The country's mobile financial services (MFS) sector began its journey over a decade ago in 2011, to provide access to low-cost digital financial services to the informal sector demographic, especially in rural areas.
“The digital financial sector, specifically MFS, has seen significant growth, propelling us towards a cashless society, while having a major socioeconomic impact on both formal and informal as well as urban and rural demographic,'' Dr Ashikur Rahman, senior economist at Policy Research Institute (PRI), told Dhaka Tribune.
However, financial interoperability among the platforms would be crucial in maximizing the benefits of financial inclusion, according to the former Bangladesh Bank governor Atiur Rahman.
Financial interoperability is crucial for maximizing the benefits of financial inclusion, he had said during the inaugural session of a training program "Financial Interoperability in Bangladesh: Challenges and Way Forward" organized jointly by the PRI and the Economic Reporters' Forum (ERF).
Highlighting the role of MFS and agent banking in bringing financial inclusion, Atiur also said that financial interoperability will infuse dynamism in the economy and growth will be further strengthened.
Financial interoperability is necessary to adapt to the evolving changes, and initiative needs to be taken so that the common people can make transactions in shops through scanning QR codes, the former central bank governor observed.
But the government will have to develop the necessary infrastructures in this regard, and make investments like its neighboring country India that had invested huge amounts in introducing such a system, according to the senior economist.
If private companies make the investments instead of the government, then they would charge the clients accordingly which will adversely impact the sustainability of the system. For this, there is a need to make proper allocations in the budget for this, Atiur pointed out.
Currently, the sector has 13 MFS players that provide digital financial services to over 11 crore customers who make 1 crore transactions per day, worth Tk2,300 crore.
The country even saw the rise of its first unicorn through the pioneer MFS provider bKash, a subsidiary of Brac Bank that currently has over 5 crore customers and its daily transactions stand at over Tk1,000 crore.
Meanwhile Nagad, which was launched in 2019 has already become the second-largest player in the sector. Rocket, an MFS of Dutch Bangla Bank Limited holds the third position in the category.
Experts said that digital financial services have made a positive impact on poverty alleviation and on personal savings, however transaction and exchange of information that took place so far were not interoperable, rather it was interconnection.
Financial interoperability allows for direct transactions between the clients of two separate MFS companies as well as two separate banks.
The central bank inaugurated interoperability among the MFS platforms in October 2020, but was discontinued just hours after its launch, and remains unrestored ever since.
The ICT Ministry, through a2i, has developed several software including an interoperable transaction platform “Binimoy” that was supposed to go live last month, through which money can be sent to any bank from any existing MFS.
ICT State Minister Zunaid Ahmed Palak had previously said that bKash and 15 other banks have already signed up for the platform Binimoy, which will eventually automate credit rating, credit scoring in the future.
But it has been delayed as well.
According to PRI Research Director MA Razzaque, financial transactions in the country would be far simpler, competitive and innovative once financial interoperability is restored or other necessary frameworks are implemented.
