• Saturday, October 25, 2014

Prime Bank loses mobile banking licence

Sajjadur Rahman

The central bank yesterday cancelled Prime Bank's mobile banking licence due to “gross violations of rules” by the company that Prime had appointed to run the service.
“The central bank was not satisfied with Prime Bank's response. So, we have formally withdrawn our NOC [no objection certificate] for the bank's mobile banking service,” said Dasgupta Asim Kumar, executive director of Bangladesh Bank.
The board of directors of Prime Bank also took the issue seriously and decided to launch an investigation to identify the culprits within the bank responsible for the irregularities.
Like many other banks, Prime Bank received BB's approval to run mobile banking in 2010-11. Later, Prime appointed SMG Infocom International as its mobile banking partner in 2011. According to the bank, SMG was supposed to build infrastructure and appoint agents to operate the service.
SMG in 2012 ran ads in newspapers for appointment of agents in district, upazila and union parishads, using Prime Bank's logo.
Assessing SMG's balance sheet, the BB investigation found that the company took Tk 7,000 to Tk 100,000 from each agent appointed, in gross violation of rules.
SMG appointed 25,000 agents and collected over Tk 15 crore from them, the BB official said.
When the agents found the SMG office shut early last year, they contacted Prime Bank. The bank told them that it was not responsible for it. Later, many of the agents lodged complaints with the BB that detected gross violations in the consequent investigations.
“When we came to know that SMG was taking money for appointing agents, we issued them letters asking to pay back the money. We had also run a notice in the newspapers in this regard,” Ehsan Khashru, managing director of Prime Bank, told The Daily Star.
Asim Kumar, however, said mobile banking is a bank-led model in Bangladesh and the banks must take responsibility.

“All responsibilities in this case fall on Prime Bank and we have asked it to pay back the money taken through agent appointments,” he said.
Azam J Chowdhury, chairman of Prime Bank, told The Daily Star that the board would carry out an investigation to find out culprits in the bank.
“No-one will be spared, we'll punish the people responsible for these irregularities,” Chowdhury said.
The BB issued guidelines for mobile banking in 2009 and subsequently allowed 28 banks to offer the service. Formal mobile banking, however, began in 2011 with Brac Bank's venture, bKash.

Published: 12:00 am Thursday, August 07, 2014

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