Banks, MFS instructed to form cashless units by 31 March

Bangladesh Bank has stepped up its efforts to reduce the use of cash and expand digital transactions to the grassroots level. From now on, the central bank has instructed all banks, mobile financial services (MFS), payment service providers (PSP) and payment system operators (PSO) in the country to form a full-fledged ‘Cashless Bangladesh Unit’ at their head offices by 31 March.

The Payment Systems Department of Bangladesh Bank issued a circular on this matter today, Monday.

Regarding the goals and objectives of forming the unit, Bangladesh Bank said the government and the central bank have been taking gradual initiatives to build cashless and digital payment infrastructure across the country in order to increase the acceptance and expansion of digital transactions.

At present, transactions through Bangla QR, internet banking and point-of-sale (POS) machines are increasing significantly. To make these activities more dynamic and coordinated, it is necessary for each institution to have a dedicated unit.

Under the Cashless Bangladesh initiative, the inclusion of Bangla QR transactions has now been made mandatory in issuing and renewing licences for retailers and merchants.

Regarding the structure and manpower of the unit, the circular states that in banks the overall supervision of the unit will be carried out by a deputy managing director (DMD) or an equivalent official associated with payment system operations.

In the case of MFS, PSP and PSO institutions, an official one step below the managing director will perform this responsibility.

In terms of human resources, banks must have at least four officials in this unit, while MFS and other institutions must have at least two officials. To maintain communication with Bangladesh Bank, a deputy general manager (DGM)-rank official will serve as the ‘focal point’ in banks.

Meanwhile, in MFS and related institutions, an official two steps below the managing director will be assigned this responsibility.

In addition, for data collection and analysis, an assistant focal point must be appointed, at the level of senior principal officer (SPO) in banks and an official three steps below the managing director in MFS institutions.

The main responsibility of this unit will be to formulate target-based action plans and a roadmap to expand digital payments. They will work to expand Bangla QR, point-of-sale (POS) systems and online card payments.

The unit will also be responsible for encouraging customer registration and usage of the institution’s own apps and accelerating merchant onboarding activities across the country.

In addition, it will have to supervise cashless activities at the branch level, enhance the capacity of officials and conduct regular seminars and campaigns to raise public awareness.

Ensuring the protection of customers’ interests, resolving complaints and reducing risks associated with digital transactions have also been included in the unit’s responsibilities. At the same time, the unit will coordinate with local governments, city corporations and various commercial organisations to build the payment ecosystem.

Bangladesh Bank has instructed that all relevant institutions must form this unit by 31 March and submit detailed information to the central bank in a prescribed format.

In addition, by the last working day of March each year, institutions will have to submit the annual report on cashless activities and the minutes of the board meeting to Bangladesh Bank.