Inter-bank fund transfer thru’ ATMs starts from June

Inter-bank fund transfers through automated teller machines will be made available to customers from June, in another boost to help build a cashless economy.

 To this effect, the central bank in mid-February asked all banks to connect their ATMs to the National Payment Switch Bangladesh (NPSB) in June.

Islami Bank Bangladesh Ltd and Pubali Bank have recently successfully completed transferring funds to other banks through their ATMs.  The ATMs will become a digital cash counter, helping clients withdraw and transfer funds without placing any cheque or paper-based documents, a BB official said.

 Mohammad Ali, deputy managing director of Pubali Bank, told The Daily Star that even funds from credit cards can be transferred using the new system. Fund transfers will be settled instantly and customers will be informed simultaneously through SMS, he added.

 The real-time gross settlement system of the Bangladesh Bank will also allow the instant transfers of amounts below Tk 1 lakh from Tk 1 lakh and above now.

Ali said the initiative would discourage the use of banknotes and boost the penetration of credit and debit cards, ultimately helping build a cashless society.

The central bank is yet to set any service charge but it will not be that high considering the existing one for ATM fund withdrawals, the BB official said.

The BB earlier set Tk 15 as the charge for each inter-bank transaction through ATMs under the NPSB. Until February, 54 of the country's 57 banks issued as much as 1.18 lakh debit cards, 9.53 lakh credit cards, and 1.50 lakh prepaid cards. They have set up 9,586 ATM booths. The central bank introduced the NPSB in 2012 with a view to upgrading inter-bank electronic payments.

The NPSB is now playing the role of a “mother switch” and will gradually connect all “child switches” owned or shared by banks. The child switches are ATMs, points of sale, e-commerce, internet banking, mobile banking and other online banking services offered by banks.