M-banking gains momentum raising share in fund transfer

Posted by BankInfo on Tue, Jan 08 2013 06:41 am

Mobile banking (m-banking) in the country is gaining momentum by raising its contributions to channelising cash from urban to rural areas and thus enabling low-income people send money to their near and dear ones.

M-banking is a collaborative service of banks and telecom operators that has brought relief to the lives of people as they can collect funds at their homes from the earning members of their families staying apart at work places to meet monthly expenditures.

Fourteen out of total 23 banks those have secured licenses from Bangladesh Bank (BB) introduced m-banking. Of these, m-banking styled bKash of Brac Bank Ltd and money transfer services through mobile of Dutch Bangla Bank Ltd (No specific names of the service like one of Brac bank) are enjoying monopoly in the market.

As of December 31, numbers of clients of bKash reached around 237,423 while that of DBBL 172,000. According to data available from the two major m-banking service providers, per day per client transaction accounted Tk 553 in bKash while that of DBBL was Tk 487.

The number of DBBL agents is around 3,181 and cumulative transaction last year was $ 11 million, while the number of bKash agent is 5,383 and cumulative transaction is $14.8 million.

Islami Bank Bangladesh Ltd (IBBL), the largest private sector bank having over 7 million clients, has launched its m-banking service styled mCash last month with the commitment of providing fastest and hassle-free money transfer at the door step of the recipients across the country from and to city and urban areas simultaneously.

As a regulator, Bangladesh Bank authority is trying to promote m-banking service as part of its mission towards achieving inclusive economic growth, which covers people of all sections, clusters and casts irrespectively.

Commenting on the issue, Deputy Governor Abul Quashem said BB wants to establish bank-led m-banking in the country so that the central bank could check terrorist financing and other money laundering concerns properly.

He said there is telco-led mobile banking in many countries, which is not appropriate in Bangladesh.

“The BB wants banks which introduce m-banking will have to have respective guidelines for proper operation of the service; and we are working on it,” he said.

He said banks were directed to follow properly the BB guideline with regard to KYC (Know Your Client/Customer) in case of, agents, money sender and recipients. “Ensuring security of individuals (senders), institutions and the state in delivering money transfer service is very vital and banks were instructed in this regard,” he said.

IBBL’s executive body chairman Eng Eskandor Ali Khan said Islami Bank has developed own software to operate money transfer service through the mCash.

News: The Daily Sun/Bangladesh/8th-jan-13