Research launched on electronic wage payment system for garment workers

Sohail RK Hussain, managing director of City Bank, attends the launch of a research project by the bank and Innovations for Poverty Action (IPA), on the electronic wage payment system for garment workers, at Westin hotel in Dhaka yesterday. Shoraez Shahjahan, country director of IPA, was also present. Photo: Star

City Bank and Innovations for Poverty Action (IPA), an American non-government organisation, yesterday launched a research project to analyse the benefits of electronic wage payment system for garment workers.

The research—the real effect of electronic wage payments: a field experiment with salaried factory workers in Bangladesh—will be conducted in partnership with the development economic research wing of the World Bank.

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The programme was held at the Westin hotel in the city.

The project was taken as part of the government's vision to bring the unbanked people into the banking channel, said Sohail RK Hussain, managing director of City Bank.

The project will help open a separate banking such as a garment banking unit in future, Hussain said.

The research will focus on the behavioural change of garment workers, who have access to financial institutions and systems like banks, ATM services, said Mashrur Arefin, deputy managing director of the bank.

As part of the project, City Bank has opened accounts for garment workers in cooperation with garment factory managements and installed ATMs at the factory premises with no charges, Arefin said. The study will shed light on three aspects of the ongoing policy debate, according to IPA. 

First, how useful is the electronic wage payment system as a stepping stone into the formal financial system? Second, can providing electronic deposit services be beneficial for employers to increase productivity and cut transaction cost? Third, what are some of the practical obstacles that slow down adoption of the electronic wage payment system?

Shoraez Shahjahan, country director of IPA, was also present.