Number of accounts drops amid purge
The number of active mobile financial service (MFS) accounts has decreased by 9.72 lakh in a month as the banking watchdog has strengthened monitoring to cut suspicious transactions.
The number of active mobile wallets stood at 2.96 crore at the end of August, down from 3.05 crore in July, according to Bangladesh Bank data.
However, the number of registered clients increased slightly by 1 percent to 6.46 crore in August from the previous month.
The MFS providers closed the accounts which have failed to comply with the regulatory rules, said Dasgupta Asim Kumar, an adviser of bKash, the largest firm to provide the service in the country.
Bangladesh Bank has taken an initiative to identify and close the accounts, which are suspicious and have been inactive for three months, he said.
However, the fall in MFS accounts' number did not leave any impact on the use of such payment channels.
The average daily transaction through mobile wallets rose by 11.7 percent to Tk 1,109 crore in August compared to that the previous month, according to central bank data.
Inward remittance through mobile channels hit Tk 31.74 crore in August, an increase by 116 percent from Tk 14.70 crore in July.
The number of MFS accounts had also seen a fall from August last year to January this year when Bangladesh Bank put a restriction on having more than one account for a client.
The BB also lowered the daily transaction ceiling for each mobile banking account, saying a maximum of Tk 15,000 can be deposited and Tk 10,000 taken out. Previously it was Tk 25,000 for both.
The central bank also set Tk 3 lakh as the highest amount that could be deposited in such an account.
At the same time, the MFS providers were directed not to open more than one account per national identification card. Intended to curb misuse of the channel, the directives came into effect in February the same year. Active mobile money accounts declined by a third to 2.07 crore in January this year from its peak of 3.07 crore in August last year, according to the central bank data.
The number of such account users started to increase in February this year and reached 3.05 crore in July.
The number of registered MFS accountholders in proportion to the population rose to 38 percent in 2017 which was only 3 percent in 2014, according to a study of the Bangladesh Institute of Bank Management.
This is higher than the South Asian average of 33 percent and the global lower middle-income country's average of 27 percent, according to the recent study titled “Money laundering vulnerabilities in new payment systems: Bangladesh context”.
Improper KYC (Know Your Customer) by agents is the main reason for these anonymous transactions, the study found. However, the selection of agents is one of the important challenges in MFS and people are using the channel for cross border transactions like hundi to remit foreign fund which is illegal, according to the study.
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