Axiata-Trust Bank JV gets nod to launch MFS
A joint venture of Trust Bank and Malaysia’s Axiata Group is set to roll out a new kind of mobile financial service in Bangladesh after it received a no-objection certificate from the central bank yesterday.
The Kuala Lumpur-based group is the parent company of Bangladesh’s second largest mobile phone operator Robi and controls 68.7 percent stake. Robi has 4.79 crore active subscribers.
Axiata Digital Ltd, the digital services arm of the group, has partnered with Trust Bank Limited, a private commercial bank, to join the growing MFS sector.
The joint venture is planning to promote wallet-based services, which will ultimately help expedite financial inclusion in the country, Faruq Mainuddin Ahmed, managing director of Trust Bank, told The Daily Star yesterday.
In 2015 both parties reached a consensus and decided to form a joint venture company styled Trust Axiata Digital Ltd, where the bank would hold 51 percent stake.
The entity’s initial paid-up capital has been proposed to be Tk 45 crore.
Axiata Digital currently offers digital financial services in Malaysia, Sri Lanka, Cambodia and Indonesia – the countries where Axiata Group has mobile business. In these markets, Axiata Digital is offering various savings products and fixed deposit. Even customers can get business loans through accounts.
As mobile phone operators in Bangladesh can not run MFS on their own, Robi has not been part of the joint venture.
A senior official of Trust Bank says they have got a year and within the timeframe they will get the joint venture registered. The board will comprise four members from the bank and three from Axiata.
He also said some senior officials from Axiata Digital will come to Dhaka to design products.
Of the 57 banks in Bangladesh, only Brac Bank has set up a subsidiary, bKash, to operate MFS.
Currently, there are 16 MFS providers in the country.
As of June, there were 7.21 crore registered MFS accounts. Of them, 3.24 crore are active users.
The volume of transaction was Tk 31,708 crore in June and Tk 42,236 crore in May.
Currently, many companies pay salaries and wages to their employees and staff through MFS accounts. The government also accepts various fees and charges. Thanks to the MFSs, users can pay various bills and use mobile wallets to buy goods and services and the number is growing rapidly.
Trust Bank started its journey in 1999 and has a network of 111 branches, SME centres, 222 automated teller machine booths, more than 20,000 pay points and 65 points of sale.
The bank introduced automated branch banking in 2001 and online banking in 2007. Its paid-up capital is nearly Tk 469 crore and was listed on the stock exchanges in 2007.