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

Bangladesh Bank has directed all the banks to better their SME service by taking steps such as skill development of the officials and displaying the SME credit policy at every branch across the country.

In a letter Thursday, the central bank’s SME and Special Programmes Department issued the directive to the banks’ managements.

The directive came after a Bangladesh Bank investigation found that the small and middle entrepreneurs were getting confused about SME credit policy as they were not receiving proper service from the banks’ officials concerned. Such situation was the result of lack of inefficiency among the officials in handling SME loans disbursement, the investigation observed.

In some banks, personal or consumer loan accounts were being logged with those of SME loans, leading the SME people to get confused, the central bank’s letter said.

Bangladesh Bank’s SME department said appropriate training, supervision and monitoring by respective banks’ managements could improve SME loan service.

It, however, said: “SMEs are getting momentum due to relentless endeavors of the central bank and the banks.”

The central bank department, in a separate letter to the branches of different banks, said that the banks could use several refinancing funds of Bangladesh Bank, JICA and ADB to promote SMEs.

News: The Daily Sun/Bangladesh/21th-Dec-12

Government’s finance division said it would not issue special bonds for implementing new power projects as banks face difficulties when bonds remain unsold.

Earlier, Power Division requested Finance Division for special bonds to finance newly proposed power plants, especially the coal-fired 1320 megawatt plant at Rampal in Bagerhat district.

In a letter to power division secretary on 13th of this month, Finance Division’s assistant secretary Abu Dayan Mohammed Ahsanullah conveyed their decision on issuing special bonds to fund power projects.

Meanwhile, the treasury bills and treasury bonds issued by government bond bazaar primary dealers through an auction failed to attract the clients.

As a result, Bangladesh Bank, banks and the government agencies concerned were forced to devolve the unsold bonds and bills on themselves, finance division letter said. It further said the government bills and bonds on the secondary market were not transacted to the expected level.

Besides, given the current financial strength and cash flow position in the country, finance division said the bonds without government guarantee have the lowest possibility of being sold.

In addition, interest rates of the new bonds will be very high, reads the finance division letter.

“So it’s not time befitting to issue new bonds in the market for implementing the new power projects,” the finance division directive said.

Power Division sought $302 million as equity for the newly-formed India-Bangladesh Friendship Power Company that will be responsible to set up the 1320MW coal-fired plant in Rampal, said a senior official.

He also said Bangladesh Power Development Board (BPDB) is likely to sign a power purchase agreement (PPA) with the Indian National Thermal Power Company (NTPC) on January 2 next year to implement the plant.

News: The Daily Sun/Bangladesh/21th-Dec-12

Bangladesh Bank Governor Dr Atiur Rahman, hands over scholarship to a student at a function at BB Head Office in Dhaka Thursday.

Bangladesh Bank (BB) has asked all the banks to introduce scholarship programme for poor but meritorious students as they are not capable of continuing their higher education, a high official of the central bank told reporters Thursday.

The objective of the central bank initiative is to bring more underprivileged students under the coverage of CSR (Corporate Social Responsibility) activities implemented by banks.

The central bank is likely to send a letter to all 47 banks operating in the country asking implementation of the scholarship programme from the current calendar year.

“We are to send letters to all banks soon, more likely by today, in this regard,” said deputy governor of the central bank, SK Sur Chowdhury.

Chowdhury said the number of students receiving scholarship annually by few banks including Dutch Bangla Bank Ltd, South East Bank Ltd and Prime Bank Ltd at present is merely 5,000 in total.

“Of them, DBBL alone covers 4,000 students every year while the numbers of students getting scholarship by other banks is meager,” he said.

Chowdhury said the amount the DBBL disburse under scholarship programme has been curtailed last year compared to the previous year which is affecting the bank’s reputation.

“I don’t want to see a declining trend in scholarship coverage. I want, DBBL will increase the amount again so that more students can be benefited,” he said.

Chowdhury said the scholarship coverage for underprivileged students may be increased significantly if all the banks came ahead with the initiatives.

He said, banks’ CSR in scholarship programme would contribute to develop human resources in the country.

News: The Daily Sun/Bangladesh/21th-Dec-12

The constitution does not allow a minister to hold the position of chairman of any bank, Bangladesh Bank Governor Atiur Rahman said yesterday. The central bank will go by the constitution, he said.

"There is no scope for a minister becoming chairman of a bank,” Rahman told The Daily Star, referring to Home Minister Muhiuddin Khan Alamgir's move to be the proposed chairman of the newly approved Farmers' Bank.

It is among the nine new banks approved by the central bank on April 8. Seven of them, including Farmers' Bank, have already applied for license and two others have been granted time to submit their applications.

Alamgir would not be able to hold the position of the bank's chairman after it has been given the license, said a Bangladesh Bank official. However, there was no legal bar to Alamgir being a shareholder of the bank, he added.

Article 147 (3) of the constitution strictly imposes a ban on the president, the prime minister, ministers and some other constitutional officials from holding any office, post or position of profit or emolument or taking part in the management or conduct of any company, association or body having profit or gain as its object.

If the documents submitted by the seven proposed banks are found to be valid they might be given the license by January next year, the BB official said.

BB Board would take the decision after scrutinising the business plan and other documents submitted by them, the central bank governor said.

"We are collecting all relevant information with due diligence," he said, adding the National Board of Revenue has been examining the source of the money that sponsor directors of these banks are going to invest.

News: The Daily Star/Bangladesh/21th-Dec-12