BB unlikely to allow telcos to be part of agent banking service

HM Murtuza | Published: 00:00, Aug 15,2019

 
 

A file photo shows Bangladesh Bank headquarters in Dhaka. Bangladesh Bank is unlikely to allow any mobile phone operator to run agent banking service for fear that any such move would create uneven competition in the business.— New Age photo

Bangladesh Bank is unlikely to allow any mobile phone operator to run agent banking service for fear that any such move would create uneven competition in the business.

The BB is mulling over making a policy decision in this regard following the Bank Asia’s proposal to appoint mobile phone operators Grameenphone and Robi as agents of the bank’s agent banking wing.

Bank Asia, a private commercial bank, submitted the proposal to the central bank after the mobile phone operators received clearance from the Bangladesh Telecommunication Regulatory Commission in this connection.

The telecom regulator has issued clearance to GP and Robi to run agent banking service through their outlets across the country.

‘We hope that it would be possible to finalise our decision soon on the Bank Asia’s proposal to appoint GP and Robi as its agents,’ a BB official said.

He, however, said that allowing mobile phone operators to run agent banking service through their outlets might create a state of uneven competition for the other agent banking operators.

Any uneven competition might also lead to monopolistic agent banking business, the BB official said.

On the other hand, the mobile phone operators were expecting that using telecom operators for the agent banking operation would help explore the ample scope for taking banking service to the unbanked people’s doorstep especially in the rural areas by using the existing infrastructure of the mobile operators.

As per the proposal, owners of the outlets of the telecom operators would conduct banking transactions on behalf of the banks.

Services like cash deposit and withdrawal, remittance and small-scale loan disbursement, recovery of loans and cash payments under the government’s social safety net programme would be given through the agent banking.

Earlier, the telecom operators had expressed their eagerness to run mobile financial service but the central bank issued the MFS guidelines, barring the telecom operators from becoming part of MFS.

After making the unsuccessful bid, the telecom operators are now trying to become part of the rapidly growing agent banking service that has drawn public attention for its cost-effective transaction model.

A customer can send Tk 1,000 with just Tk 2.5 as charge through agent banking whereas transferring same amount of money through mobile financial service cost up to Tk 18.

Due to the cost-effectiveness, deposits in agent banking accounts and number of the accounts have been growing rapidly.

The amount of deposits by agent banking accountholders increased by 162.54 per cent to Tk 5,284.46 crore at the end of June of FY19 from Tk 2,012.77 crore a year ago.

Besides, the number of accounts rose by 92.22 per cent, or 16.39 lakh, to 34.17 lakh in FY19 from 17.77 lakh in the previous fiscal year.

BB has so far allowed 21 banks to run agent banking service under the agent banking guidelines in 2013.

Of them, 19 banks have already started running the service.

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