The Role of Banking Sector for Sustainable E-Commerce Management in Bangladesh

Information technology has been playing an important role in the future development of financial sectors and the way of doing business in a turn-up economy like Bangladesh. Smartphones or the other smart devices and the internet worth of our country are going to reduce the day by day and in the purchase of people, it is increasing the use of technology among us. Because of that. during recent years E-commerce has opened a new dimension in the history of shopping trends in Bangladesh. It has created a huge opportunity for both consumers and sellers. Now the whole world is in a challenging moment that is the coronavirus. So that's why we all have to stay at a safe distance for this pandemic. At this current moment, we are not going to go out to buy our daily necessities goods, and at the moment the online shopping system or E-commerce is working as a good platform. People will gradually become dependent on online shopping. So, to speak that Ecommerce is a boom in modern business. 

E-commerce means electronic commerce or business system. E-commerce platform business is a term for a business transaction that is performed via the internet. Using E-commerce consumers can exchange goods or services electronically without any hassle. We can also say that Ecommerce is the use of electronic communication and digital information processing technology in a business transaction to create, transformation and redefine relationships for value creation between or among organizations and between organizations and individuals. Nowadays, numerous numbers of sellers are selling their tangible and intangible goods through the E-commerce system. As we see, a transaction is needed for every commerce or trade, the role of banking sector for e-commerce management is very much significant in our country. 

Globalization has brought in many changes in the business scenario with the whole world inching towards one big market place. Communication between the buyers and sellers has become critical as each can select to explore a greater number of alternatives than ever before. E-commerce through Internet, e-mails, websites, and other facilities, enables a businessman to be linked with every corner of the world, and thus opens up greater opportunities in the world market. Another important factor is the time required for completing a business transaction. As markets are becoming competitive and information is more readily available, a quick, reliable and replicable transaction implies availing of prevailing opportunities. On the contrary, delays in processing a transaction might become synonymous to wasting an opportunity. Therefore, a fast and alternative mechanism of communication, contract, and payment is an integral part of a globally competitive business organization. How important or relevant is e-commerce to the economy of Bangladesh developing economy a in general and to the export market in particular? The Information Technology (IT) revolution has been too phenomenal to predict its future growth and its use in an economy like Bangladesh's. In the light of the recent spate of globalization and the initiation of the World Trade Organization (WTO), assessing the immediate and short or medium term relevance of e-commerce to Bangladesh becomes imperative.

There are three types of export financing in Bangladesh such as, pre-shipment financing in local currency by commercial banks; pre-shipment financing in foreign currency by commercial banks through the Export Development Fund (EDF); and back-to-back letter of credit (L/C) facilities. Exporters can access credit in local currency from private and nationalized commercial banks at a concessional rate determined by the Bangladesh Bank (BB). The Interest Rate Policy introduced in 1992, which liberalized interest rate ceilings for all categories of lending except to export, agriculture, and small and cottage industries, permitted individual banks to differentiate interest rates charged to individual borrowers. The interest rate bands for exports have been set in the range of 8 percent to 10 percent since 1994-95. Exporters can obtain export credit for up to 90 percent of the value of their irrevocable L/C or sales agreement for a maximum period of 180 days. The Export Development Fund (EDF), administered by the Bangladesh Bank (BB), provides pre-shipment financing for imports of necessary raw materials, spare parts, and packaging materials for exporters of nontraditional items. Like other export credits, the time limit for repayment is usually 180 days, extendable to 270 days in exceptional cases. 

In Bangladesh, electronic fund transfer is at an early stage and used on a very limited scale. Electronic banking, which is highly dependent on the application of IT, has been pioneered by the foreign commercial banks. The local banks are yet to be fully automated. Most local banks use computers on a stand-alone basis. The extent of computerization in the local banks is limited to database management and electronic communication (through e-mails) only. A few foreign commercial banks and local banks are offering on-line banking facilities in the form of Automated Teller Machines (ATM) and local credit cards. Also, the banks now offering ATM facilities have formed a common ATM pool. Under this system, a customer of any bank in the pool can receive the services using the same ATM. 

An off-line computerized reconciliation and data management system has been implemented by the Central Bank of Bangladesh (Bangladesh Bank). However, a network system between Bangladesh Bank and the commercial banks is yet to be developed. On-line fund transfer between banks and between banks and other institutions are yet to be introduced. The development of electronic banking within the country as well as outside the country is saddled with various infrastructural, institutional and regulatory constraints. A selected list of these constraints is provided below: Lack of network infrastructure of commercial banks

• Absence of a centralized clearing system of the Central Bank 
• Absence of EFT legislation 
• Exchange controls are too restrictive to promote e-commerce 
• Absence of a need based business plan for on-line banking 
• Inadequate qualified manpower to set up and maintain the network 

The Central Bank's main concern against issuance of international credit cards is flight of capital from Bangladesh. However, the Central Bank has no objection on issuance of a generally accepted credit card, which will be honored by all commercial banks for local use only. Lack of internationally accepted credit card facilities deprives genuine businessmen from initiating businesses or making international transactions smoothly. Furthermore, it also sends wrong signals to their foreign counterparts about the inability of Bangladeshi businessmen to make speedy payments through international credit cards. The concern for abuse of credit cards for transfer of capital is weak since all credit cards have a maximum credit limit. As per the above discussion it can be said that, though the banking sectors have some limitations, they have important contribution to the e-commerce and e-payment or e-transaction and we strongly can say that they have also some important role on management of ecommerce in our country. They can make some ways of secured payment system for both the companies and customers. 

The followings are some of the recommendations that will ensure the smooth functioning as well as the widespread use of e-commerce management in Bangladesh. 

• Bangladeshi e-commerce sites should provide greater layers of security for their payment procedures. 
• Upper level business courses in different disciplines such as e.g. accounting, marketing, finance. management; economics should be modified by integrating e-commerce topics. 
• The government should provide the necessary support to e-CAB (E-commerce Association of Bangladesh) so more people can be trained in this sector. 
• E-commerce businesses require high-speed internet, which is still absent. It must ensure low- cost, high-speed internet for rural people to turn its vision of Digital Bangladesh into reality. 
• Bangladeshi e-commerce sites should focus more on timely deliveries.
• Bangladeshi e-commerce sites should not only update and evolve, but also address the growing concerns like managing increased visits and purchases during the holidays, payment methods. Effective IT security system should maintain by adopting latest IT technology. 
• Bangladeshi e-commerce sites should aim to improve customer service and address areas of concern to reach out to the part of the population which is not opting for e-commerce yet. 
• Fashion and electronic products are currently dominating the e-marketplace; products of e- marketplace should be diversified. 
• To penetrate into the global market, the government has to reform its regulations regarding online transactions and upgrade the entire system. 
• The Bangladesh Bank should formulate policies to ease the loan process for e-commerce entrepreneurs 
• It is important for Bangladesh to update the ICT law relating to e-commerce. It should be done focusing on international practices. 

And for these the banking sector especially central bank can play a very significant role in sustainable management of e-commerce in Bangladesh by implementing or by helping or by consulting the proper authority to implements above mentioned recommendations as per need basis.