The Impact of Electronic Banking on Financial Performance of Commercial Banks in Bangladesh: A Descriptive Analysis

Abstract

E-banking has become one of the most popular methods of banking that has experienced a considerable expansion during the last few years. Information technology (IT) has become the heart of the banking sector, while the banking industry is the heart of every robust economy. If it collapses so will the economy. Through reducing banking costs, electronic banking can increase bank incomes. However, there is a relative dearth of empirical studies examining the impact of e-banking on performance of banks. Though e-banking is gaining acceptance in Bangladesh, the impact of e-banking on bank’s performance is yet to be established. This paper fills this gap. Using panel data of commercial banks, this study empirically investigated the impact of e-banking on the performance of Bangladeshi banks measured in terms of Net Profit and factors representing electronic Banking. Empirical findings of this study are of greater significance for the developing countries like Bangladesh because it will invoke the attention of the bank management and policy makers to pursue such policies to expand e-banking. This study also contributes to empirical literature by reconfirming (or otherwise) findings of previous studies.

Keywords: E-Banking, Financial Performance, Commercial Banks

JEL Classification: L86, M15

DOI: 10.7176/RJFA/13-19-03

Publication date:October 31^st 2022