Citi launches roadshow on e-fund transfer | The Daily Star
12:00 AM, August 27, 2014 / LAST MODIFIED: 01:53 AM, March 08, 2015

Citi launches roadshow on e-fund transfer

Citi launches roadshow on e-fund transfer

Banks are yet to fully embrace the electronic fund transfer (EFT) services even four years after its launch due to lack of awareness and incentives among bankers about the cost effective, quicker and secure system.

As a result, only 5 percent of all banking transactions are cleared through the electronic system, leaving the rest to costly and time consuming paper-based system.

The use of EFT in the Asia Pacific is however as high as 85 percent, said Noel Saminathan, managing director and head of cash product at US-based Citibank for Southeast Asia.

It is now the banks' prerogative to embed the system into their processes, he said.

Saminathan spoke at the inauguration of a roadshow on EFT organised by Citi at the Westin hotel in the capital.

"Only 18 transactions were processed through EFT per day when the system was launched in 2011. Now, 55,000 transactions are cleared everyday," said Nazneen Sultana, deputy governor of Bangladesh Bank.

The electronic payment system is no longer a new concept in the country, but a reality, she said after inaugurating the show.

The EFT is a robust, costless and secure system, which allows banks to settle transactions easily, said KM Abdul Wadood, general manager for payment system department of Bangladesh Bank.

However, the growth of EFT is not satisfactory, and the central bank is poised to begin the Real Time Gross Settlement in 2015, which will clear transactions within 2-3 minutes of initiation, from the current time requirement of one working day, he said.

Some banks are charging a fee for EFT service even though Bangladesh Bank has made it cost-free, Moinul Huq, head of treasury and trade services of Citi, said during the panel discussion. 

It would not be wise of the banks to try to make money out of EFT, said AKM Shirin, deputy managing director of Dutch Bangla Bank.

He called for improvement of the cheque clearance system so transactions can be processed on the same day as the initiation. The top management of banks should make officials aware about the system, he said.

Most banks have been doing manual banking for a long time and are not properly aware of the benefits of EFT, said Mohammad Akhlasuddin, deputy director of payment systems department of the central bank.

"They need to be trained. The mentality of the rural branches has to be changed as they do not want to do EFT since there is no fee involved."  

The objective of the Citi roadshow is to reduce paper-based processing from the entire payment industry and thus boost efficiency in the economic system, said Rashed Maqsood, Citi country officer for Bangladesh.

Through the initiative, Citi hopes to stimulate further utilisation of the EFT system across the country in conjunction with the digital initiatives of Bangladesh Bank.

Under the roadshow, five workshops will be organised this year in the country's major collection and payment centres -- Bogra, Jessore, Comilla, Mymensingh and Sylhet. Citi Bangladesh has been a frontrunner in promoting the EFT to its clients and their payers since the inception of the system.

Currently, it processes about Tk 270 crore worth of payments through the EFT every month and receives Tk 240 crore of incoming EFT in favour of its clients in the same duration. Its electronic to paper ratio is over 40 percent in both payments and collections.

The central bank introduced the automated cheque clearing system in October 2010 under its Bangladesh Electronic Fund Transfer Network (BEFTN). The EFT is gaining popularity among the corporate and government bodies, according to the central bank website. Salary of more than 28 ministries and government offices are now paid through EFT. Listed public companies are also paying their cash dividends through the EFT network.

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