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
Post and Telecommunication Minister Advocate Shahara Khatun Sunday seen at inauguration of ‘Post e-Pay (Mobile Banking)’ at GPO headquarters, Gulistan in city Sunday.
Post and Telecommunications Minister Advocate Shahara Khatun Sunday said the hands of 120 million able citizens of the country could turn into the hands of prosperity through utilising the prospects of Information Communication Technology (ICT).
“Telecommunications industry has now become a thrust sector for foreign investment,” she said, adding, ‘The whole world has become a global village with the auspices of the ICT.’
The Minister was addressing while inaugurating a pilot project styled ‘Post e-Pay (Mobile Banking)’ jointly run by Postal Department and Bangla Phone at the GPO headquarters, Gulistan in city.
Sahara said the telecom business previously was confined with a particular segment of businessmen, but after assuming in power in 1996, the then Awami League government created opportunity for opening up the sector for all which have bring revolutionary changes over the years.
3G mobile technology, and availability of Laptops at cheap rates has enhanced tele-density from 29 percent to 67 percent and internet density from 9 percent to 20 percent during last 4 years which has ensured easy telecommunication, e-banking, mobile banking across the country, Shahara added.
Necessary steps will be taken shortly to reach the facilities of mobile banking up to the grassroots people, she mentioned.
Director General of Postal Department, Nayeb Delwar Hossain presided over the inaugural ceremony while Secretary, Ministry of Post and Telecommunication, Abu Bakar Siddik, Additional Secretary, Shawkat Ali, Additional Director General, Fazlur Rahman, Managing Director of Bangla Phone Md. Mobarak Ali also spoke on the occasion.
While addressing Nayeb Delwar Hossain said the Postal Department and Bangla Phone have jointly started this pilot programme on a joint revenue-sharing basis, initially which will be run in seven divisional cities. It will gradually be expanded across the country, he added.
Speakers said opening of Post e-Pay (Mobile Banking) will usher in a chapter in the arena of cloud based Electronic Platform who’s main services will be e-payment gateway, e-commerce platform, document management system and tracking and delivery of goods.
The services will distributed among the people through 10,000 outlets and 100,000 targeted agents across the country.
News: The Daily Sun/Bangladesh/17th-Dec-12
Dutch-Bangla Bank Ltd and Robi Axiata jointly signed an agreement on mobile banking to provide banking services to vast segment of unbanked population through Robi network on Tuesday, says a press release. Michael Kuehner, chief executive officer of Robi Axiata Ltd, and KS Tabrez, managing director of Dutch-Bangla Bank, signed an agreement.
Under this agreement, Robi subscribers will now able to conduct their financial transactions by using their any types of mobile device through a convenient and at affordable cost.
This partnership will be aimed at making the concept of inclusive banking a reality for customers in Bangladesh.
Rozano Marius Planta, country head, digital services of Robi, and AKM Shirin, deputy managing director, and Mir Mominul Huq, head of mobile banking division of Dutch-Bangla Bank, were also present.
News: The Daily Independent/Bangladesh/14th-Dec-12
The 2nd Indian Ocean/ South Asia Mobile Payments & Banking Summit 2013 will convene at Dhaka, Bangladesh from January 30 – 31, 2013. This is an important summit for all who wants to capitalise on the wave of mobile payments and banking opportunities in the developing economies of Indian Ocean/ South Asia region, says a press release.
In Bangladesh, only 13 per cent of the population has bank accounts but the country has country-wide mobile coverage with 56 per cent of the people with mobile phones.
The relatively low banking penetration rate can be attributed to the generally low income, underdeveloped banking infrastructure, high cost of traditional banking products, distance to bank and paper work required to set up bank accounts.
The adoption of mobile banking and payments is key to financial inclusion. According to a research by Juniper Research, global m-banking transactions will reach $ 670 billion by 2015.
The US-based Yankee Group projects $ 545 billion in payments by the same year.
Mobile solutions have taken off and we will see its continual growth as mobile phone penetration continue to increase.
Focusing on India, Sri Lanka, Bangladesh, Pakistan and Afghanistan, this summit will bring together key stakeholders to provide an outlook and forecast on the South Asia mobile financial services and market opportunities.
The Summit will address the policies and regulations involved in the deployment of mobile solutions, microfinance credit models, bank-led models, value added service (VAS) promotion and adoption, mobile money transfer, social media payments, mobile phones’ supply chain management, leveraging on mobile platform to deliver government services, customers’ behavior on mobile payments, role of QR Codes in mobile money, mobile money agents, retails merchants and mobile money, security issues in mobile payments and m-commerce.
Speakers at the summit include Bangladesh Tele-communication Regulatory Commission, Bangladesh Bank, Central Bank of Sri Lanka, Pakistan Tele-communication Authority, Da Afghanistan Bank, Telenor Pakistan, Etisalat Lanka, Association of Mobile Telecom Operators’
of Bangladesh, Orascom Telecom Bangladesh, Indian Banks’ Association, Dutch Bangla Bank and more.
Omar Moeen Malik the Director (Strategy), easypaisa from Telenor Pakistan said, “With Mobile Financial Services really taking up in emerging markets and especially our region, I am really excited and look forward to attending the 2nd Indian Ocean / South Asia Mobile Payments & Banking Summit.
I would be happy to share some of the success stories from easypaisa in Pakistan, and I look forward to
meeting with conference members from other countries and learn more about their deployments and services launched”.
Zakiul Islam, Senior Director, Regulatory Affairs from Orascom Telecom Bangladesh said, “Dream and desire creates Innovation, and innovation turns for betterment of scalable mass when awareness and clarity is created among different entities in the ecosystem. Such initiative, workshop, seminars and interaction will help to create customer awareness and clarity among regulators to encourage innovation for Scalable Mobile Financial Services”.
mChek Bangladesh which provides a patent-pending, general purpose, mobile based secure authentication, authorisation, notification and payments solution is the summit’s Platinum Sponsor.
Commenting on the Summit, Ms Maggie Tan, CEO of Magenta Global said” This is a significant event to increase mobile payments developments in emerging countries.
The Summit gathers stakeholders from the wireless service providers, handsets manufacturers, banks and financial institutions to deliver innovative solutions to consumers and structuring partnerships to offer financial inclusion and generate growth in this emerging sector”. The summit will be held at The Westin Dhaka.
News: The Daily Independent/Bangladesh/14th-Dec-12
Mobile banking to plug gaps in financial inclusion Analysts at the roundtable say the service needs further promotion, coordination
Participants take part in a roundtable on mobile financial services at The Daily Star Centre in Dhaka yesterday.
Bangladesh can use mobile financial services not only to accelerate financial inclusion, but also to bring more than 85 percent unbanked population to the mainstream at a cost effective manner.
Despite the enormous demand for mobile phone-based financial services, a large-scale adoption is yet not seen.
Analysts and policymakers made the observation at a roundtable co-organised by The Daily Star, BRAC Bank and bKash at The Daily Star Centre yesterday.
Former adviser to caretaker government Abdul Muyeed Chowdhury moderated the programme.
Some of the discussants proposed to form a body comprising the officials of the central bank, the telecom regulator, microfinance regulator and other stakeholders, to promote the services.
“A body can be formed to identify the problems and expand the services further,” said Khondkar Ibrahim Khaled, chairman of Bangladesh Krishi Bank and former deputy governor of Bangladesh Bank.
He said microfinance institutions can be the alternatives to the banks in expanding the mobile financial services across the country.
Muhammad Abdul Mazid, former chairman of the National Board of Revenue, also echoed the views of Ibrahim Khaled on the coordination issue.
“There is a necessity of coordination among the regulators to avoid any conflicting situation,” said Mazid who presented a paper on mobile financial services in Bangladesh.
The coordination issue came to the limelight as mobile financial services in Bangladesh are a bank-led model run by mobile phone companies, which are regulated by the Bangladesh Telecommunication Regulatory Commission (BTRC).
Often these two regulators come up with separate orders having no coordination between them.
Iqbal Quadir, a director of bKash and a teacher at the Massachusetts Institute of Technology in the US, also raised the conflicting issues between the banking regulator and the telecom regulator.
AB Mirza Azizul Islam, another former adviser to caretaker government, also stressed the need for coordination in the regulatory framework of the Bangladesh Bank and the BTRC.
Abdul Muyeed Chowdhury also endorsed the idea of forming a separate committee to promote the services.
Bangladesh, with a population of 150 million and a per capita income of around $800, has seen a steady economic growth over the past 15 years. Poverty rates have halved from 60 percent in early 1990s to 31 percent in 2010.
This development has also been reflected in the growth of the country's financial sector, supported by the recent transformation in banking technology.
Speakers said despite these significant improvements, access to basic financial services is still restricted to only 15 percent people.
They said, for the financially excluded people, opening and maintaining bank accounts can be costly, complex and time-consuming due to a lack of education and awareness.
The central bank has allowed 23 banks to operate mobile financial services. But only two banks -- BRAC and Dutch-Bangla -- have come up with the services and registered 20 lakh clients so far.
“Identity is a big problem,” said Nazrul Islam Khan, secretary to the ICT ministry, on the security concern in mobile banking services.
Khan said he is trying to convince the government to make an accurate database of the population, which can be used for mobile banking services.
Mahabub Hossain, executive director of BRAC, a non-government organisation, said mobile banking can benefit the poor who feel shy to go to a bank. But further investment is needed to reach out to the people, he added.
Khalid Shams, former chairman of Grameenphone, said there are some risks in the service, but Bangladesh should seize the opportunity.
Shams, a former bureaucrat, also asked the operators to come up with new products for the targeted people.
Abul Kashem Md Shirin, deputy managing director of Dutch-Bangla Bank, said cost is not a big issue in mobile banking as there will be no cost if there is no use. On security concern, he said it is like using credit/debit cards and there is nothing to be anxious.
Michael Kuehner, chief executive officer of mobile operator Robi, said costing and convenience of services are the two main components in mobile banking.
Hassan Zaman, chief economist of the central bank, said they have planned to launch a financial literacy campaign to make people aware. On why other banks are not coming with the mobile banking services, he said may be it is for the investment and profit margin issues.
Zaman also said the BB is trying to disburse money to the targeted people through mobile phones under different government programmes.
Brig Gen (retd) Shahedul Anam Khan, defence and strategic affairs editor of The Daily Star, delivered a welcome address, while Shah Husain Imam and Salehuddin Ahmed, associate editor and managing editor of the daily, and Syed Mahbubur Rahman, managing director of BRAC Bank, also spoke.
News: The Daily Star/Bangladesh/9th-Dec-12