corporation (IFC), was instrumental in developing privates sector leasing, housing finance, mobile phone, power plant and large manufacturing projects too. The Bank also helped significant improvement in the country's financial sector, through the changes brought in by `financial sector reform project' or 'strengthening the central bank' project and so on.

There is nothing wrong for an economist or a policy analyst or for that matter, the WB or the IMF, to suggest that interest rates should go up or down in demanding economic situations, governance should improve, privatization of state-owned enterprises (SOE) should be expedited, corruption should be eliminated, the poor should have access to credit, financial sector should be more efficient and inclusive or their operating model to be more self sustaining, country should be less reliant on subsidies and the private sector should be strengthened. It was deemed that our economists in question, gradually came to the realisation that the country needed more reform, market liberalization, accountability and transparency in execution of the development projects and independence of the regulatory institutions responsible to drive the future of this nation. So, why are the World Bank and the IMF being made the scapegoats? The reality of the matter is that the concerned economists or at least some of them were deeply involved in and taking credit for influencing the election manifesto or budgetary process of the present government. However, when the prices of essentials have gone up with rising inflation, exports and remittances started showing a downward trend, government bank borrowing is rising to an abnormal level, the national budget is found to be not as effective as was told before, it is nothing surprising that they (under the influence of opportunist group) found it easy to pass the blame on to the World Bank and the IMF, the institutions that never enjoyed cheap popularity.

The World Bank is a vital source of financial and technical assistance to developing countries around the world. The WB is not like a conventional a bank. It is made up of two unique development institutions -- the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) owned by 185 member countries. Each institution plays a different but supportive role in its mission of global poverty reduction and the improvement of living standards. The IBRD focuses on middle income and creditworthy poor countries, while IDA focuses on the poorest countries in the world. Together they provide low-interest loans, interest-free credit and grants to developing countries for education, health, infrastructure, communications and for many other purposes.

The IMF's primary purpose is to ensure the stability of the international monetary system -- the system of exchange rates and international payments that enables countries to buy goods and services from each other. To maintain stability and prevent crises in the international monetary system, the IMF reviews national, regional, and global economic and financial developments. It provides advice to its member countries, encouraging them to adopt policies that foster economic stability, reduce their vulnerability to economic and financial crises, and raise living standards, and serves as a forum where they can discuss the national, regional, and global consequences of their policies. The IMF also makes financing temporarily available to member countries to help them address balance of payments problems -- that is, when they find themselves short of foreign exchange because their payments to other countries exceed their foreign exchange earnings or at least being challenged.

The Bank and the Fund have their own limitations, they also have track record of, not always serving the interest of the member or borrowing countries, at times due to their 'one-size-fits-all' strategy or not being able to understand the ground realities. This is more applicable to the fund. The Bank is more on the listening and learning road. However, both these institutions are evolving and shifting from their 'age old' stances, with the changing realities in the member countries. Therefore, it is now up to the member countries, why and how they would league with the two institutions and ensure member's interest is better served, rather than being dictated by the institutions. Tying up the release of development support credit with reforms in a specific segment of the economy has yielded very good result for the financial sector in Bangladesh, not necessarily it will yield similar results in every sector. However, discipline brought in by various exercises has helped the country to streamline its many project conception and implementation process as well as brought in overall efficiency in economic management.

India or China, never thought of closing down the World Bank or the IMF offices, rather they make sure, how they would make the best use of these global development institutions. They negotiate well with them on their terms to get the best for their people. Why cannot Bangladesh pursue the same goal?

Source: The Finance/ Bangladesh/ 6th Dec 2011

Md. Badiul Alam, additional managing director of National Bank Limited is seen speaking at the inaugural function of a training course held in the city recently.

Foreign Trade’ was held in the city recently.

National Bank Training Institute organised the training course, said a press release.

A number of 30 executives and officers, working in different authorised dealer branches throughout the country, attended the course.

Source: The Daily Sun/ Bangladesh/ 6th Dec 2011

MA Matin has been promoted to the post of additional managing dir-ector (AMD) of Uttara Bank Limited.

Prior to this new role, Matin was the deputy managing director of the Bank, said a press release.