Bank accounts in just 5 minutes
Maya Begum, 35, a poor woman from the remote area of Amirganj union of Raipura, Narsingdi had no idea how to open a bank account. Despite that, last month she opened a bank account with the NRB Commercial Bank in a matter of just five minutes. She was amazed as it did not require a single paper to open the account.
The only thing Maya had to do was to provide her fingerprint at the NRBC bank’s agent banking centre. Her identity and information saved in the Election Commission (EC) server was automatically provided to the agent.
'I don't know anything about bank accounts, but I require a bank account to receive my government allowance. I went to the agent, gave my fingerprint and now have a bank account," Maya said.
Normally it takes several days to open a bank account where a client has to spend about 30 minutes to fill a 'Know Your Customer' (KYC) form including 50-70 questions which is later verified by the specific bank's central office.
Bangladesh Bank is going to launch the electronic-KYC system in January. The privilege would be available at the banks’ branches, booths and with the agents. Pilot projects have been run at 50 areas in 33 districts.
"We've collected the KYCs through the fingerprints of pilot projects. Accounts are being opened in five minutes," Nazmul Alam, an agent at Amirgamj union told Prothom Alo.
This digital service is running in countries including India, Malaysia, and Thailand. Bangladesh Bank formed a committee for e-KYC in October 2016. The issue came to the fore due to the necessity of bank accounts required to receive government allowances.
Backward people can easily be brought under the banking services thanks to e-KYC, said Anwarul Islam, general manager of the Financial Inclusion Division of the Central Bank. Bangladesh will progress in financial inclusion and gradually the service will be open for all, he added.
Initiatives have been taken to provide various government allowances through banks. Some Tk 743.67 billion has been allocated for the sector in the current fiscal while the number of the existing 7.6 million people receiving the grants will be increased to 8.9 million.
The e-KYC system will be completed in four phases. The NID, date of birth will be identified by biometric system tracing fingerprints, face or eye recognition. The whole process will be carried out using special software on a tablet computer at the branches of the banks or with the agents.
After the identity verification via the EC server, information including the names of the client and his/her parents, sex, and profession, contact and nominee have to be provided. The NID information will be included in the KYC form automatically. Then the client's photo will be taken. The bank will then send a confirmation SMS to the client's mobile. The whole process is completed online.
Though accounts can be opened via e-KYC, big transactions cannot be carried out at this phase. Financial services like bKash, Rocket can be available through the service. Transactions must not cross Tk 100,000 under the agent banking system while not more than Tk 500,000 can be credited or deposited. The same amount could be invested in savings certificates and other government bonds.
A total of 1,750 bank accounts have been opened with 16 banks, bKash, and Rocket and another financial institution under e-KYC in September. Each of the e-KYC took five minutes. The banks opened the services using agent banking system.
Sonali Bank, Agrani Bank, Rupali Bank, Janata Bank, Bank Asia, NRB Commercial Bank, Islamic Bank, Mercantile Bank, Trust Bank, Mutual Trust Bank, One Bank, BRAC, First Security Bank, United Commercial Bank, the City Bank, IFIC Bank and IDLC were among the banks and institutions under the project.
"We've opened 100 bank accounts under a pilot project. Accounts are being opened far faster than earlier. There is no alternative to this for including the people in banking services," said Mashrur Arefin, managing director of City Bank.
According to the Global Findex Index-2017, some 30 per cent people among the adults of Bangladesh had bank accounts in 2011 which rose to 40 per cent in 2017. Due to mobile banking services, the ratio was 50 per cent.
Bank officials consider e-KYC will reduce the illegal use of the money that lies out of the banks. Proper banking channels would stop illegal transactions with the increased involvement in e-KYC system, they consider.
According to Bangladesh Bank's former deputy governmor Khondokar Ibrahim Khaled, if more people are included in the banking system it will impact the economy. This will reduce informal transactions as well as the use of illegal money, he observed.
*This piece, originally appearing in Prothom Alo print edition, has been rewritten in English by Nusrat Nowrin.