THE advent of newer and faster technology has indeed made banking operations more customer-friendly than ever; internet and mobile banking, credit and debit cards, etc have truly taken the banks to the doorsteps of their customers. However, while transactions have become more convenient, vulnerabilities of customers’ fund seem to have also heightened. In such circumstances, the responsibilities of the Bangladesh Bank, which regulates and monitors public and private banks and financial institutions, have increased manifold. As people get bombarded with offers of newer banking modes and financial services from all directions, the central bank needs to not only adjust and readjust regulations, and ensure their enforcement but also explain to, and warn, if needed, the service seekers so that they are not misled or, worse, swindled.
Payment system operation, although a relatively new phenomenon in Bangladesh, seems to be fast catching the imagination of the banking and financial service seekers, with more and more local banks joining the international banking organisations in such operations. With so many players in the market and so many services on offer, people expect the central bank to help them make the distinction between, say, mobile banking services and pay service operation clear.
There are indeed relevant regulations and guidelines about payment system operation and mobile banking service. The Bangladesh Payment and Settlement Systems Regulations 2008 of the Bangladesh Bank defines payment system operator as ‘an entity… for operating a settlement system for payment activities between participants of which the principal participant must be a schedule bank or financial institution maintaining accounts with the Bangladesh Bank for meeting Cash Reserve Requirement.’ Moreover, the Mobile Financial Service guidelines of the central bank say, in section 6, ‘Customer account, termed “Mobile Account”, will rest with the bank and will be accessible through customers’ mobile device.’ The impression that one gets from the definition and the guidelines mentioned above is that a payment system operator is not supposed to act like a bank and thus neither offer services such as cash in, cash out, deposit, utility, salary and inward foreign remittance disbursement through mobile banking, nor hold customer accounts.
However, according to a report published in New Age on June 18, which quotes some central bank officials, one particular payment system operator, bKash, is alleged to have blurred the distinction. These officials seem to believe that the payment system operator is in violation of the central bank’s rules by holding four lakh accounts. In a subsequent rejoinder to New Age, published on Thursday, bKash claimed, referring to clause 6 of the licence it has been granted by the central bank, that ‘at any point of time, the physical cash balance of bKash held by BRAC Bank Limited must be equal to the balance shown in the system of bKash digital wallet platform’ and that ‘this account shall remain under surveillance of Bangladesh Bank.’ Moreover, it claims, section 4 of the Mobile Financial Service guidelines of the central bank says that ‘the guidelines shall apply to the scheduled commercial bank and their subsidiaries.’
Simply put, the central bank’s rules and guidelines in question seem to be open to contradictory interpretations, which could be exploited to put the unsuspecting customers in the harm’s way. Hence, it is imperative for the central bank to clear the air and unequivocally assert what a payment service operator can and cannot do through requisite review of its regulations and guidelines.