Bangladesh Bank has recommended opening up services to all banks, financial institutions and mobile financial service (MFS) institutions by reducing single-party dependence in the financial transactions of private educational institutions.
The central bank made this recommendation in a recent letter sent to the Ministry of Education.
According to relevant sources, the 'Financial Transparency and Accountability Policy of Private Educational Institutions' issued by the Ministry of Education in February this year includes a provision for receiving all types of income including salaries, fees, various charges and grants of educational institutions through Sonali Bank's Sonali Payment Gateway (SPG) or the gateway of any other government-owned bank.
However, Bangladesh Bank believes that managing the financial transactions of a large number of educational institutions through a single gateway can be risky.
In the letter, the central bank mentioned that there is a risk of disruption in the quality of service if the pressure of collecting fees and other charges from thousands of private educational institutions in the country falls solely on Sonali Payment Gateway.
In addition, if any technical error or system failure occurs, the entire collection process may come to a standstill, which will cause suffering for all - students, guardians and educational institutions.
For this reason, the central bank has proposed to open the fee collection system to all payment gateways licensed by Bangladesh Bank, instead of limiting it to just one payment gateway.
According to them, if such an open system is introduced, single dominance will decrease, competition will increase and users will get better and uninterrupted services.
Bangladesh Bank says that currently 10 licensed payment system operators are operating in the country.
In addition, several private banks are also providing modern and technology-based payment gateway services. The 'Education Management System' of many of these institutions is more advanced, user-friendly and technologically rich than the government gateway.
The recommendation also states that if alternative payment channels are introduced for students to pay fees, they will be able to pay through banks, digital payment gateways or MFS at their convenience.
This will reduce the suffering of guardians and increase the use of digital financial services.
Apart from this, the central bank has also emphasized on increasing the use of internet banking fund transfer and electronic fund transfer (EFT) system instead of the conventional cross check for large financial transactions.
On February 6, the Ministry of Education issued the 'Financial Transparency and Accountability Policy for Private Educational Institutions'. Article 5(a) of the policy requires educational institutions to receive all types of income through designated bank accounts or through the Sonali Payment Gateway or any other government-owned bank gateway.
Now, Bangladesh Bank has proposed to amend that provision and ensure the participation of all licensed payment gateways.
Sector stakeholders believe that if this recommendation of the central bank is implemented, transparency and accountability in the financial management of educational institutions will increase further.
At the same time, healthy competition will be created in the market, the quality of service will improve and the transaction costs will also be reduced.
