The central bank has prepared a draft national payment systems act to govern the operations of all kinds of payments in the country.

Once implemented, the Payment Systems Act 2015 will enhance efficiency in controlling the payments.

The objectives of the national payment system include minimising payment, clearing and settlement risks as well as achieving reliable, secure, convenient, cost effective, universal and integrated systems to meet the needs of the growing economy.

It also aims to instate punitive measures for those who contravene laws.

“At present, there are a lot of activities under the electronic system. The law aims to prevent irregularities and bring law breakers to justice,” said Nazneen Sultana, deputy governor of Bangladesh Bank.

The proposed law comes right when transactions through the electronic payment system, the electronic fund transfer and mobile banking are growing tremendously -- a development which necessitates providing users a safeguard from electronic frauds.

The draft of the law has been uploaded on the central bank's website for public scrutiny and opinion, both from individuals and banks, after which the regulator will move to make it law.

Under the draft, Bangladesh Bank will regulate the national payment systems to reduce potential risks, and no individual or company will be able to implement payment services without obtaining a licence from the central bank.

However, banks or other financial institutions which already maintain accounts with the central bank will not require new licence to provide payment services. They will however, need to get the regulator's no-objection certificate.

People found guilty of violating rules under the law would face a fine of a maximum of Tk 5 lakh, or a prison-term of up to three years or both.

If any licensee wants to outsource the payment system management, it has to take permission from the central bank. 

Around Tk 7,000 crore worth of cheques are being cleared a day under the electronic payment system, which makes the economy vibrant, Bangladesh Bank Deputy Governor Nazneen Sultana said yesterday.

The central bank's initiative has revolutionised the payment system, she said at the launch of Al-Arafah Islami Bank's mobile banking service—Hellocash—in the capital.

Around 1.5 lakh cheques are being cleared a day with the electronic payment system. “Previously, it used to take three or more days to clear a cheque.”

A huge change has taken place in electronic fund transfer, Sultana said. About 10 lakh instructions are received and Tk 300 crore in funds are transferred electronically a day, she said.

The salaries of government and non-government employees are now transferred to their accounts within a minute, said Sultana.

The central bank bears the cost of running the system, she added. “Our governor [Atiur Rahman] often says this is a kind of CSR of the central bank. We want people to get used to electronic banking and take benefits from it.”

Twenty out of the 28 banks which got Bangladesh Bank's approval for mobile banking, including Al-Arafah, have so far introduced the service.

At present, around Tk 391 crore is transacted through mobile banking, she said.

Transaction in banks did not decrease even amid political unrest, thanks to the electronic fund transfer facilities, she said.

Banking services are not available in all the 68,000 villages of the country, said Md Habibur Rahman, managing director of Al-Arafah.

About 70 percent of the population has mobile phones, he said, adding that his bank will try to extend such services to all of them through mobile phones.

The bank's new service will also allow clients to pay utility bills, enjoy cash-in and cash-out services, send-receive remittance and many other transactions with security and ease, he said.

Badiur Rahman, chairman of the bank, and SM Shameem Iqbal, vice chairman, also spoke.

AFP, WASHINGTON: The success of the new China-led development bank has caught the United States off guard, after it fought the project and now finds itself increasingly isolated. Britain, Germany, France... the United States has watched, helpless and dumbfounded, as its European allies flocked to join the Asian Infrastructure Investment Bank, seen as a potential rival to the World Bank and the Asian Development Bank, both institutions under powerful US influence.

The list does not stop there. Other US allies, like Australia and South Korea, are considering joining the AIIB, which already has about 30 member nations and the blessing of International Monetary Fund chief Christine Lagarde.“The US has been caught flat-footed by the rush of countries, including its close economic and political allies, that are lining up to join the China-led AIIB,” Eswar Prasad, a former head of the IMF’s China division, told AFP, pointing to the “declining power of the US in driving the global economic policy agenda.”The Obama administration has been waging an intense but low-profile lobbying campaign against rival China’s $50 billion bank project unveiled in October. Officials have insinuated that the AIIB would lower international development standards.“Will it adhere to the kinds of high standards that the international financial institutions have developed? Will it protect the rights of workers, the environment, deal with corruption issues appropriately?” Treasury Secretary Jacob Lew said last week in testimony in Congress.The upfront opposition, which is fed by a climate of mistrust between the world’s leading economic superpower and its fast-growing rival, has proved ineffective.
“The US became isolated on the issue relatively early because they were so vocally critical. As a result the US lost the opportunity to have more of an open discussion with countries who were considering joining,” said Scott Morris, a former Treasury official, in an interview.
That failure has its consequences. In a rarity since the end of World War II, the United States must prepare to cope with a multilateral institution on which it will have no direct influence.
Accustomed to constructing the world’s financial architecture, the United States may be overconfident and underestimated the powerful attraction of China and its colossal cash reserves.
“The United States has only known its status as a leader and it has psychologically not adjusted to the real emergence of other countries including China. Their mentality is a bit behind the reality,” said Hongying Wang, an expert on US-China relations at the Centre for International Governance Innovation, a Canadian think tank. According to experts, Washington also underestimated the weariness of certain countries, including its allies, with its lack of enthusiasm for multilateral economics.
The United States is blocking 2010 reforms of the IMF that would raise the voting rights of emerging powers and sometimes is accused of neglecting the World Bank. Washington is the major stakeholder in both institutions.
“These countries have more ambition for larger multilateral institutions and they become frustrated with the position 
of the United States, which is not terribly ambitious,” Morris, the former Treasury official, said of the countries that are joining the AIIB.
Growing aware of its isolation, the United States has begun to relax its position by opening the door to cooperation with the China-led bank, which is expected to be open for business by the end of the year.
“The United States would welcome new multilateral institutions that strengthen the international financial architecture,” said Nathan Sheets, Treasury under secretary for international affairs, on Monday.
In a recent blog post, the US Treasury said that it will continue to “engage 
directly” with China and coordinate with other international partners “to provide concrete suggestions on how the AIIB 
can best adopt and implement high-quality standards.”

Transfast and Brac Bank have launched online money transfer services for customers of the US-based company, enabling them to make direct deposits into the accounts of the Bangladeshi bank.

Under the partnership, Transfast customers will be able to send money online, via mobile or through agent locations around the globe to the Brac bank accounts of their friends and family in Bangladesh.

The beneficiaries will receive the money in their accounts right away or can choose to pick up the amount within minutes at thousands of convenient locations throughout Bangladesh.

In addition to direct-to-bank deposits, Transfast customers can pick up cash from any of Brac Bank's 166 branches, 50 SME unit offices and more than 100,000 agents of bKash, the country's leading mobile-based financial service provider owned by Brac Bank. 

“Brac Bank is one of the leading banks in Bangladesh and a pioneer in sophisticated technology in serving all its clients, and we are excited to offer our customers the ability to deposit money instantly and securely there,” said Samish Kumar, CEO of Transfast, a US-based company. 

An official of Brac Bank yesterday said the two parties struck a deal about four years ago. Until now, the beneficiaries needed to visit a branch to receive the amount they were sent from abroad.

But under the new arrangement, the customers will receive the money directly into their accounts, which will save their time, he said.

In 2014, the country saw some $15 billion in remittances flow into the country, making it the world's eighth-largest remittance corridor, according to the World Bank.

Brac Bank, the country's largest SME lender, currently accounts for almost 4 percent of the total remittances to Bangladesh. 

“We are pleased to be the first bank in Bangladesh to partner with Transfast to launch an instant bank deposit service,” said Syed Mahbubur Rahman, managing director of Brac Bank.

The partnership further highlights the bank's commitment to increasing the remittance flow into Bangladesh through new technologies and partnerships, he said.

Transfast is a leading international money transfer and payments company in the $608 billion annual global remittance industry, operates a proprietary network of over 300,000 payment points across more than 100 countries in the Americas, Asia, Europe, and Africa.

Like banks, chief executives of non-bank financial institutions now cannot be removed or suspended without approval from Bangladesh Bank, a move which gives the central bank more power to fight irregularities.

The move comes after CEOs of NBFIs, in a meeting with the BB governor earlier this month, demanded more protection such that their employers could not remove them at will.

At the same meeting, they also argued that the safeguard is important for helping them work with integrity and fight irregularities effectively.

Conversely, the CEOs are now answerable to the central bank for any irregularity in their companies.  

Experts said the central bank instruction will provide more job security as the executives will not be obliged to carry out any unlawful instructions from the board to retain employment.

At the same time, it will make the CEOs more accountable, as, in case of any scam or irregularity, they will not be able to justify their actions by simply saying that they had to perform the wrongdoings under pressure from the board. 

If CEOs seek to leave voluntarily or cancel their agreements with the NBFI before the expiry of the tenure, they will have to serve notices to the boards at least one month prior to their departure, said the central bank notice yesterday.

The chief executives will have to spell out reasons for their decision in the notice, and also forward a copy to the central bank.

Conversely, if a board wants to terminate its agreement with the CEO or instruct him to resign before the expiry of the tenure, it will have to serve notice to the CEO one month before he is due to leave.

In the notice, the board will have to state reasons for the order, and forward a copy to the central bank.

If the post of a CEO falls vacant following any voluntary departure or the expiry of the tenure, the board can promote someone from within the organisation to the post of acting CEO for a maximum three months.

The NBFI will have to inform the central bank about the appointment and send a profile of the employee being promoted.

If the NBFI fails to appoint a CEO within the three months, BB will appoint an administrator to the institution to act as the CEO, and the institution will have to bear salaries and other perks for him or her. 

The central bank can remove any CEO in the interest of the company and the public.

Yesterday, the central bank also issued a notice on appointment of advisers and consultants on contractual basis. It said the advisers cannot be paid too high a remuneration. The duration of their tenure will be one year, and they can be reappointed.

A former director, CEO or other retired officials cannot be picked as advisers at least two years before their departure or retirement.

In case of consultants, the central bank said they can be appointed to help NBFIs carry out specialised activities in areas of tax, laws and cases, engineering and technical and ICT.

The NBFIs should avoid recruiting consultants for activities that its regular employees are capable of doing. The notice, however, will not be applicable to advisers and consultants already employed at different NBFIs.