BB to launch SMS-run banking
Wednesday, 27 August 2008

Aims faster remittance

Desk Report

The Bangladesh Bank has decided in principle to introduce mobile phone banking to speed up remittances from expatriates, the central bank chief said Tuesday.

The central bank has also made a draft regulation to ensure that the recipients get money through SMS service and asked banks to submit their written opinions on the regulation.
 
The decision came from a meeting presided over by Bangladesh Bank governor Salehuddin Ahmed and chief executives of the banks that in mobile banking service and Bangladesh Telecommunications Regulatory Commission officials.
 
"We are contemplating the introduction of mobile banking to speed up the remittance from expatriate workers," Salehuddin told bdnews24.com.
 
"The central bank has also made a draft regulation to put the legal framework in place," he said.
 
But, he added, the matter was at the initial stages.
 
"A final decision will be taken after the banks and BTRC submit their opinions on the matter," he said.
 
On the key issues of the draft regulation, Salehuddin said: "Nothing can be said on the matter now. We have prioritise on the issue so that the remittances are not lost."
 
Association of Bankers' Bangladesh chairman and City Bank executive director Mahmud K Sattar told bdnews24.com that they had welcomed the proposal.
 
"We will send our views on it by Sept 10," he said.
 
Foreign workers sent back a record $ 8 billion or Tk 54,700 crore in 2007-08 fiscal year, $2 billion more than the previous fiscal year, which the governor put down to moves taken to bring in more money through banking channels, including measures against hundi transactions.
 
But, he conceded, a large amount of money was still coming from abroad through illegal routes, as sending foreign remittance through banks still proved costlier and time-consuming.
 
The initiative is being considered with the interests of remittance-receiving customers in mind, Salehuddin said.
 
A senior central bank official, speaking on condition of anonymity as he is not authorised to speak to media, told bdnews24.com that mobile phone operators Grameenphone and Banglalink had shown interest to offer the service in collaboration with banks.
 
He said a Bangladesh Bank delegation visited the Philippines last year to see how remittance was sent to the country through SMS banking.
 
The official said Bangladesh Bank was also looking into allowing foreign workers to send money by a similar process.
 
On how the system may work, he said: "According to the proposal, the branches or exchange houses of the banks in different countries will instantly inform a local bank or exchange house of the amount being sent by an expatriate worker."
 
"After that the bank or exchange house concerned will inform the recipient of the remittance through an SMS, and will request the recipient to collect the money from a specified booth of [the mobile phone company]."
 
The Bangladesh Bank governor said an 'airtight' legal framework would be put in place so that the hard-earned money of overseas workers was not lost through the process in any way.
 
Salehuddin said the country would certainly be less dependent on foreign aid and the economy would get a lift if more remittance came through the proper channels.
 
Asked when an agreement on mobile banking could be expected, he said: "Nothing can be said definitely yet. We have to formulate the legal framework first. A decision will be taken after that."

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