Mobile banking: Reduce fees further

EditorialProthom Alo illustration

It’s a positive sign that the rate of Bangladeshi people opening Mobile Financial Service (MFS) accounts is increasing fast. People no longer need to visit faraway banks for transaction of money. Rather they can meet that need with the help of mobile banking agents close at hand.

There are quite a few MFS companies including Bkash, Nagad, Rocket and Upay in Bangladesh. Mobile banking transactions can be done using one’s mobile phone or from agent points. The service has become quite popular over the past decade.

The report on socio economic and demographic survey 2023 done by Bangladesh Bureau of Statistics (BBS) came up with the observation that among the eight divisions of the country people in Rangpur have the maximum number of mobile financial services or MFS accounts and the figure is 28.10 per cent.

Meanwhile, 24.26 per cent people have MFS accounts in Barisal division, which is in the second position. According to the demographic survey, 20.80 per cent of people in the country have their own MFS accounts.

However, the report published in Prothom Alo last December citing the final report of population and household census 2022 had mentioned the MFS user rate to be maximum 43 per cent and minimum 30 per cent. Rangpur was leading in that statistics as well.

According to Bangladesh Bank data, there were total 226 million (22.6 crore) MFS personal accounts towards the end of April this year. And there was a transaction of Tk 1.44 trillion (Tk 1.44 lakh crore) on all types of MFS accounts in last April.

The BBS report presented details about financial accounts of people aged ten or more. It stated that 47.43 per cent of the people in the country have financial accounts in banks, financial institutions, MFSs, insurances, small loan institutions, post offices, capital markets and at the department of national savings.

However, as much as 52.57 per cent of the people do not have any sort of financial accounts though. That means more than half of the country’s population is out of financial account coverage.

Any citizen engaged in a job or business has to do financial transactions. A lot of working-age people in Bangladesh are not involved in income generation activities. And, the number of women engaged in household work is the highest among them.

Usually it is the low income population that uses MFS the most. And the propensity of using this service is higher in areas with high internal migration rates. The breadwinners of these families live in cities or in areas far from home. So, they have to regularly send money to their family members and they use MFS as the easiest medium after all.

No matter how much the usage of mobile banking services has increased, their fees have not come down yet. To charge Tk 18 to 20 per thousand must be considered cruel. If a person sends Tk 1000, the recipient will get Tk 20 less. But the costs are much lower when sent through usual banking channels. In consequence, the financial pressure weighs heavier on the poor people.

We demand reduction in fees for MFS service seekers. The government can create tiers in this case. Those who will make transactions of relatively small amounts will be charged at a lower rate. As the amount of money increases, the rate of fees can be increased as well.

This method is followed in cases of water and electricity bills. This will provide at least some relief to the low income people. Hopefully, the government as well as the service providing companies will consider the matter with gravity.

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