Effect of E-Banking on the Performance of Commercial Banks: A Case Study on Selected Banks of Bangladesh.

Abstract

In this present world, we are always interacting with Information & Technologies and always trying to keep pace with using new & newer Information & Technologies (IT) and IT related devices. E-Banking is one of the parts to become a digital Bangladesh and also it is being tried to adapt this in various organizations. As apparently, it can be assumed that the adaptation of E-Banking can produce good results for the organizations. This paper is a result of survey on the impact of E-Banking on the performance of commercial banks, particularly some banks in Dinajpur area. Continuous technological development, particularly information technology revolution of the decades has forced the banks to introduce the E-Banking operations for their sustainable growth in expanded competitive environment. E-Banking has made financial transactions easier for the participants and has introduced wide range of financial products and services. The main focus of this research is to present the scenario, prospects & the impact of E-Banking on the performance of commercial banks. The study is descriptive in nature and data were gathered both through direct observation and reaching at the websites of different banks, conversation with bankers and interview by structured questionnaires through random sampling technique with current customers of different banks. To measure operating performance, I have analyzed questionnaire data from respondents those are primary in nature. It indicates that operating performance of the banks is much more satisfied due to E-Banking systems. Again, ROE, ROCE and ROA are also calculated to measure financial performance with specified formulas data from annual reports. The result of this measurement shows that E-Banking has a negative effect on the performance of the commercial banks. Primary data analysis has produced commendable effect on the performance of banks. But secondary data analyses have provided the result that is after adaptation of E-Banking, Banking performance has been declined. And for this, only EBanking system is not liable. As we are in primary stage of adaptation process and our people are not well accustomed with the system that occur increase in operating expenses or more investment that didn’t provide required return. Again political instability and also the effect of economic slowdown may cause for this result. If everything remains better, we hope this system may provide a good result in near future. The study also highlights some constraints and steps of overcoming those constraints of E-Banking in banking sector of Bangladesh.