Messages

61

Faculty Forum / Structuring a Credit Proposal

« on: June 06, 2013, 03:41:41 PM »

Structuring a Credit Proposal


The following are the key issues to be subject matter of discussion in a credit proposal:

1.   Purpose: The purpose of financing sets the main parameters for designing the credit structure, because it affects the safety of repayment and earnings from the business. The proposal should be bankable. The following proposals are relevant for the proposal:
•   Compliance of bank’s internal policy (for example financing for preferred sector and sun rise industries).
•   The commercial and economic logic of the purpose to be financed.
•   The ability and experience of management to handle the proposed venture.
•   Compliance with bank’s legal requirements.
•   Legal complications arising from the purpose of the financing which may impair the creditworthiness of the advance.
2.   Amount: Is it adequate for the purpose? The loan should be need-based, not more and not less. A bank which leads inadequately not caring how the balance requirement will be funded may create problem for itself as well as for the customer.

3.   Margin contribution: This is the stake of the proponent in the project. In project lending secured by fixed assets, a cash contribution from the company itself acts as evidence of commitment and cushion to the lenders against failure of the project or failure of the secured assets to generate repayment. In unsecured transactions, the focus shifts to the financing mix of debt and equity.

4.   Portfolio consideration: Bank’s proposed exposure to the relevant corporate group/ industry should be considered. It is not advisable to put all eggs in one basket.

5.   Credit risk and term: Banks will wish to limit their exposure to individual high risk and long term advances more tightly than to lower risk and short term advances.

6.   Yield: Increasingly banks are concerned with maximizing their yield from the use of their balance sheet and the amount lent can be a significant determinant of the overall return from the deal. The more the spread, the better for the bank.

7.   Legal Consideration: Whether the company has borrowing power to borrow the amount and the bank to lend it.

8.   Repayment: The key issue is how the bank is to be repaid and what is the margin of error if operations deteriorate. The following factors will be looked into in this regard.

•   The type of repayment source
•   The quality of repayment source
•   The currency of income from the repayment source
•   Cash flows protection (i.e. the margin of error)
•   Financial flexibility (i.e. the alternative sources of fund to cover shortages)
•   Asset protection to cover the bank if cash flow is inadequate
•   The need for good documentation

9.   Security and Quasi-security: Security whether main or collateral is the banker’s protection against non-payment from the primary repayment source. It is the insurance against failure and takes the form of a legally enforceable claim on tangible assets or a third party guarantee. However, unsecured transactions may be acceptable where cash flow protection is generous and reliable and adequate asset cover is available for general creditors of the company.


10.   Control and monitoring: The ability to take control of lending situation, before deterioration in borrower’s condition become terminal, is crucial. It is achieved by insertion in the documentation of provisions which is breached, will enable the bank to switch over from tern facility to one immediately repayable on demand.

11.   Designing Credit Facilities: Designing the details of credit facilities within the broad parameters of benefits to the borrower and protection and remuneration for the bank broadly involves:
•   Fixing up cash and working capital demand loan limits
•   Bills purchase and /or discounting facilities
•   Term loan / deferred payment facilities
•   Contingent liabilities limits for LCs and guarantees

12.   Pricing: This is a very important aspect of lending especially in a competitive environment for achieving satisfactory remuneration for the bank. Pricing is based on the directives issued by the central bank from time and the market rates. It will consider:
•   The risk-reward ratio
•   The cost of administration and overheads
•   Capital adequacy cost and cost of statutory reserves
•   The need to optimize yields on investments


Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

62

BBA Discussion Forum / Structuring a Credit Proposal

« on: June 06, 2013, 03:40:22 PM »

Structuring a Credit Proposal


The following are the key issues to be subject matter of discussion in a credit proposal:

1.   Purpose: The purpose of financing sets the main parameters for designing the credit structure, because it affects the safety of repayment and earnings from the business. The proposal should be bankable. The following proposals are relevant for the proposal:
•   Compliance of bank’s internal policy (for example financing for preferred sector and sun rise industries).
•   The commercial and economic logic of the purpose to be financed.
•   The ability and experience of management to handle the proposed venture.
•   Compliance with bank’s legal requirements.
•   Legal complications arising from the purpose of the financing which may impair the creditworthiness of the advance.
2.   Amount: Is it adequate for the purpose? The loan should be need-based, not more and not less. A bank which leads inadequately not caring how the balance requirement will be funded may create problem for itself as well as for the customer.

3.   Margin contribution: This is the stake of the proponent in the project. In project lending secured by fixed assets, a cash contribution from the company itself acts as evidence of commitment and cushion to the lenders against failure of the project or failure of the secured assets to generate repayment. In unsecured transactions, the focus shifts to the financing mix of debt and equity.

4.   Portfolio consideration: Bank’s proposed exposure to the relevant corporate group/ industry should be considered. It is not advisable to put all eggs in one basket.

5.   Credit risk and term: Banks will wish to limit their exposure to individual high risk and long term advances more tightly than to lower risk and short term advances.

6.   Yield: Increasingly banks are concerned with maximizing their yield from the use of their balance sheet and the amount lent can be a significant determinant of the overall return from the deal. The more the spread, the better for the bank.

7.   Legal Consideration: Whether the company has borrowing power to borrow the amount and the bank to lend it.

8.   Repayment: The key issue is how the bank is to be repaid and what is the margin of error if operations deteriorate. The following factors will be looked into in this regard.

•   The type of repayment source
•   The quality of repayment source
•   The currency of income from the repayment source
•   Cash flows protection (i.e. the margin of error)
•   Financial flexibility (i.e. the alternative sources of fund to cover shortages)
•   Asset protection to cover the bank if cash flow is inadequate
•   The need for good documentation

9.   Security and Quasi-security: Security whether main or collateral is the banker’s protection against non-payment from the primary repayment source. It is the insurance against failure and takes the form of a legally enforceable claim on tangible assets or a third party guarantee. However, unsecured transactions may be acceptable where cash flow protection is generous and reliable and adequate asset cover is available for general creditors of the company.


10.   Control and monitoring: The ability to take control of lending situation, before deterioration in borrower’s condition become terminal, is crucial. It is achieved by insertion in the documentation of provisions which is breached, will enable the bank to switch over from tern facility to one immediately repayable on demand.

11.   Designing Credit Facilities: Designing the details of credit facilities within the broad parameters of benefits to the borrower and protection and remuneration for the bank broadly involves:
•   Fixing up cash and working capital demand loan limits
•   Bills purchase and /or discounting facilities
•   Term loan / deferred payment facilities
•   Contingent liabilities limits for LCs and guarantees

12.   Pricing: This is a very important aspect of lending especially in a competitive environment for achieving satisfactory remuneration for the bank. Pricing is based on the directives issued by the central bank from time and the market rates. It will consider:
•   The risk-reward ratio
•   The cost of administration and overheads
•   Capital adequacy cost and cost of statutory reserves
•   The need to optimize yields on investments


Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

63

Faculty Forum / The concept of offshore Banking

« on: June 04, 2013, 02:14:37 PM »

The concept of offshore Banking

The term offshore banking has been defined in a variety of ways and its meaning has changed over time. It its broadest connotation offshore banking implies some tax privileges, freedom from exchange controls and absence or at least a reduced level of supervision and regulation. It involves foreign currencies and transactions are conducted between non-residents. In other words, offshore banking is carried out in any foreign currency by banks that are domiciled in specifically designated centres with customers that are non-residents of these centres.

Offshore banking may also be described as the carrying on of banking and financial activities in an environment which is essentially free of financial and exchange controls i.e., tax havens or low tax areas commonly referred to as ‘ Offshore Finance Centres ’. These conditions also normally include favorable banking regulations and banking laws considerably less stringent than those in most domestic jurisdictions.

An offshore centre may also be defined as a place, which could be a country, an area or a city, which has made a deliberate attempt to attract international banking business by reducing or eliminating restrictions upon operations as well as by lowering taxes/ or other levies. International banking business here refers to non-resident, foreign currency dominated, assets and liabilities.   

There are several geographic regions in which offshore centres are located. It comprises, among others, the Bahamas, the Cayman Islands, the Netherlands Antilles and Panama. There are twenty one such centres including the Bahamas, Hong Kong, Jersey, Luxemburg, Panama and Singapore. This number has increased now. It may be noted that the distinction between major international financial centres, such as, London, and offshore financial centres has been further blurred by the international deregulation of the 1980s.

Offshore banks may be created by the corporate group to handle external borrowing or to consolidate intra-group finance or banking transactions. Corporations involved in international trade may use an offshore bank as a foreign or multi-currency management centre.



Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

64

Faculty Sections / The concept of offshore Banking

« on: June 04, 2013, 02:14:15 PM »

The concept of offshore Banking

The term offshore banking has been defined in a variety of ways and its meaning has changed over time. It its broadest connotation offshore banking implies some tax privileges, freedom from exchange controls and absence or at least a reduced level of supervision and regulation. It involves foreign currencies and transactions are conducted between non-residents. In other words, offshore banking is carried out in any foreign currency by banks that are domiciled in specifically designated centres with customers that are non-residents of these centres.

Offshore banking may also be described as the carrying on of banking and financial activities in an environment which is essentially free of financial and exchange controls i.e., tax havens or low tax areas commonly referred to as ‘ Offshore Finance Centres ’. These conditions also normally include favorable banking regulations and banking laws considerably less stringent than those in most domestic jurisdictions.

An offshore centre may also be defined as a place, which could be a country, an area or a city, which has made a deliberate attempt to attract international banking business by reducing or eliminating restrictions upon operations as well as by lowering taxes/ or other levies. International banking business here refers to non-resident, foreign currency dominated, assets and liabilities.   

There are several geographic regions in which offshore centres are located. It comprises, among others, the Bahamas, the Cayman Islands, the Netherlands Antilles and Panama. There are twenty one such centres including the Bahamas, Hong Kong, Jersey, Luxemburg, Panama and Singapore. This number has increased now. It may be noted that the distinction between major international financial centres, such as, London, and offshore financial centres has been further blurred by the international deregulation of the 1980s.

Offshore banks may be created by the corporate group to handle external borrowing or to consolidate intra-group finance or banking transactions. Corporations involved in international trade may use an offshore bank as a foreign or multi-currency management centre.



Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

65

Real Estate / The concept of offshore Banking

« on: June 04, 2013, 02:13:50 PM »

The concept of offshore Banking

The term offshore banking has been defined in a variety of ways and its meaning has changed over time. It its broadest connotation offshore banking implies some tax privileges, freedom from exchange controls and absence or at least a reduced level of supervision and regulation. It involves foreign currencies and transactions are conducted between non-residents. In other words, offshore banking is carried out in any foreign currency by banks that are domiciled in specifically designated centres with customers that are non-residents of these centres.

Offshore banking may also be described as the carrying on of banking and financial activities in an environment which is essentially free of financial and exchange controls i.e., tax havens or low tax areas commonly referred to as ‘ Offshore Finance Centres ’. These conditions also normally include favorable banking regulations and banking laws considerably less stringent than those in most domestic jurisdictions.

An offshore centre may also be defined as a place, which could be a country, an area or a city, which has made a deliberate attempt to attract international banking business by reducing or eliminating restrictions upon operations as well as by lowering taxes/ or other levies. International banking business here refers to non-resident, foreign currency dominated, assets and liabilities.   

There are several geographic regions in which offshore centres are located. It comprises, among others, the Bahamas, the Cayman Islands, the Netherlands Antilles and Panama. There are twenty one such centres including the Bahamas, Hong Kong, Jersey, Luxemburg, Panama and Singapore. This number has increased now. It may be noted that the distinction between major international financial centres, such as, London, and offshore financial centres has been further blurred by the international deregulation of the 1980s.

Offshore banks may be created by the corporate group to handle external borrowing or to consolidate intra-group finance or banking transactions. Corporations involved in international trade may use an offshore bank as a foreign or multi-currency management centre.



Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

66

MBA Discussion Forum / The concept of offshore Banking

« on: June 04, 2013, 02:12:57 PM »

The concept of offshore Banking

The term offshore banking has been defined in a variety of ways and its meaning has changed over time. It its broadest connotation offshore banking implies some tax privileges, freedom from exchange controls and absence or at least a reduced level of supervision and regulation. It involves foreign currencies and transactions are conducted between non-residents. In other words, offshore banking is carried out in any foreign currency by banks that are domiciled in specifically designated centres with customers that are non-residents of these centres.

Offshore banking may also be described as the carrying on of banking and financial activities in an environment which is essentially free of financial and exchange controls i.e., tax havens or low tax areas commonly referred to as ‘ Offshore Finance Centres ’. These conditions also normally include favorable banking regulations and banking laws considerably less stringent than those in most domestic jurisdictions.

An offshore centre may also be defined as a place, which could be a country, an area or a city, which has made a deliberate attempt to attract international banking business by reducing or eliminating restrictions upon operations as well as by lowering taxes/ or other levies. International banking business here refers to non-resident, foreign currency dominated, assets and liabilities.   

There are several geographic regions in which offshore centres are located. It comprises, among others, the Bahamas, the Cayman Islands, the Netherlands Antilles and Panama. There are twenty one such centres including the Bahamas, Hong Kong, Jersey, Luxemburg, Panama and Singapore. This number has increased now. It may be noted that the distinction between major international financial centres, such as, London, and offshore financial centres has been further blurred by the international deregulation of the 1980s.

Offshore banks may be created by the corporate group to handle external borrowing or to consolidate intra-group finance or banking transactions. Corporations involved in international trade may use an offshore bank as a foreign or multi-currency management centre.



Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

67

BBA Discussion Forum / The concept of offshore Banking

« on: June 04, 2013, 02:10:44 PM »

The concept of offshore Banking

The term offshore banking has been defined in a variety of ways and its meaning has changed over time. It its broadest connotation offshore banking implies some tax privileges, freedom from exchange controls and absence or at least a reduced level of supervision and regulation. It involves foreign currencies and transactions are conducted between non-residents. In other words, offshore banking is carried out in any foreign currency by banks that are domiciled in specifically designated centres with customers that are non-residents of these centres.

Offshore banking may also be described as the carrying on of banking and financial activities in an environment which is essentially free of financial and exchange controls i.e., tax havens or low tax areas commonly referred to as ‘ Offshore Finance Centres ’. These conditions also normally include favorable banking regulations and banking laws considerably less stringent than those in most domestic jurisdictions.

An offshore centre may also be defined as a place, which could be a country, an area or a city, which has made a deliberate attempt to attract international banking business by reducing or eliminating restrictions upon operations as well as by lowering taxes/ or other levies. International banking business here refers to non-resident, foreign currency dominated, assets and liabilities.   

There are several geographic regions in which offshore centres are located. It comprises, among others, the Bahamas, the Cayman Islands, the Netherlands Antilles and Panama. There are twenty one such centres including the Bahamas, Hong Kong, Jersey, Luxemburg, Panama and Singapore. This number has increased now. It may be noted that the distinction between major international financial centres, such as, London, and offshore financial centres has been further blurred by the international deregulation of the 1980s.

Offshore banks may be created by the corporate group to handle external borrowing or to consolidate intra-group finance or banking transactions. Corporations involved in international trade may use an offshore bank as a foreign or multi-currency management centre.



Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

68

MBA Discussion Forum / Electronic Commerce

« on: May 30, 2013, 03:08:08 PM »

Electronic Commerce

Electronic commerce refers to paperless exchange of business information between organizations and individuals and extends to any form of buying and selling by consumers and companies over a computer network. E-commerce uses information technology to improve relationship between partners. It is opening up new business possibilities and with the outreach of the internet; it is expected to lead to paradigm shift in the dynamics of business and banking. It allows people to transcend the barriers of time and distance and take advantages of global markets and opportunities. Thus an e-commerce via information highway represents a strategic window of opportunity to promote job creation and entrepreneurship and opening up a new world of possibility and progress.

E-commerce minimizes transaction costs by reducing the intermediation of third parties in putting through transactions. Transaction time is also reduced as the transactions are conducted electronically. As e-commerce lowers transaction costs, business efficiency also improves. E-commerce allows electronic sharing of data between and within organization which can result in an improvements of products as well as process. This leads to an increase in business efficiency. Customers can access services such as banking, insurance and travel reservations without stepping out of their homes or offices. Such technological advances involving e-commerce facilitates the developments of new electronic markets.

Banks are an integral part of the value chain in retail and service industries. It is the banks which enables transactions to take place by processing the exchange of money. However, the very nature of retailing is beginning to change with the advent of ‘virtual’ shopping based on distribution of services via multimedia electronic networks.

The concept of home shopping has proved particularly successful. Catalogue shopping has long been established, mainly due to the great distance between customers and retail outlets. In the recent years TV based home shopping with orders being taken over phone has become big business in the U.S.

However, while TV home shopping gives the potential buyer the chance to see the product, it is still a sequential service. Catalogues give buyers more information and random access, but they lack the ability to really show off the goods.

A new approach is to provide goods, and specially services, via multimedia computer networks. These services can be used to give customers direct access to manufacturers and service provider alike. Products can be investigated and orders can be taken via the same system. Unlike home shopping, these new computer based systems, offer access to services as well as manufactured goods. It is the addition of the services, such as banking services, which seem to have been the key factor in attracting users. The basic delivery channels include:

1.   Internet
2.   Private access networks
3.   Interactive TV
4.   Modem to modem banking

E-commerce, among other things, process secure payment through automated financing, banking and account inquiries. It refers to the use of computers and electronic networks to conduct business over the internet or another electronic network.

E-commerce is regarded in the United States, Europe, Japan and some of the newly industrializing countries as a prerequisite for the conduct of business in the knowledge societies of the future. Countries that do not implement electronic business networks will almost certainly find themselves disadvantaged in the conduct of trade and in their financial affairs.




E-shopping practice in the context of Bangladesh
According to the findings of Md. Kabirul Islam & Md. Fokhray Hossain on Online vs. Traditional Shopping in Bangladesh:

•   More than half a dozen business to consumer (B2C) websites are running business to sell products online and organize home delivery in Dhaka city and some selected district headquarters in Bangladesh. Although, it is pleasing, online store in Bangladesh appears uncomplicated to go through the websites and place order for buying.
•   Online shopping is more expensive for the customers.
•   The concept of online shopping is not that much popular yet in Bangladesh because customers are very much used to traditional shopping.

 
Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

69

BBA Discussion Forum / Electronic Commerce

« on: May 30, 2013, 03:07:50 PM »

Electronic Commerce

Electronic commerce refers to paperless exchange of business information between organizations and individuals and extends to any form of buying and selling by consumers and companies over a computer network. E-commerce uses information technology to improve relationship between partners. It is opening up new business possibilities and with the outreach of the internet; it is expected to lead to paradigm shift in the dynamics of business and banking. It allows people to transcend the barriers of time and distance and take advantages of global markets and opportunities. Thus an e-commerce via information highway represents a strategic window of opportunity to promote job creation and entrepreneurship and opening up a new world of possibility and progress.

E-commerce minimizes transaction costs by reducing the intermediation of third parties in putting through transactions. Transaction time is also reduced as the transactions are conducted electronically. As e-commerce lowers transaction costs, business efficiency also improves. E-commerce allows electronic sharing of data between and within organization which can result in an improvements of products as well as process. This leads to an increase in business efficiency. Customers can access services such as banking, insurance and travel reservations without stepping out of their homes or offices. Such technological advances involving e-commerce facilitates the developments of new electronic markets.

Banks are an integral part of the value chain in retail and service industries. It is the banks which enables transactions to take place by processing the exchange of money. However, the very nature of retailing is beginning to change with the advent of ‘virtual’ shopping based on distribution of services via multimedia electronic networks.

The concept of home shopping has proved particularly successful. Catalogue shopping has long been established, mainly due to the great distance between customers and retail outlets. In the recent years TV based home shopping with orders being taken over phone has become big business in the U.S.

However, while TV home shopping gives the potential buyer the chance to see the product, it is still a sequential service. Catalogues give buyers more information and random access, but they lack the ability to really show off the goods.

A new approach is to provide goods, and specially services, via multimedia computer networks. These services can be used to give customers direct access to manufacturers and service provider alike. Products can be investigated and orders can be taken via the same system. Unlike home shopping, these new computer based systems, offer access to services as well as manufactured goods. It is the addition of the services, such as banking services, which seem to have been the key factor in attracting users. The basic delivery channels include:

1.   Internet
2.   Private access networks
3.   Interactive TV
4.   Modem to modem banking

E-commerce, among other things, process secure payment through automated financing, banking and account inquiries. It refers to the use of computers and electronic networks to conduct business over the internet or another electronic network.

E-commerce is regarded in the United States, Europe, Japan and some of the newly industrializing countries as a prerequisite for the conduct of business in the knowledge societies of the future. Countries that do not implement electronic business networks will almost certainly find themselves disadvantaged in the conduct of trade and in their financial affairs.




E-shopping practice in the context of Bangladesh
According to the findings of Md. Kabirul Islam & Md. Fokhray Hossain on Online vs. Traditional Shopping in Bangladesh:

•   More than half a dozen business to consumer (B2C) websites are running business to sell products online and organize home delivery in Dhaka city and some selected district headquarters in Bangladesh. Although, it is pleasing, online store in Bangladesh appears uncomplicated to go through the websites and place order for buying.
•   Online shopping is more expensive for the customers.
•   The concept of online shopping is not that much popular yet in Bangladesh because customers are very much used to traditional shopping.

 
Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

70

Real Estate / Electronic Commerce

« on: May 30, 2013, 03:07:25 PM »

Electronic Commerce

Electronic commerce refers to paperless exchange of business information between organizations and individuals and extends to any form of buying and selling by consumers and companies over a computer network. E-commerce uses information technology to improve relationship between partners. It is opening up new business possibilities and with the outreach of the internet; it is expected to lead to paradigm shift in the dynamics of business and banking. It allows people to transcend the barriers of time and distance and take advantages of global markets and opportunities. Thus an e-commerce via information highway represents a strategic window of opportunity to promote job creation and entrepreneurship and opening up a new world of possibility and progress.

E-commerce minimizes transaction costs by reducing the intermediation of third parties in putting through transactions. Transaction time is also reduced as the transactions are conducted electronically. As e-commerce lowers transaction costs, business efficiency also improves. E-commerce allows electronic sharing of data between and within organization which can result in an improvements of products as well as process. This leads to an increase in business efficiency. Customers can access services such as banking, insurance and travel reservations without stepping out of their homes or offices. Such technological advances involving e-commerce facilitates the developments of new electronic markets.

Banks are an integral part of the value chain in retail and service industries. It is the banks which enables transactions to take place by processing the exchange of money. However, the very nature of retailing is beginning to change with the advent of ‘virtual’ shopping based on distribution of services via multimedia electronic networks.

The concept of home shopping has proved particularly successful. Catalogue shopping has long been established, mainly due to the great distance between customers and retail outlets. In the recent years TV based home shopping with orders being taken over phone has become big business in the U.S.

However, while TV home shopping gives the potential buyer the chance to see the product, it is still a sequential service. Catalogues give buyers more information and random access, but they lack the ability to really show off the goods.

A new approach is to provide goods, and specially services, via multimedia computer networks. These services can be used to give customers direct access to manufacturers and service provider alike. Products can be investigated and orders can be taken via the same system. Unlike home shopping, these new computer based systems, offer access to services as well as manufactured goods. It is the addition of the services, such as banking services, which seem to have been the key factor in attracting users. The basic delivery channels include:

1.   Internet
2.   Private access networks
3.   Interactive TV
4.   Modem to modem banking

E-commerce, among other things, process secure payment through automated financing, banking and account inquiries. It refers to the use of computers and electronic networks to conduct business over the internet or another electronic network.

E-commerce is regarded in the United States, Europe, Japan and some of the newly industrializing countries as a prerequisite for the conduct of business in the knowledge societies of the future. Countries that do not implement electronic business networks will almost certainly find themselves disadvantaged in the conduct of trade and in their financial affairs.




E-shopping practice in the context of Bangladesh
According to the findings of Md. Kabirul Islam & Md. Fokhray Hossain on Online vs. Traditional Shopping in Bangladesh:

•   More than half a dozen business to consumer (B2C) websites are running business to sell products online and organize home delivery in Dhaka city and some selected district headquarters in Bangladesh. Although, it is pleasing, online store in Bangladesh appears uncomplicated to go through the websites and place order for buying.
•   Online shopping is more expensive for the customers.
•   The concept of online shopping is not that much popular yet in Bangladesh because customers are very much used to traditional shopping.

 
Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

71

Faculty Forum / Electronic Commerce

« on: May 30, 2013, 03:06:37 PM »

Electronic Commerce

Electronic commerce refers to paperless exchange of business information between organizations and individuals and extends to any form of buying and selling by consumers and companies over a computer network. E-commerce uses information technology to improve relationship between partners. It is opening up new business possibilities and with the outreach of the internet; it is expected to lead to paradigm shift in the dynamics of business and banking. It allows people to transcend the barriers of time and distance and take advantages of global markets and opportunities. Thus an e-commerce via information highway represents a strategic window of opportunity to promote job creation and entrepreneurship and opening up a new world of possibility and progress.

E-commerce minimizes transaction costs by reducing the intermediation of third parties in putting through transactions. Transaction time is also reduced as the transactions are conducted electronically. As e-commerce lowers transaction costs, business efficiency also improves. E-commerce allows electronic sharing of data between and within organization which can result in an improvements of products as well as process. This leads to an increase in business efficiency. Customers can access services such as banking, insurance and travel reservations without stepping out of their homes or offices. Such technological advances involving e-commerce facilitates the developments of new electronic markets.

Banks are an integral part of the value chain in retail and service industries. It is the banks which enables transactions to take place by processing the exchange of money. However, the very nature of retailing is beginning to change with the advent of ‘virtual’ shopping based on distribution of services via multimedia electronic networks.

The concept of home shopping has proved particularly successful. Catalogue shopping has long been established, mainly due to the great distance between customers and retail outlets. In the recent years TV based home shopping with orders being taken over phone has become big business in the U.S.

However, while TV home shopping gives the potential buyer the chance to see the product, it is still a sequential service. Catalogues give buyers more information and random access, but they lack the ability to really show off the goods.

A new approach is to provide goods, and specially services, via multimedia computer networks. These services can be used to give customers direct access to manufacturers and service provider alike. Products can be investigated and orders can be taken via the same system. Unlike home shopping, these new computer based systems, offer access to services as well as manufactured goods. It is the addition of the services, such as banking services, which seem to have been the key factor in attracting users. The basic delivery channels include:

1.   Internet
2.   Private access networks
3.   Interactive TV
4.   Modem to modem banking

E-commerce, among other things, process secure payment through automated financing, banking and account inquiries. It refers to the use of computers and electronic networks to conduct business over the internet or another electronic network.

E-commerce is regarded in the United States, Europe, Japan and some of the newly industrializing countries as a prerequisite for the conduct of business in the knowledge societies of the future. Countries that do not implement electronic business networks will almost certainly find themselves disadvantaged in the conduct of trade and in their financial affairs.




E-shopping practice in the context of Bangladesh
According to the findings of Md. Kabirul Islam & Md. Fokhray Hossain on Online vs. Traditional Shopping in Bangladesh:

•   More than half a dozen business to consumer (B2C) websites are running business to sell products online and organize home delivery in Dhaka city and some selected district headquarters in Bangladesh. Although, it is pleasing, online store in Bangladesh appears uncomplicated to go through the websites and place order for buying.
•   Online shopping is more expensive for the customers.
•   The concept of online shopping is not that much popular yet in Bangladesh because customers are very much used to traditional shopping.

 
Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

72

Faculty Sections / Electronic Commerce

« on: May 30, 2013, 03:06:22 PM »

Electronic Commerce

Electronic commerce refers to paperless exchange of business information between organizations and individuals and extends to any form of buying and selling by consumers and companies over a computer network. E-commerce uses information technology to improve relationship between partners. It is opening up new business possibilities and with the outreach of the internet; it is expected to lead to paradigm shift in the dynamics of business and banking. It allows people to transcend the barriers of time and distance and take advantages of global markets and opportunities. Thus an e-commerce via information highway represents a strategic window of opportunity to promote job creation and entrepreneurship and opening up a new world of possibility and progress.

E-commerce minimizes transaction costs by reducing the intermediation of third parties in putting through transactions. Transaction time is also reduced as the transactions are conducted electronically. As e-commerce lowers transaction costs, business efficiency also improves. E-commerce allows electronic sharing of data between and within organization which can result in an improvements of products as well as process. This leads to an increase in business efficiency. Customers can access services such as banking, insurance and travel reservations without stepping out of their homes or offices. Such technological advances involving e-commerce facilitates the developments of new electronic markets.

Banks are an integral part of the value chain in retail and service industries. It is the banks which enables transactions to take place by processing the exchange of money. However, the very nature of retailing is beginning to change with the advent of ‘virtual’ shopping based on distribution of services via multimedia electronic networks.

The concept of home shopping has proved particularly successful. Catalogue shopping has long been established, mainly due to the great distance between customers and retail outlets. In the recent years TV based home shopping with orders being taken over phone has become big business in the U.S.

However, while TV home shopping gives the potential buyer the chance to see the product, it is still a sequential service. Catalogues give buyers more information and random access, but they lack the ability to really show off the goods.

A new approach is to provide goods, and specially services, via multimedia computer networks. These services can be used to give customers direct access to manufacturers and service provider alike. Products can be investigated and orders can be taken via the same system. Unlike home shopping, these new computer based systems, offer access to services as well as manufactured goods. It is the addition of the services, such as banking services, which seem to have been the key factor in attracting users. The basic delivery channels include:

1.   Internet
2.   Private access networks
3.   Interactive TV
4.   Modem to modem banking

E-commerce, among other things, process secure payment through automated financing, banking and account inquiries. It refers to the use of computers and electronic networks to conduct business over the internet or another electronic network.

E-commerce is regarded in the United States, Europe, Japan and some of the newly industrializing countries as a prerequisite for the conduct of business in the knowledge societies of the future. Countries that do not implement electronic business networks will almost certainly find themselves disadvantaged in the conduct of trade and in their financial affairs.




E-shopping practice in the context of Bangladesh
According to the findings of Md. Kabirul Islam & Md. Fokhray Hossain on Online vs. Traditional Shopping in Bangladesh:

•   More than half a dozen business to consumer (B2C) websites are running business to sell products online and organize home delivery in Dhaka city and some selected district headquarters in Bangladesh. Although, it is pleasing, online store in Bangladesh appears uncomplicated to go through the websites and place order for buying.
•   Online shopping is more expensive for the customers.
•   The concept of online shopping is not that much popular yet in Bangladesh because customers are very much used to traditional shopping.

 
Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

73

Real Estate / Electronic Banking

« on: May 30, 2013, 01:49:17 PM »

Electronic Banking
 
The growth of technology has changed the payment system world over during the past two decades. More and more innovations are being introduced in both cash payments systems and non-cash payment systems. With the introduction and implementation of recent technology in banking, electronic devices are making the job of cash payment as well as non-cash payment easy and efficient. For many customers, electronic banking means 24-hour access to cash through an Automated Teller Machine (ATM) or direct deposit of pay cheques into chequeing or saving accounts. But electronic banking now involves many different types of transactions.

The banks’ first use of computer was strictly a back office affair, transferring the accounting and record keeping activities from branch ledger onto centralized or decentralized computer systems. With rapid improvement of electronic technology and availability of higher computer power and faster communication technology, the demand for more efficient banking system has increased. This has resulted in more competition among banks and the introduction of electronic banking. Put in simple words, banking done electronically is Electronic Banking. Delivery of banks’ services to customer at his office or home can be termed as electronic banking.

Banking services are one of the key elements in establishing electronic media as a viable environment in which to carry out commercial activity. In many ways banking is already a virtual concept to most people. The routinely use their bank account to deposit wages and draw down on those wages without ever going into branch. While this presents the banks with a problem in establishing a close relationship with their customers, it presents ideal opportunities for electronic delivery. Indeed, the use of electronic delivery can potentially increase service levels and improve relationships with customers above current levels. The use of interactive electronic links to customers could go some way towards re-establishing links and providing the customers with greater levels of information about both their own financial situation and about the services offered by the bank. However, security in public access networks is vital to ensuring that customers will trust this form of banking.

Electronic banking also known as electronic fund transfer (EFT) uses computer and electronic technology as a substitute for cheques and other paper transactions. EETs are initiated through devices like cards or codes that let you, or those you authorize, access your account. Many financial institutions use ATM or debit cards and personal identification numbers (PINS) for this purpose. Some use other forms of debit cards such as those that require, at the most, your signature or a scan.

Electronic banking payments systems find that EFT offers several services which consumers may find practical. Technological innovations in banking primarily have been manifested in the form of electronic funds transfer systems (EFTS or EFT systems). The basic components of EFTS are:

•   Automated Clearing Houses (ACHs)
•   Automated Teller Machine (ATM)
•   Point-of-sale Terminals
•   Internet Banking

These EFT devices are complemented by e-money, specifically the credit, debit, smart and pay cards. ACHs and ATMs have been the success stories of EFTs or electronic banking.


Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

74

BBA Discussion Forum / Electronic Banking

« on: May 30, 2013, 01:48:49 PM »

Electronic Banking
 
The growth of technology has changed the payment system world over during the past two decades. More and more innovations are being introduced in both cash payments systems and non-cash payment systems. With the introduction and implementation of recent technology in banking, electronic devices are making the job of cash payment as well as non-cash payment easy and efficient. For many customers, electronic banking means 24-hour access to cash through an Automated Teller Machine (ATM) or direct deposit of pay cheques into chequeing or saving accounts. But electronic banking now involves many different types of transactions.

The banks’ first use of computer was strictly a back office affair, transferring the accounting and record keeping activities from branch ledger onto centralized or decentralized computer systems. With rapid improvement of electronic technology and availability of higher computer power and faster communication technology, the demand for more efficient banking system has increased. This has resulted in more competition among banks and the introduction of electronic banking. Put in simple words, banking done electronically is Electronic Banking. Delivery of banks’ services to customer at his office or home can be termed as electronic banking.

Banking services are one of the key elements in establishing electronic media as a viable environment in which to carry out commercial activity. In many ways banking is already a virtual concept to most people. The routinely use their bank account to deposit wages and draw down on those wages without ever going into branch. While this presents the banks with a problem in establishing a close relationship with their customers, it presents ideal opportunities for electronic delivery. Indeed, the use of electronic delivery can potentially increase service levels and improve relationships with customers above current levels. The use of interactive electronic links to customers could go some way towards re-establishing links and providing the customers with greater levels of information about both their own financial situation and about the services offered by the bank. However, security in public access networks is vital to ensuring that customers will trust this form of banking.

Electronic banking also known as electronic fund transfer (EFT) uses computer and electronic technology as a substitute for cheques and other paper transactions. EETs are initiated through devices like cards or codes that let you, or those you authorize, access your account. Many financial institutions use ATM or debit cards and personal identification numbers (PINS) for this purpose. Some use other forms of debit cards such as those that require, at the most, your signature or a scan.

Electronic banking payments systems find that EFT offers several services which consumers may find practical. Technological innovations in banking primarily have been manifested in the form of electronic funds transfer systems (EFTS or EFT systems). The basic components of EFTS are:

•   Automated Clearing Houses (ACHs)
•   Automated Teller Machine (ATM)
•   Point-of-sale Terminals
•   Internet Banking

These EFT devices are complemented by e-money, specifically the credit, debit, smart and pay cards. ACHs and ATMs have been the success stories of EFTs or electronic banking.


Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)

75

MBA Discussion Forum / Electronic Banking

« on: May 30, 2013, 01:48:36 PM »

Electronic Banking
 
The growth of technology has changed the payment system world over during the past two decades. More and more innovations are being introduced in both cash payments systems and non-cash payment systems. With the introduction and implementation of recent technology in banking, electronic devices are making the job of cash payment as well as non-cash payment easy and efficient. For many customers, electronic banking means 24-hour access to cash through an Automated Teller Machine (ATM) or direct deposit of pay cheques into chequeing or saving accounts. But electronic banking now involves many different types of transactions.

The banks’ first use of computer was strictly a back office affair, transferring the accounting and record keeping activities from branch ledger onto centralized or decentralized computer systems. With rapid improvement of electronic technology and availability of higher computer power and faster communication technology, the demand for more efficient banking system has increased. This has resulted in more competition among banks and the introduction of electronic banking. Put in simple words, banking done electronically is Electronic Banking. Delivery of banks’ services to customer at his office or home can be termed as electronic banking.

Banking services are one of the key elements in establishing electronic media as a viable environment in which to carry out commercial activity. In many ways banking is already a virtual concept to most people. The routinely use their bank account to deposit wages and draw down on those wages without ever going into branch. While this presents the banks with a problem in establishing a close relationship with their customers, it presents ideal opportunities for electronic delivery. Indeed, the use of electronic delivery can potentially increase service levels and improve relationships with customers above current levels. The use of interactive electronic links to customers could go some way towards re-establishing links and providing the customers with greater levels of information about both their own financial situation and about the services offered by the bank. However, security in public access networks is vital to ensuring that customers will trust this form of banking.

Electronic banking also known as electronic fund transfer (EFT) uses computer and electronic technology as a substitute for cheques and other paper transactions. EETs are initiated through devices like cards or codes that let you, or those you authorize, access your account. Many financial institutions use ATM or debit cards and personal identification numbers (PINS) for this purpose. Some use other forms of debit cards such as those that require, at the most, your signature or a scan.

Electronic banking payments systems find that EFT offers several services which consumers may find practical. Technological innovations in banking primarily have been manifested in the form of electronic funds transfer systems (EFTS or EFT systems). The basic components of EFTS are:

•   Automated Clearing Houses (ACHs)
•   Automated Teller Machine (ATM)
•   Point-of-sale Terminals
•   Internet Banking

These EFT devices are complemented by e-money, specifically the credit, debit, smart and pay cards. ACHs and ATMs have been the success stories of EFTs or electronic banking.


Professor Rafiqul Islam
Dean
Faculty of Business & Economics (FBE)