In order to make the country’s Post Office Savings Bank popular and ensure reliable and smooth transaction of money steps have been taken to reduce the online transaction cost.
It has been learnt that, with the introduction of a new online financial service programme titled ‘Nagad’ by Bangladesh Post Office (BPO) the cost of wiring money through different services of savings bank of state owned BPO has been reduced by 72 percent. Earlier, the service charge was 1.85 percent but after the reduction of the new scheme it now stands at .50 percent.
To this end finance ministry has already issued a notification of Tuesday which has reached the head office of postal department on Wednesday.
Experts say with this new service Bangladesh Post Office (BPO) will be able to bring more unbanked people under financial service.
Sources said this decision will be implement soon. Steps are undergoing to send this notification to all the postal branch offices. Once the decision becomes effective, this will make easier money transfer with a reduced cost. Customers will be benefited and money transfer will increase through postal services.
According to postal department sources, post office provides Electric Money Transfer Service (EMTS), Mobile Money Order Service, Post E-Centre Service and other services through Postal Saving Bank online. There are around 10,000 branches across the country, meaning each union has at least one postal branch. All branches are now under online service. These branches already transact hundred crore taka each month. On the other hand, Post Office Saving Bank transact Tk 9000 crore each month. But now the amounts will certainly increase.
As per the new notification, through e-money order, Tk 100 to Tk 50000 (highest) can be transferred at a service charge of Tk 0.50. Lowest service charge is kept at Tk 10 against the previous Tk 15. It means, now transaction of Tk 100 to Tk 10000 will require only Tk 10 as transaction charge. While other mobile institutions take Tk 18 per each Tk 1000 transacted, meaning, they charge Tk 200 to transfer Tk 10000 while postal service will charge only Tk 10, the source added.
Earlier, former Bangladesh Bank governor Dr Farasuddin said, service charges in the mobile financial services are high and should be reduced at the earliest. However, the central bank is yet to take a step in this regard.
Through postal service, customers will be able to transfer Tk 50000 while mobile financial services do not allow such big amount. Customers on the other hand, can easily withdraw the amount from any branch.
To this end, former central bank governor Dr Salehuddin Ahmed said, reduced service charge will increase money transaction. If transaction rises, it will certainly contribute to the country’s GDP.
Mobile money transfer requires a personal account, while postal service will only require the customer’s mobile and national identity card numbers.
However, banking sector insiders fear the increased transaction limit in ‘Nagad’ service may call on an anarchic situation in the market as it will create an uneven completion between Nagad and other mobile financial services. They also apprehend this will pave way for illegal money laundering and terrorist financing.
Under this service, customer will be able to cash in or cash out up to Tk 50,000 in a single transaction and maximum Tk 250,000 in 10 transactions per day. But as per the mobile financial services (MFS) regulations, one individual can cash in a maximum of Tk 15,000 via two transactions and cash out a maximum of Tk 10,000 in same number of transactions a day.
It is to be noted, MFS operations are monitored by Bangladesh Bank and there is a transaction limit there. A BPO official seeking anonymity said the newly introduced service will be under “Bangladesh Postal Act Amendment 2010” and will not come under the MFS regulations of the central bank.
Experts opined that the new platform may be used for extortion, money laundering, terrorist financing and illegal hundi business due to the lack of regulatory monitoring and oversight. However, BPO claims that the institution is well-equipped to handle any misuse that may hinder its progress as it has prior experience of financial transactions.