Welcoming the government’s initiative to establish a Digital Bank, the businessmen of the technology sector have expressed disappointment over not taking the opinion of the technology sector and ensuring the participation of technology entrepreneurs in this important initiative of creating a smart and cashless Bangladesh.
They expressed their disappointment at a roundtable discussion on ‘Digital Bank: Prospects and Way Forward’ organized by Bangladesh Association of Software and Information Services (BASIS) at the BASIS Conference Center on Wednesday (June 14). Representatives from more than 50 fintech companies, financial software companies, banks and mobile financial institutions were present in the discussion.
Fahim Mashroor, a former president of BASIS and Chairman of the fintech committee conducted the round table discussion while the keynote presentation was made by the Chief Executive of fintech company Tali’pay Dr. Shahadat Khan. The BASIS president Russell T. Ahmed presided over the event.
In the discussion, the speakers said that it would be wrong to think that Digital Bank is only an improved digital version of ordinary bank. In other countries around the world, digital banks have been able to revolutionize financial inclusion as the use of technology has been the driving force, led by technology entrepreneurs. If digital bank policy or license is made like traditional bank system in our country, then the main purpose of establishing digital bank will not be achieved. BASIS president applauded Bangladesh Bank’s initiative to establish a digital bank and presented several recommendations on behalf of BASIS for creating digital bank license guidelines.
BASIS president Russell T Ahmed said, the more the digital bank license can be opened, the more innovation will come in this field. Specific conditions may be given if required. There should be a requirement for at least one-third of the ownership of each digital bank to be owned by technology sector organizations or entrepreneurs. Banking experience should not be mandatory to become CEO of Digital Bank. As technology entrepreneurs in Bangladesh have successfully used technology to bring new innovations in the field of mobile financial services, digital banks should also be created under the leadership of technology entrepreneurs. Of course they will work with bankers as per their requirement. In this case, the government should take necessary initiatives to ensure that the new digital bank license is not limited to only large corporate groups.
The main presenter of the discussion Dr. Shahadat Khan cites examples of how digital banks in other countries have brought large unbanked populations into banking services. He said, currently the most deprived from banking services are traders involved in small and cottage industries. No bank wants to give them a loan because they don’t have any information about them. These small entrepreneurs are forced to take loans from NGOs at 24% interest per annum. Digital Bank can provide banking services to this large population at a much lower rate. It requires smartphone technology, data technology and artificial intelligence. Appropriate use of these technologies requires innovative technology entrepreneurs and technology professionals to lead digital banking. For successful implementation of Digital Bank we need some preparations like Personal Identity Authentication, Comprehensive credit bureau with real time interoperable payments and data from all lending institutions. In this regard, National e-KYC and Bangla QR based ‘Cashless Bangladesh’ initiative will play an important role. For this, everyone including banks, fintech institutions and regulators have to work together.
Arfan Ali, head of fintech firm Zaytun and former MD of Bank Asia; Zakaria Swapan, head of Priya-Pay; Siraj Siddique, director of credit card network Visa; Manzoor Mahbub, president of Datasoft; Fida Haque, head of SurjaPay; BRAC Bank’s Chief Operating Officer Sabbir Hossain and others also spoke on the occasion.
