Bangladesh switches fast to digital financial transactions

Bangladesh_ the emerging south asian growing economy_ is switching over fast to digital financial transactions from the conventional banking system_ marking a phenomenal growth of 85% in a segment last August.

Officials said the digital financial transactions in the country had shown a robust growth during the past one year to August_ replacing the conventional banking transactions faster than expected of the banking industry.

The transactions processed through Bangladesh Bank's large-value payments segment_ known as Real Time Gross Settlement (RTGS)_ recorded a growth of 85% by the number of transactions in August over the same period a year before.

Internet transactions grew 59% to BDT 108.25 billion in August 2021_ according to central bank statistics. The number of internet bank users increased by 31% to 3.8 million in the month.

Bangladesh Electronic Funds Transfer Network (BEFTN ) transactions surged 23% by the number of transactions. By volume the dealings spiked by 68% during the period under review.

Transaction by cards (local and foreign) increased by 53.5% by number and 36.4% by volume_ the central bank statistics showed.

Mobile Financial Service or MFS all transactions by volume also swelled over 50% to BDT 622.3 billion in August. All transaction means cash-in_ cash-out and salary payments etc. But its accounts registered both in urban and rural areas by more than 11 per cent.

Bankers say this growth was achieved on the back of coronavirus pandemic that forced the clients to stay home_ and prompted quick digitization of economic activities_ notably supply chains and financial devices as well medical services.

Many banks also offered app-based banking alongside other entities offering innovative payment solutions for accepting digital transactions.

Bangladesh Bank did shut one mechanism of the digital settlement systems named RTGS (real-time gross settlements) in April_ at a time when the economy almost halted.

Shamsuddin Haider Dalim_ head of corporate communications at bKash_ a popular MFS in Bangladesh_ said that the Covid situation forced many to go onto digital platforms.

He said the remittance inflow_ talktime purchase_ utility bill payments were the transactions in the MFS.

"This rising trend would increase further in the days to come_" he noted.

Like in many developed and developing countries_ the Internet in Bangladesh has witnessed significant growth in recent years facing many constraints in expanding access and use.

The total number of internet subscribers reached 125.46 million at the end of August 2021. Mobile internet users stood at 115.41 million while ISP plus PSTN at 10.05 million.

In February 2018_ Bangladesh started the 4G network services to add up speeds and dimensions to the information superhighway facilitating activity in the fastest-growing sector of economy and lifestyle.