The central bank yesterday offered monetary incentives to banks to join its national payment switch (NPS), in efforts to give it a boost.

From April 1, a card issuing bank will give only Tk 20 to the ATM-installer-bank for each interbank transaction; the rate is Tk 25 at present, Bangladesh Bank said in a notice yesterday.

But no card issuing bank will be allowed to charge a customer more than Tk 10 for each transaction, down from as much as Tk 25 at the moment.

“This is a good move, both for the banks and clients,” said Abul Kashem Mohammad Shirin, deputy managing director of Dutch-Bangla Bank.

More banks will now be encouraged to join the NPS, he added.

BB has taken the initiative to strengthen NPS in order to facilitate interbank electronic payments originating

from different delivery channels—automated teller machines, point of sales, internet, and mobile applications.

The main objective of NPS is to create a common platform among the existing shared switches already built-up by different private sector operators.

NPS will facilitate the expansion of the card based payment networks substantially and promote e-commerce throughout the country.

The central bank launched NPS in December 2012 with a $5 million financial support from the World Bank, but

only three banks—Dutch-Bangla, Southeast and Pubali—have so far joined the payment switch.
Most other banks use Q-cash or Dutch-Bangla payment gateways.

The volume of transactions using an ATM booth stood at Tk 100,000 crore in 2012, up from the previous year's Tk 68,000 crore, according to data from BB.

Of the 47 scheduled banks (which does not include the nine new banks), 40 provide ATM services.

An ATM booth owning bank can charge Tk 5 from a client for a balance inquiry or mini statement, according to

the notice.  

“This move will encourage banks to set up more ATM booths, which will ultimately help expand banking services to a wider segment of people,” the central bank said.  

The central bank said the advantages of this new payment platform are enormous and e-commerce will

spread across the country. Even then, BB will not charge a penny from the customers, it said.

Once all banks in Bangladesh join the NPS, a customer using a credit or debit card of any bank will be able to draw cash from any ATM and POS in the country. Transaction costs will significantly go down as the

transactions will be routed through the NPS instead of Visa, Master or Amex card networks abroad.

Moreover, clients will be able to make purchases with cards through the internet and web portals within the country.

“Visa and Master card authorities will lose their earnings from Bangladesh as they will not get any network fee,” said Shirin of Dutch-Bangla.