Another NEWS Review about the Launching of the National Payment Switch (NPS) in Bangladesh to facilitate online transactions in the country is the topic of this post. The Bangladesh Bank opened this gateway which will facilitate the e-commerce industry in country. This system will help to bring credit / debit cards of all the banks under a single network. The central bank (Bangladesh Bank) launched the National Payment Switch in December, 2012 which is going to revolutionize the e-commerce sector in Bangladesh in the upcoming future.
The Governor of the Bangladesh Bank, Atiur Rahman said, “The advantages of this new payment platform are enormous. E-commerce will spread across the whole country,” A customer using a credit or debit card of any bank will be able to draw cash from any ATM booth and POS (point of sales) in the country. The transaction costs will significantly go down as the transactions will be routed through the NPS instead of Visa, Master or Amex card networks abroad. Purchases and Sales can be done with these cards through the internet and web portals within the whole country.
As on December, 2012 only three banks, Dutch-Bangla, Pubali and Southeast Bank has joined the NPS so far. The rest will definitely join the platform soon. Since the system has started once, it will roll on automatically.
In the launching ceremony of the NPS, the deputy governor of Bangladesh Bank Naznin Sultana said that all the banks will join the National Payment Switch. The BB governor said the NPS will facilitate easy access to funds, an increase in tax revenue, more flow of money in the economy, and financial inclusion. BB executive director Ahsan Ullah said, “Banks will not need to pay network fees to the Visa or Master Card; they can ultimately reduce fees paid by customers,”
A little about the NPS:
- The central bank has set up the National Payment Switch (NPS) at a cost of $5 million (40 crore TK around) funded by the World Bank. It took more than three years to install it.
- Individual payment platforms introduced by different banks will be abolished once all the banks join in the common platform.
- Bankers have hailed the move, saying it will reduce their capital expenditure significantly and help deliver services to clients at a much faster pace.
Automation and Technological Development:
- Banking sector experienced remarkable progress in respect of automation in functioning in last several years in Bangladesh. For the pro-active and forward-visioning approach of Bangladesh Bank, numbers of automation initiatives have been implemented in banking sector. These initiatives include:
- To create a disciplined environment for borrowing, the automated Credit Information Bureau (CIB) service provides credit related information for prospective and existing borrowers. With this improved and efficient system, risk management will be more effective. Banks and financial institutions may furnish credit information to CIB database 24 by 7 around the year; and they can access credit reports from CIB online instantly.
- L/C Monitoring System has been introduced for preservation and using the all necessary information regarding L/C by the banks through BB website. This system allows the authorized users of banks to upload and download their L/C information.
- In terms of article 36(3) of Bangladesh Bank Order, 1972, all scheduled banks are subject to submit Weekly Statement of Position as at the close of business on every Thursday to the Department of Off-site Supervision. This statement now is submitted through on-line using the web upload service of BB website within o3 (three) working days after the reporting date which is much more time and labor efficient that the earlier manual system.
- The e-Returns service has been introduced which is An Online Portal Service for Scheduled Banks to submit Electronic Returns using predefined template for the purpose of Macro Economy Analysis through related BB Departments.
- Online Export Monitoring System is used for monitoring export of Bangladesh. Through this service, Banks and AD Branches of Banks issue & reports export report.
- Bangladesh Automated Clearing House (BACH) started to work by replacing the ancient manual clearing system which allows the inter-bank checks and similar type instruments to be settled in instant manner.
- Electronic Fund Transfer (EFT) has been introduced which facilitates the banks to make bulk payments instantly and using least paper and manpower.
- The initiation of Mobile Banking has been one of the most noteworthy advancement in banking. Through this system, franchises of banks through mobile operators can provide banking service to even the remotest corner of the country.
- Almost every commercial bank is now using their own core banking solution which has made banking very faster and efficient. Usage of plastic money has much more increased in daily life transactions. Full or partial online banking is now being practiced by almost every bank.
- Inauguration of internet trading in both of the Stock Exchanges (DSE and CSE) in the country is the most significant advancement for capital market in last several years. Micro Finance Institutions submit their reports to the regulator through the Online Report Submission Tools for MFIs.
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