The Government e-Transaction Processing Hub (GeTPH), a platform introduced by the central bank in 2019, has further strengthened its efforts of financial inclusion by disbursing funds electronically through the Bangladesh Electronic Fund Transfer Network (BEFTN).
Transactions through the GeTPH saw a 159% year-on-year growth in 2021, with transactions reaching up to Tk92,139 crore, partly due to the government increasing the disbursal of salaries of public employees and financial support to marginalized and vulnerable populations and students.
As per data by the Bangladesh Bank, around 26.7 million individuals under 16 social safety net programs are now receiving funds through the digital platform as beneficiaries.
They can access the funds through accounts with either banks or mobile financial service (MFS) providers, which is stored as data within the GeTPH platform’s servers.
According to a central bank official, digitization in this kind of disbursement has cut down on data manipulation of beneficiaries by corrupt individuals attempting to embezzle public funds, as it directly sends the money into the account of the beneficiary after receiving funds from the government.
Additionally, the transfer of funds takes much less time than before, cutting down on time taken by banks in the verification process that used to be a paper-based manual system, the central banker also said.
Previously, the manual system took three to six months to settle the monthly payments in favour of the beneficiaries.
However, the government started to depend on BEFTN transfers partially in 2015 disbursing employee salaries instead of the manual system enabling it to clear funds off within a span of 3-5 days.
Initially, the central bank had a settlement rate of 115,000 transactions per day, but following the official launch of GeTPH in December of 2019, it has crossed the rate of settling 600,000 transactions per hour.
The GeTPH also allowed the government to disburse funds without putting the beneficiaries at any health risk following the advent of the pandemic as well as cutting down government expenses.
Prior to the digital transaction framework, the government had to depend on a good number of employees to process transactions, shelling out 25% on every disbursement that was done manually.
However, now there are no additional costs as transfers take place through bank accounts and the government only counts 0.70% cost when disbursed through MFS.
Additionally, the platform is highly secure as transaction-related data is sent following an encrypted model.