Maintenance of Accounting Information System at Private Banking Sector in Bangladesh
Subject: Accounting | Topics:

Background of the study:

The EAP program is an essential part of Masters of Business Administration (MBA). As a student of EAP, it is required to work in a selected institution to enhance ones practical knowledge and experiences. For the requirement of my course I was assigned to work on Private Banking Sector. In this situation I was assigned to prepare report on “A study on the Maintenance of Accounting Information System at Private Banking Sectors in Bangladesh”

Significance  of the study:

For any Masters of Business Administration (MBA) student only curriculum activities is not enough for handling the real life business situation. EAP program is the perfect blend of the theoretical and the practical life experience. Whole the report has described the different terms that is related to the AIS and the detail scenario of the different private banking performances.

 Scope of the study:

The study has been conducted into two steps. In the first step, the concept, use, principles etc. of AIS on Private Banking Sector have been studied. In the second part the opinion of the internal users has been collected.

Objectives of the study:

General objective:

  • The prime objective of this report is to analyze the “A study on the Maintenance of Accounting Information System At Private Banking Sectors in Bangladesh”

Specific objectives:

  1. To conceptualized AIS at Private Banking Sectors.
  2. To know about the system mainly Private Banking Sectors follow in the operation of AIS.
  3. To identify the computer based transactions in Private Banking Sectors
  4. To classify the software at Private Bank use in their operation.
  5. To be acquainted with the main software they use for maintaining AIS.
  6. To know about the web-base transaction system they use.
  7. To identify how they process clients data.
  8. To know about their internal controlling techniques.
  9. To be familiar with their reporting system.
  10.  To recognize how they maintain the principle of AIS.
  11. To identify the opinion of internal users of AIS in Private Banking Sectors.
  12. To identify the problems in the AIS, if any.
  13. To recommend a guideline for improving AIS practices in Private Banking Sectors.

Methodology of the study:

Methods followed to perform a job or conducting activities to complete a task is called methodology. In conducting this study the following methodology was adopted in collecting data & information, preparation of reports etc. The methodology of report is given below:

Research Type:

This is a qualitative & descriptive research; which briefly explain the accounting information system in Private banking sector in Bangladesh.

Sources of Data:

To prepare this report all the necessary information collected from both primary and secondary sources of data.

i.            Primary sources of data:

For preparing this report, data was collected from different primary sources. Different questions asked to IT officer and FAD officer to collect the required data. Those data are collected through face to conversation and observation.

ii.            Secondary sources of data:

Secondary sources of data are of two kinds:

  • Internal: Annual Reports of all private banks, Other published documents of the bank, banks Website.
  • External: Books, Articles and Website.

Data Collection Procedure:

Data collection procedures are conducted into two categories. Here in below we described all of those procedures of data collection.

i.        Primary Data Collection Procedure:

Primary Data are collected from the AIS and IT department. I collect those data through an informal questionnaire. Different people from FAD & IT department and Branch were asked for their opinion about Software, Organizational structure and some more information about the overall system. I use different method for gathering primary data like observation method, face to face discussion method and questionnaire survey.

ii.      Secondary Data Collection Procedure:

Secondary Data can be found inside the company, on the internet, any published book for external user. For this report I collect secondary data from internet, book and Journals.

Sampling Plan:

                      i.            Target Population: For the questionnaire target population was the internal user of AIS in local branch and for observation and face to face discussion target population was the employee of FAD & IT departments.

                    ii.            Sample Size: 17.

                  iii.            Sampling Method: Non-probability convenience method.

                   iv.            Sample Frame:  No structured sampling frame was used.

Data Analysis & Reporting:

This report has been prepared after visiting 17 banks. All the secondary data are attached in appendix part. Different types of computer software’s are used to analyze collected data such as- Microsoft Word2007, Microsoft Excel2007, and the frequency analysis are done through IBM SPSSv20.0.

 Limitation of the study:

Though I have given utmost effort to prepare this paper but there are some limitations of the study. Such are as follows-

  • Since the bank personnel were very busy on their personal activities, they could not provide enough time to me to discus my subject broadly.
  • Lack of opportunity to visit IT & FAD department more than one time.
  • The website of banks are not that much rich with data.
  • The main constrain of the study was in sufficiency of information, which was required for the study. There are various information the bank employee can’t provide due to security and other corporate obligations.
  • Due to time limitation many of the aspects could not be discussed in the present report. Learning all about within just 3 week is really tough.
  • Some information that are skipped by the respondent.
  • We have some error while analyzing the data and preparing the report.

Despite of these limitations, I have tried my best to prepare the report.

 Overview of Private Banks in Bangladesh

17 chosen banks description are given in below. All the banks was visited for collecting the primary data.

Shahjalal Islami Bank Limited
Shahjalal Islami Bank commenced its operation as a commercial bank on 10 May, 2001 under the Bank Companies Act, 1991. SJIBL started functioning with a vision to develop itself as a unique Islami bank of the country with all modern services and products available for the clients.
Sonali Bank Limited
After liberation of Bangladesh in 1971, Premier Bank and Bank of Bahawalpur were merged into Sonali Bank. The bank was nationalized under Government order P.O.26, 1972.This bank was transformed into a Public Limited Company under 100% ownership of Government and started functioning as Sonali Bank Limited on 15 November, 2007.
United commercial Bank Limited
Some leading personalities from industry and business of the country got together in early eighties of the last century to build up a commercial bank. The result was one of the first generation private sector banks of the country. Thus United commercial Bank Limited (UCBL) came into reality and GOB was kind enough to participate as a share holder of it. UCBL started operating as a commercial bank in 1983.
Trust Bank Limited
In the year 1999 Trust Bank Limited emerged as a private commercial bank in the banking arena of Bangladesh with a vision to meet customers’ expectations to a bank. It announced its mission to make banking easy for its clients. That is why it started one-stop service for the clients. As a part of the mission it supports the community it works in, to develop entrepreneurship and thus to help national economic growth.
Standard Chartered Bank
It emphasized on consumer, corporate and institutional banking and also the treasury services. Considering the experience of ANZ Grindlays Bank started its operation here in Bangladesh in 1905 and first branch was established at Chittagong in 1948.
IFIC Bank started functioning as a finance company in 1976. It was formed as a joint venture between the Government of Bangladesh and several farsighted sponsors from private sector. As GOB relaxed rules and allowed private sector to establish banks in 1983, IFIC was transformed into a commercial bank.
First Security Islami Bank Limited
First Security Islami Bank Ltd. was started functioning as a commercial bank from its first branch on 25 October, 1999. The bank It started its journey with a vision to develop itself as a modern Islamic bank and to make effective contribution in national economic.
The Hongkong and Shanghai banking Corporation
The Hongkong and Shanghai banking Corporation (HSBC) started its financial activities in Bangladesh with a debutant branch in 1996. Now in 2011 it’s at your neighborhood through 13 offices.
Export Import Bank of Bangladesh Limited
Export Import Bank of Bangladesh Limited got in the financial market of the country in the year 1999. Exim Bank started functioning as a commercial bank and on July, 2004 it switched over from conventional banking to a Shariah based Islami Banking system.
Eastern Bank Limited
Eastern Bank Ltd. came into reality in the new democratic environment of Bangladesh with a vision to create a brand in financial arena of the country. Being established in 1992 EBL has proved itself as one of the most valuable financial institutions in the mean time.
Dutch-Bangla Bank Limited
Dutch-Bangla Bank Limited (DBBL) is a public limited company under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. In June 1996, DBBL started its formal operation in banking sector.
Dhaka Bank Limited
Dhaka Bank Ltd. was registered as a public limited company in the year 1995 and it started functioning as a commercial bank on 5 July, 1995. The bank opened its business with an authorized capital of Tk. 1000 million and a paid up capital of Tk. 100 million.
City Bank Limited
City Bank is one of the oldest private Commercial Banks operating in Bangladesh. The Bank started its journey on 27th March 1983 through opening its first branch at Dhaka city. It was the visionary entrepreneurship of around 13 local businessmen who braved the immense uncertainties and risks with courage and zeal that made the establishment & forward march of the bank possible.
BRAC Bank Limited
With the vision of “Building profitable and socially responsible financial institution focused on Market and Business with Growth potential, thereby assisting BRAC and stakeholders to build a just, enlightened, healthy democratic and poverty free Bangladesh”. BRAC Bank has received the commercial banking license from Bangladesh Bank in 2001.
Basic Bank Limited
Basic Bank Limited (Bangladesh Small Industries and Commerce Bank Limited) came into operation on 21 January, 1989. Basic Bank was established with a vision to extend financial support for the hundreds of thousands of small and cottage industries of the country.
Bank Asia Limited
With a vision to make a poverty free Bangladesh, some distinguished entrepreneurs of the country decided to establish a commercial bank. The result was Bank Asia Limited. It was the 27th day of November, 1999 when the bank started to function. As a commercial bank it announced its mission to provide technology based, innovative, and quality services for the clients at a minimum cost.
AB Bank Limited
AB Bank Limited is the pioneer in commercial banking under private ownership in Bangladesh. It started functioning as Arab Bangladesh Bank Ltd. on 12 April, 1982. ‘To be the trendsetter for innovative banking with excellence and perfection’ was pronounced as the banks vision. Side by side it spoke out about its mission, ‘To be the best performing bank in the country’. Since inception AB Bank Limited has spread over the country through 82 branches at all economically potential locations.

Common Mission of Private Banks in Bangladesh                

All private banks want to become one of the leading Banks in Bangladesh by prudence, flair and quality of operations in their banking sector. All banks have some mission to achieve the organizational goals. Some common of them are as follows as:

       To provide quality services to customers.

       To set high standards of integrity.

       To make quality investment.

       To ensure sustainable growth in business.

       To ensure maximization of Shareholders’ wealth.

       To extend our customers innovative services acquiring state-of-the-art technology blended with Islamic principles.

       To ensure human resource development to meet the challenges of the time.

Common Vision of Private Banks in Bangladesh                  

To be the unique modern bank in Bangladesh and to make significant contribution to the national economy and enhance customers’ trust & wealth, quality investment, employees’ value and rapid growth in shareholders’ equity.

 Common Goals of Private Banks in Bangladesh                   

Banks will be the absolute market leader in the number of loans given to small and medium sized enterprises throughout Bangladesh. They will be a world-class organization in terms of their service quality and establishing relationships that help its customers to develop and grow successfully. They want to be the Bank of choice both for its employees and its customers, the model bank in this part of the world.

 Common Principal Activities of Private Banks in Bangladesh

The common principal activities of  the banks is to provide all kinds of commercial banking products and services to the customers including deposits taking, cash withdrawal, extending investments to corporate organization, retail and small & medium enterprises, trade financing, project finance, working capital finance, lease and hire purchase financing, issuance of Debit card. there vision is to be the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability.

Common Strategies of Private Banks in Bangladesh

The strategies of Private Banks in Bangladesh include:

       To strive for customers best satisfaction & earn their confidence.

       To manage & operate the Bank in the most effective manner.

       To identify customer’s needs & monitor their perception towards meeting those requirements.

       To review & updates policies, procedures & practices to enhance the ability to extend better services to the customers.

       To train & develop all employees & provide them adequate resources so that the customers’ needs are reasonably addressed.

       To cultivate a congenial working environment.

       To diversify portfolio both the retail & wholesale markets.

Common Departmental Structure of Private Banks in Bangladesh

All branches of Private Banks in Bangladesh are divided into three departments. Those are defining below with their activities and procedures…

  Department of General Banking

  Department of Investment

  Department of Foreign Exchange

General Banking Department:

General banking department is one of the most important departments of all private Bank. Basically banks provides the main services to the customer through this department. In general this section has some common services for customers that are given below.

       Account Opening

       Issuance of Cheque

       Receiving Cheques for Clearing, Transport, and Dispatch

       Issuance of PO (Pay Order), DD (Demand Draft), etc.

       Opening and Maintaining of MTDR and other Scheme Deposits

       Fund Transfer

Investment Department:

Banking business consists of borrowing and lending. Bank acts as an intermediary between surplus and deficit economic units. Thus a banker is a dealer in money and credit. Banks accept deposit from large number of customers and then lend a major portion of the accumulated money to those who wish to borrow. In this process banks secure reasonable return to the savers, make funds available to the borrowers at a cost and earn a profit after covering the cost of funds. For maintaining this mechanism, they do some activities those are given in below.

       Prepare the application form to provide loan

       Preparing Refund  Statements

       Preparing Investment Proposal and Statement

Foreign Exchange Department

In this department the job were more-or-less based on document verification by getting true and perfect information. The authorized person just changes the numbers & other required things from the format and prepares documents for the customers. The foreign exchange department consists of three sections. They are:

  Import section

  Export section

  Foreign remittance section    

Task of this Division:

       Issue L/C.

       L/C Advising & Conforming.

       L/C Collection & Negotiating.

Here, we also show the department of Corporate office

 Products & Services of Private Banks in Bangladesh

Bank is a service base institution but it has some products which generate profit for them. Here some name of products and services of Private Banks are given below.

Deposits & Investment Scheme of Private Banks

Deposit& Investment is the “life- blood” of a bank. Bank has given utmost importance in mobilization of deposit. SJIBL introduce many Islamic deposit schemes for their clients. On the other hand investment generates the profit for the bank that’s why those two things are most important activities of the bank. Some different types of scheme are given in below.

Computerized services of Private Banks

All Banks are computerized and provides the following services some of these services will be introduced soon. They introduced a few schemes, which are very popular:

  1. Online services (cash transfer )
  2. Any Branch Banking
  3. ATM Services 
  4. Signature Verification

Customer Services of Private Banks

Private Banks provides some types of customer service, those are described in below.

    1. VISA Card
    2. SMS Service (Western union & Swift Service)

 Management system among the Private Banks in Bangladesh

All Private Banks in Bangladesh maintain “Top to Low level management system”. Here a decision was made by top level management and it implemented into mid & low level employees.

Accounting Information System (AIS):

“An accounting information system (AIS) is a system that collects, records, stores and process data to produce information for decision makers” by Romney. An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting statistical reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities.

AIS can be a very simple paper-and-pencil based manual system, a very complex system using the very latest in computers and information technology, or somewhere these two extremes. Regardless of the approach taken, the process is the same.

Accounting Information system

Figure-03: An AIS Processes Data to Produce Information for Decision Makers.

Characteristics of useful Information:

1.      Relevant:

Information is relevant if it reduces uncertainty decision maker’s ability to make predictions, or confirms or corrects their prior expectations.

2.      Reliable:

Information is reliable if it is free from error or bias and accurately represents the events or activities of the organizations.

3.      Complete:

Information is complete if it does not omit important aspects of the underlying events or activities that it measures.

4.      Timely:

Information is timely if it is provided in time for decision makers to make decisions.

5.      Understandable:

Information is understandable if it is presented in a useful and intelligible format.

 6.      Verifiable:

Information is verifiable if two knowledgeable people acting independently would each produce the same information.

7.      Accessible:

Information is accessible if it is available to users when they need it and in a format they can use.

Component of Accounting Information System (AIS):

AIS can’t do anything’s without any its users. So the AIS and the people who use it must still collect, enter, process, store, and report data and information. The paper and pencil or the computer hardware and software are merely the tools used to produce the information.

Accounting information systems are composed of six main components:

  1. 1.      People: users who operate the systems and perform various functions.
  2. 2.      Procedures and instructions: both manual and automated, processes involved in collecting, processing, managing and storing the data about the organization’s activities.
  3. 3.      Data: data that is related to the organization and its business processes
  4. 4.      Software: application that processes the organization ‘s data
  5. 5.      Information technology infrastructure: The actual physical devices(computer, peripheral devices, and network communication devices)and systems that allows the AIS to operate and perform its functions(to collect, store, process, and transmit data and information)
  6. 6.      Internal controls and security measures: That safeguards or secures the data in the AIS.

 How AIS can add value to an organization:

As a support activity, the AIS adds value by providing accurate and timely information so the five primary value chain activities can be performed more effectively and efficiently. Well-designed AIS can do this by:

       Improving the quality and reducing the cost of products or services.

       Improving efficiency. Well-designed AIS can make operations more efficiently by providing more timely information.

       Sharing knowledge. A well designed AIS can make it easier to share knowledge and expertise, perhaps thereby improving operations and even providing a competitive advantage.

       Improving the efficiency and effectiveness of its supply chain.

       Improving the internal control structure. Security, control and privacy are important issue in today’s world. AIS with the proper internal control structure can protect systems from problems such as fraud, errors, equipment and software failures and political disasters.

       Improving decision making.

Principles of AIS

A sound accounting information system must be flexible and coat beneficial as these are the principles of an effective AIS. Here in below those are described briefly.

    I.            Flexibility of Accounting Information System

Flexibility means that the system should be so much flexible that it can be changed when necessary. Flexibility helps the organization to perform its task easily and quickly as they want.

       Organizational Structure should flexible for improving their activities in different situation.

       Organizational Data structure should be very easy which will help the employee to cope up with the system easily for the long run success.

       Data Recovery system must be simple which will help the employee to recover the lost data or previous data.

  II.            Cost effectiveness of Accounting Information System

Cost beneficial means the benefits of information must outweigh the cost of providing it. Cost effectiveness indicates the minimizing process of cost which helps to maximize the profit of an organization.

       Data Documentation system is the process how data are maintained and stoke for future.

       Data Storing should be less costly because it reduces the level of profit.

       Maintenance of Data Structure is the most costly activities in every organization so they should maintain is chiefly.

  1. III.            Usefulness of Accounting Information System

Some time a success of a company depends on the usefulness of AIS. If AIS provides more useful data or information with a proper way & also in time, than it will help the organization to achieve the goal easily. Here in below I provide some information about usefulness of AIS in Private banking sector.

       Relevant data means if data reduces uncertainty decision maker’s ability to make predictions, or confirms or corrects their prior expectations as they demand.

       Reliability of data means if it is free from error or bias and accurately represents the events or activities of the organizations.

       Accuracy of data means if it is free from error or bias and misrepresentation.

       Timely data means if it collected and provided in time for decision makers to make decisions and for user’s generating information.

Concepts of AIS among Private Banks in Bangladesh:

A proper structural Accounting Information System (AIS) is so important part of an organization. All private banks maintain separate department for Accounting Information System (AIS). The name of their department is FAD. For performing their activities they need the help of Information Technology Department (IT). IT department help them by providing computerized and technological support. FAD work centrally for connecting all branches of SJIBL. They maintain a distributed information system. Every branch maintain separate server for updating information. FAD collects that information via different software and manually generates information as they need. But some information is collected through Fax, Phone and Letter because of lack of their technological opportunity. On the other hand sometime a branch collects some information from FAD by the same way but there are some restrictions for providing information to the user.

After collecting the information they manually generate information. That information is in printed copy. They prepared two copy of data and then one copy of data are send to the Audit Committee and others are preserved for evidence. After auditing the data the audit committee make information themselves and again sends it to the FAD division. Then they analysis the information and publish or provide the information to the user. By this way the FAD works and maintains all accounting rules & regulation with help of information technology. In the view of that it is easy to say that Accounting Information System is totally mixed with their system and tiring to speed up their system for achieving the success. So it can be said that they maintain their AIS in a proper structural way within a separate department.

Some information about FAD department is given below.

  Name of the department: Financial Administration Division (FAD)

  Activities of the Department:

  Data collection

  Data maintenance

  Data management

  Data control

  Information generation

  Strength of the Department:

  Experienced employee

  Stable structure

  Good internal controlling system

  Maintain GAAP

  Internal Sharia audit committee

  Limitation of the Department:

  It maintains distributed data structure which increases the risk of data hacking and data lost.

  It maintains both manually (printed) and computerized system that why it is too costly for them.

  Some time data are collected manually (through mail, messenger etc) so false data can make error in report.

  They process data manually (on hand calculative processing) that’s why it needs much time for preparing report for user.

  Future Plan: Give a new technological structure, more features and services in banking sector.

 Operational system of AIS in Private Banking Sector:

In present days all the private commercial banks make their banking operation through combination of manual and computerized system. Here some operational activities of FAD, that how they collect the data are given below.

Manual :

  • Payment order(PO)’s data collection,
  • Demand Draft(DD) ’s data collection,
  • VISA card’s data collection,
  • L/C Opening’s data collection,
  • Monthly equipment’s data collection
  • Investment Application’s data collection, etc.


  • Local remittance transfer’s data collection,
  • Foreign remittance transfer’s data collection,
  • Primary share request entry’s data collection,
  • Performance report’s data collection etc.

Combination of Both:

  • Account opening’s data collection,
  • Deposit Scheme open’s data collection,
  • Cash receiver’s data collection,
  • Cash payment’s data collection,
  • Clearing of Cheque’s data collection, etc.

Here in this report computerized accounting information system is mainly focused.

Maintenance of computer based transaction in Private Banks:

Transaction processing system is a part of Accounting Information System. Mainly two types of transaction are held in Private Banking. Transaction varies department to department as their need. So transaction processing system depends on the user’s activities as it demanded. Here I describe them in below.

Software Base:

They have some activities that are maintain through software. Those are given below.

  • Entry of account opening information,
  • Profit distribution,
  • Collection of Deposit,
  • Payment of Salary,
  • Internal expenses listing,
  • Investment activities listing, etc.

Example: In banking salary structure are predefined, when salary of employee are occurred than software send those salaries from Salary Account to all Employees individual account. Like this way software base transaction occurs.

Web Base:

They have some activities that are maintain through web. Those are given below.

  • Online Cash Transfer,
  • Payment of Cash,
  • Collection of Cash,
  • Clearing of Cheque,
  • SWIFT,
  • Letter of Credit authentication,
  • Currency selling and purchasing,
  • Branch to Branch Internal Transaction, etc.

Example: Payment of cash is a web based transaction, because a client can draw his/her money from any branch in our country. For that reason employee of cash counter need to verify client’s signature and photos as on requirement so he entered on web and collect data from the server by querying his/her account number.

Types of software used in Private Banking Sector:

A company can use many different strategies to obtain new AIS. They can purchase software (local and foreign) or they can use their information system departments to develop their requirements are unique or they can hire an outstanding company to handle data processing actives. In our country very few companies’ software’s are developed by local and foreign companies. Many Software are used in every banks, which are categories in below.

Self: Most of Banks build their self software for maintaining their transaction and data transfer process within their organization. Names of self build software are given billow.

  • Customized Software (PcBank, Flora, Ultimas, BankingPro etc)
  • Customized Clearing Edition Software

  Foreign: They also use some foreign software for preparing report or document and for preserved it in server. Names of foreign software are given billow.

  • Microsoft Office2003/2007 Business Edition
  • Windows Server Edition
  • Adobe Reader Office Essential Edition [PDF]

  Local: Some local software are used for helping the daily activities. Names of local software are given billow.

  • Canon Printer Installer
  • Epson scanner ultimate

 Main software used for maintaining AIS in Private Banking Sector:

Software is one of the most important parts of AIS. They use two types of software. Firstly they use self made Software. And on the other side they use Microsoft Office for performing other activities. Here in below I describe about customized Software.


  • Banking Transaction are held through it like cash payment, cash receive etc,
  • It helps to input the Clients Information in server.
  • It process bank statement of clients.
  • It helps the authorized user to send or receive data from another user.


  • It is a Decentralized or Distributed System that’s why data are separately saved in several servers.
  • It is a distributed system that helps to minimize the risk of data loss
  • The features of this software are so modified that’s why it is quite easy transaction Process in a short time.
  • It uses real time processing system that is easy for updating information.


  • The main problem is that the data are in decentralized, if one server is disable then data ware lost from the server and if connecting server are disable than the total system will disable.
  • It needs much time to collect information from outside of the city, because data transfer speed depends on distance between data sender and receiver.
  • It has no structured auto data processing opportunity so that it needs to do manually (like voucher processing, profit distribution on FDS).
  • Low Security for data hacking, error and misrepresentation of data.
  • It cannot collect all information as user (of investment and foreign division) need because of lack of some feature of data collection.

Now a day’s internet is expanded its dimension all over the world and connected people over the world. So internet or websites are an essential part of an organization. They maintain Website for their user and they also maintain web base transaction in all over the country. This Website maintain through Information Technology (IT) department.

Some important information about this web-base transaction is given below: When the data are entered in computer software then the data are uploaded over a network. They have both Intranet and Extranet network. In below the activities of those networks are explained with example.


In every branch of Bank’s have several server. When certified data are uploaded in software then the data are stored in server of its branch. Several branches have different code for them and for server. When an employee need to know about specific information about a client then he access the server and find the information. So it is clear that Customized software is the media that can connect every server to each other and store the data in server.

Example: When a cash transaction occurs then few activities are happened with software. First of all the clients account number are entered in the software, then a signature verification command are pressed then software collect the data automatically and show it to the employee. After that his required amount are deducted from his balance and again software saved it to server with proper information (like time of the transaction, employee code and etc.).


Extranet are maintained for external user. They manage their extranet through a website. It provides lots information for external user. Information’s are updater through the employees of IT department and information’s are created and authenticated with help of the employees of FAD department. Some information’s about the extranet are given in below.

Updating Procedures:

  • Information & News uploaded by IT department.
  • Coding & structure changed by several customized software.

  Period of update : As on demand

Activities of network:

  • Keep alive and make relation between the server and website.
  • Connect each server with every server for transferring dates.
  • It helps FAD to collect daily information from several servers.
  • It helps to provide information to internal & external users.

Information on website for external user:

  • Vision & mission
  • Board of directors
  • Executive committee
  • Audit committee
  • Shariah Board
  • Foundation committee
  • Divisional heads
  • ATM location
  • Executive head office
  • Executive branches
  • Financial statement
  • Charges & profit Rate
  • Schedule of charges
  • Branch information
  • Risk management
  • Bank Securities Ltd.

Table-01: Information on website for external user

  Relation of FAD with network :

Network connects all servers within a family. They maintain a distributed networking system where every server is connected each other. FAD maintains a server which they use for collecting data from several servers as they need for generating information or preparing report for external or internal user.

Client’s data processing procedures in Private Banking Sector:

By the use of customized software the client’s data are processed in two ways, such as:

Batch Processing System:

Batch processing is refers to Periodically Recording System of data. Batch processing is entries the client’s data within a certain period as the requirement of procedures.

  • L/C opening and closing needs a certain period of time for that it is under BPS,
  • Short or long term loan facilities are  periodic system so that is the reason for taking it under the BPS,
  • After a certain period profit will generated and distribution that’s why it is under BPS,

Real-Time Processing System:

Real Time processing is refers the immediately recording of data. Here they process data which comes on their hand first.

  • Cash deposit,
  • Withdraw of deposit,
  • Opening of new account,
  • Statement of account,
    • Cheque Book requisition and collection, etc.

Internal control techniques in Private Banking Sector:

Information system can provide inaccurate information if the inputs are incorrect or incomplete or if the inputs are completely processed or are processed inaccurately. Similarity, the distribution to authorized receives should also be controlled. Various control measures are employed within procedures and in managing data to achieve desired control objectives. In FAD and also other department of banks maintain two types of controlling system for solving any kind of error, fraud and misrepresentation of data.

Segregation of Duties(S/D):

Separation of duties is the concept of having more than one person required to complete a task. In business the separation by sharing of more than one individual in one single task shall prevent from fraud and error. The concept is alternatively called segregation of duties or, in the information technology, separation of powers.

FAD is centrally controlled for the solution of all kind of problem but in FAD- they   maintain S/D controlling technique for solving different types of problem.

  Documentation Control(D/C):

Document control is a regulatory requirement within accounting procedures, work instructions, policy statements, etc. — provides evidence of documents under control. Failing to comply could cause fines, the loss of business, or damage to your business reputation. So, that is the main reasons for maintain D/C controlling system all department over the country.

 Reporting system in Private Banking Sector:

Accounting to an old saying-‘measurement affects behavior’. This means that employees tend to focus their effort primarily on those takes that are measured and evaluated. Budgets are financial planning tools where performance reports should be developed on the basis of responsibility accounting. We know that different companies used different techniques for their internal or external reporting. Most of them used more than one technique. In below I describe some activities of reporting system FAD use for them.

Internal reporting:

  • Daily: Most of the activities are performed as daily basis{like cash transaction, every day expanse(e.g. entertainment of client, fuel for generator), online transaction}
  • Monthly: Salary sheet, equipment requisition,
  • Quarterly: They prepare quarterly financial report for internal audit body.
  • Yearly: They prepare yearly budget report, financial report.
  • Performance report: In every half of the fiscal year employee of the banks bound to provide their performance report to HR department. And every department of SJIBL prepares a half yearly performance report about their activities and provides it to governing body.

  External reporting:

  • Daily: Clearing of cheque, transaction of remittance
  • Yearly: They prepare tax report & financial report.
  • Others: Some time they prepare different types of report as on demand of client and government.

Principles of AIS maintained in Private Banking Sector:

 Flexibility of Accounting Information System in Private Banking Sector:

Flexibility means that the system should be so much flexible that it can be changed when necessary. Flexibility helps the organization to perform its task easily and quickly as they want. In Private Banking Sector I found something that depends on flexibility. Those are given in below.

       Organizational structure:

Private Banks maintain a stable organizational structure.  If any problem arises they cannot change it.

       Organizational data or file structure:

They use complicated data structure in their organization, and the employees face difficulties doing their activities and they need more time to adopt it.

       Data recovery system:

They can recover lost data easily because they use both printed and computerized data storing system.

Cost effectiveness of Accounting Information System in Private Banking Sector:

Cost beneficial means the benefits of information must outweigh the cost of providing it. Cost effectiveness indicates the minimizing process of cost which helps to maximize the profit of an organization. If AIS is more costly than it reduce profit ratio of an organization but if it effective and efficient and need low cost to maintain than it help the organization many way.  Like it maximize the profit, reduce the time for handling the client and generating information in low cost.

       Data documentation:

Private Banks maintain the printed and computerized data documentation control system, in this regard they need to store huge data for daily activities that are too costly for them.

       Data storing:

Private Banks have many branches, every branch maintain several server of computerized data storing and store house for printed document storing.

       Maintenance of data structure:

Private Banks maintain a fixed data structure which is less costly and effective for them.

Usefulness of Accounting Information System in Private Banking Sector:

If AIS provides more useful data or information with a proper way & also in time, then it will help the organization to achieve the goal easily. Here in below I provide some information about usefulness of AIS in Private Banking Sector.


Relevant data are collected from the internal source and also presented to the high level management authority.

       Reliability & Accuracy:

They have some confusion about the reliability and accuracy of data because they have to collect data through manual (mail & messenger) and computerized way but they have some controlling technique which can find any fraud and error very swiftly.


Because of some manual data collection procedures some data are not timely collected in Private Banking Sector.

 This part of study has been prepared by interviewing 17 internal users of AIS of Private Banks at the branch level.

Opinion of internal users:

Effectiveness of AIS for providing Information in SJIBL:

The respondents were asked about the effectiveness of AIS for providing information in their organization.

Graphical Presentation


From the observation it is found that, 23.5%(4) respondents were disagree and 23.5%(4)  of respondents were neutral, 35.3%(6) respondents were agree and rest of 17.6%(3)  respondents were strongly agree  about the effectiveness of accounting information system for providing information to internal users.

Satisfaction Level of AIS


Respondent in Percentage(frequency)




Using software in Reporting17.6% (3)35.3% (6)47.1% (8)
GAAP64.7% (11)23.5% (4)11.8% (2)
Internal Controlling System17.6% (3)58.8% (10)23.5% (4)
Transaction Cycle(Period)58.8% (10)23.5% (4)17.6% (3)

Table-02: Satisfaction level of AIS.


From the observation it is found that,

  In case of using software in reporting, 17.6% respondents are satisfied, 35.3% respondents are neutral & 47.1% respondent are dissatisfied.

  In case of maintaining GAAP, 64.7% respondents are satisfied, 23.5% respondents are neutral & 11.8% respondents are dissatisfied.

  In case of maintaining internal controlling system, 17.6% respondents are satisfied, 58.8% respondents are neutral & 23.5% respondents are dissatisfied.

  In case of maintaining transaction cycle, 58.8% respondents are satisfied, 23.5% respondents are neutral & 17.6% respondents are dissatisfied.

Major Findings:

This study has focused on the computerized accounting information system in private banking sector. The main findings about Private Banks of the study are given in below.

  1. They maintain separate department for Accounting Information System (AIS). The name of their department is FAD. FAD has some problem like, distributed data structure, manual data processing and risk of security. But it has also some strength like, good internal controlling system, internal audit committee and stable org. structure.
  2. The Banks maintain both manual and computerized system for performing the daily operations of AIS.
  3. The computerized transaction processing system is categorized into software and web based system.
  4. In Private Banking, they use self developed software for performing transaction and they also use local and foreign software for preparing report and it also helps to performing other activities.
  5. They use many different main software that use to performing transactional activities and transferring data. It has some advantage like, decentralized system, minimum risk of data lost and speedy transaction system. And the negative side is it needs much time to collect information, risk of data hacking and it has no auto data processing system.
  6. They maintain website for their internal and external user for performing transaction and providing lots of information to them.
  7. The client’s data are processed in both batch and real time processing system.
  8. In Private Banking, segregation of duties and documentation control techniques are used for performing internal control system.
  9. Daily, monthly, quarterly, yearly and performance report are prepared for internal and external reporting.
  10. Both the banks maintain a stable organizational structure, a complicated manual and computerized file structure, easy data recovery system, costly data documentation & storing system. Their AIS can also provide relevant and reliable data’s.


The following points are recommended after the study.

  1. All the Private Banks maintain a fixed organizational and data structure which can create problem for new employee to cope up with the existing system.
  2. They use decentralized web based transaction and data storing system, which create problem for financial administration division (FAD) for collecting data, so they should use centralized system for increasing the effectiveness of AIS.
  3. The main software different customized operating software which is not effective enough for generating report or information, so they should develop new software for batter performance.
  4. They should give more emphasize on their manual (mail & fax) data transferring system.
  5. They should increase more safety for protecting data hacking, error and misuse of data.

After solving all the problem of above it can say Private Banks maintain a proper structural banking system with the help of AIS.


The accounting information system of private banking sector is in the primitive stage. They have separate AIS department. From the above analysis and discussions, it may conclude that the banks made their banking operation through combination of both manual and computerized system. They use computerized system generally for operating, data transferring and storing purposes. But the impact of computerized AIS is not significant. Thought they maintain a web-site, but all the transactions are not web based. They regularly prepare financial statements for evaluation of performance and for external reporting and performance evaluation they prepared financial statements and published annually. The users of AIS were satisfied about their AIS and internal control system. They record and collected their source document through computer. They think their AIS are cost beneficial and flexible. They use real time & batch processing for updating their information. But their AIS were not so effective to provide information.

They should give more emphasis on internal control system, safeguarding assets and information generation or reporting system. In case of external reporting and internal reporting their actives have lots of gap. In comparing with the developed foreign banking sector some banks should put more emphasis on web based transaction and individual online banking system.




1.       Marshall B. Romney, Paul John Steinbasrt, “Accounting Information System” (10th Edition) (February 2006), Pearson Prentice – Hill.

2.       Paul Bocij, Andrew Greasley, Simon Hickie, “Business information system: technology, development and management” (1st Edition),(2009), Pearson Education, Ltd.

3.       BRIAN Williams, Stacey C. Sawyer, “Using Information Technology” (9th Edition), (2010), McGraw Hill.

 Annual Reports:

1.       Annual Report 2011

2.       Annual Report 2010


1.       Dr. Md. Mohobbot Ali, Farjana Yeshmin & Eti Laila Kazi, “Journal of Business Studies”, Vol-XXXI, No-02, December 2010,

2.       Sumon Das, Shilpi Das, “Accounting & Auditing”, the Bangladesh Accountant, October-December 2008.






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