During the last several years banking services have undergone several changes. There have been excellent gain in capital base, income and return on equity, encouraging upward trend of foreign exchange reserve, inward remittance flow is nothing but appreciable in comparison to the earlier record as per BB report. Monetary policy highlights 7 percet growth target and 6.2 percent inflation target for the fiscal year 2016. Opportunities created by mobile banking
Let mobile banking grow faster for the growth of the economy. This unique opportunity can be utilised further for bringing the poor and the unbanked segments of the population under banking network for the growth and development of the economy
M.A.Jabbar
During the last several years banking services have undergone several changes. There have been excellent gain in capital base, income and return on equity, encouraging upward trend of foreign exchange reserve, inward remittance flow is nothing but appreciable in comparison to the earlier record as per BB report. Monetary policy highlights 7 percet growth target and 6.2 percent inflation target for the fiscal year 2016.
Our country is listed in the lower middle income group and hopefully will be in the list of middle income countries within the next couple of years. Nevertheless, we have to go a long way as a large segment of our population still remains out of the reach of banking services. The large number of mobile phone unsers and Bangladesh Bank-led unique payment and developed IT systems have opened up opportunities of mobile banking in the country.
BB has issued regulatory guidelines for mobile financial service so that the nation can avail this innovative service right way. BB guidelines provide enabling environment for innovations in cost efficiency of this off-branch financial services delivery for the benefit of the people and promote access to formal financial services for the poor and unbanked population segments alongwith putting system as per anti-money laundering and combating financing of terrorism laws and regulations.
Mobilebanking is a process through mobile technology device for banking and financial transaction like cash in and cash out, utility payment such as water bill, telephone bill, deposits into savings account or deposit schemes with banks, loan repayment to banks, nonbank financial institutions, insurance premium to insurance companies, merchant payment, salary disbursement, ATM service, salary disbursement among communicities where banking facilities are not available or it is costly to serve through formal banking process.
Allownaces for freedom-fighters and elderly people can be sent quickly through mobile banking. Corporate office can disburse salary to their employees through mobile financial service, persons to government payments like tax, fee, levy etc., can be made. It is simple for opening account. This new technology of banking started in Bangladesh from 31st March 2011 and does not require a cheque for transaction.
Person to person transfer i.e. money transfer from one mobile account to another mobile account can be done. At present citycell, banglalink, robi, airtel and grameen phone mobile account users can tansfer maximum taka ten thousand per day and twenty-five thousand per month through this mechanism. As per BB guidelines in extending the above mentioned broad range of financial services through mobile financial services (MFS) platforms the primary role of the MFS platforms will be as payment services providers (PSPs) with the secondary engagements in deposit taking, loan disbursement and recovery, insurance premium collection etc. as duly authorized agents of banks, non-bank financial institutions, micro financial institutions, insurance companies etc. concerned.
As PSPs the MFS platforms will be under direct supervision of BBs payment system department, while the onus of regulatory compliance in deposit taking, lending and other financial transactions through MFS platforms(e.g. cash reserves requirement against deposit liabilities, obtaining deposit insurance, maintaining statutory liquidity ratio, advance-deposit ratio, capital charge and provisioning against loan, and so forth) will rest primarily with the banks/non-bank financial institutions and micro-financial institutions etc. engaging the MFS platforms as their authorized agents.
MFS platforms can handle inward remittance received through nostro accounts abroad of the scheduled commercial banks in Bangladesh but no cross border payment transaction can be undertaken by the mobile financial services platforms.
Customers having a mobile from any mobile opertor can be registered for mobile banking for which KYC is obtained alongwith national ID or any other acceptable ID with photograph are required. Customer Due Diligence has to be complied with. Mobile operators namely grmeen phone, banglalink, robi, airtel, city cell and state-owned operator teletalk have recently signed agreement with Election commission with a view to verifying identity of customers who have given particulars in application with the information of national ID. As a result the mobile companiers will get the information of the citizens available with the Election Commission. This will help mobile operators to get correct data of the applicant.
At present more than a dozen of banks are rendering mobile banking service to the people under the brand name such as mobile banking, bKash, easyCash, mCash, mobile money, SureCash, SMS banking etc. The banks rendering the services are Dutch Bangla Bank Ltd., BRAC bank Limited, Prime Bank Limited, Islami Bank Bangladesh Limited, Trust Bank, NCCB, Bank Asia Ltd. Dhaka Bank, Mercantile Bank, AB Bank, UCBL etc.
In our country of over 160 million people out of which 13 percent have bank accounts more than 95 percent of them are mobile phone users. Banks can now offer the banking service to rural and unbanked population through mobile phone. Survey shows that around 54 percent said that this system is less costly and time savings and 63 percent felt trust for this service and 83 percent think that is it easier to access but this services is not available for interbank transaction. (Ref. ASA University Review, Vol.7, No.1, Jan-June 2015).
Mobile Financial Services platforms must follow the ICT Act 2006 and the guidelines on ICT security for scheduled banks and financial institutions 2010 issued by our central bank for the purpose of authentication and security. As a result, transmission information cannot be viewed by unauthorized persons, and also transmission initiated by the user cannot be denied. Information shall remain intact during transmission and cannot be altered. MFS platforms, partners and agents must comply with the prevailing Anti-Money Laundering/Combating Financial Terrorism laws and regulations and circulars of Bangladesh Bank and as such they have to report to BB of any suspicious, unusual and doubtful transactions related to money laudering or terrorism financing activities.
How to make mobile banking effective: This system of banking need to be familiarized and encouraged to marginalized segment of the population in rural and remote set-up and even in urban areas where formal banking facility is not available. All banks/non-banking financial institutions should come forward for expansion of this service to help expansion of banking network. AML/CFT laws and regulations and BB circulars must be followed meticulously. All stakeholder must work and ensure right use of this service. Training/workshop may be arranged so that AML/CFT rules and regulations are familiarized and known to all concerned. Know Your Customer (KYC) and Customer Due Diligence(CDD) formalities have to be performed meticulously. Charge/fee/commision for this service may be minimum. BB guidelines should be followed meticulously for making the service sustainable for the benefit of the people.
Mobile banking can help to cater to the need of vast majority of people of the country. As this is real time online banking and available anytime anywhere throughout the country which is cost effective and affordable and also convenient. This is effective in developing saving habit among the people. Moreover, financial transaction has become smooth and freequent through the use mobile phone. In a country like Bagnladesh where people usually think that formal banking is difficult, mobile banking can help to bring a large section of unbanked population into the financial market. This banking services can facilitate trade and commerce easily and smoothly. Let mobile banking grow faster for the growth of the economy. This unique opportunity can be utilized further for bringing the poor and the unbanked segments of the population under banking network for the growth and development of the economy.
The writer is a banker. He is also Secretary of the national anti-smoking organisation, Adhunik
