Regulatory Guidelines for Mobile Financial Services (MFS) in Bangladesh
Bangladesh Bank has decided in principle to licence new banking companies in the private sector pursuant to section 31 of the Bangladesh Banking Companies Act, 1991 after considering the need and overall strategy congenial to effective monetary and financial sector policy for the country. Terms and conditions for establishment of the new bank are given in the website of Bangladesh bank.
The financial sector in Bangladesh has undergone tremendous growth in volume and complexity over the recent years. However despite impressive growth gains in capital base, income, return on equity and other areas, the financial sector remains lagging in reaching out with adequate financial services to large swathes of farm and non-farm economic activities of low income rural and urban population in Bangladesh. Rapid country-wide expansion of Mobile phone networks and Bangladesh Bank led modernization of the country’s Payments system and financial sector IT infrastructure have opened up opportunities for innovating mobile phone based cost efficient modes of off-branch financial service delivery to the underserved population segments. Bangladesh Bank (BB) is issuing these regulatory guidelines for Mobile phone based Financial Service (MFS) platforms in Bangladesh with a view to providing an orderly, enabling and competitive environment for utilizing this new window of opportunity of innovatively extending the outreach of financial services.
In Bangladesh about 25 million customers use mobile banking, of which not all are registered customers. It is important to mention that the number of customers and agents has been growing exponentially. Despite the rapid development of mobile finance services, around 60% of the populations, especially in rural areas, are yet to subscribe to mobile banking services.