Speakers at a webinar have praised the role of Bangladesh Bank (BB) for enhancing financial inclusion and women's access to finance in Bangladesh in different dimensions. They said that the central bank has brought non-government organizations (NGOs), Financial Institutions (FIs) which are working in the rural areas with the marginal people into the net of financial coverage. A large number of women and unbanked population (who do not use or do not have access to any traditional financial services) were brought under financial access facilities, allowing those who were unable to avail lending facility from banks due to lack of documents to get loans, the speakers said. Also read: Speakers for replicating RMG success model to boost plastic sector The speakers came up with the remarks while speaking at a webinar on 'Financial Inclusion in Bangladesh with different dimensions' organized by Entrepreneurial Economists club of Dhaka School of Economics, held on Saturday. Anis A. Khan ,former managing director, Mutual Trust bank limited joined the webinar as the chief guest, while Md.Mostafizur Rahman Sarder, Executive Director(PRL) ,Bangladesh Bank and Dr. Yashoda Krishna Durge, GNVS Institute of Management, India were special guests. Also read: BB to release new notes of Tk23000 crore ahead of Eid Macroeconomic expert and Coordinator, department of Entrepreneurial Economics Prof Muhammad Mahboob Ali chaired the session.

Financial inclusion in Bangladesh has witnessed ‘miraculous’ progress in 50 years, particularly since the advent of mobile financial services (MFS), till now that nearly 90 percent of the population is estimated to be covered by the formal banking system, MFS, and microfinance institutions (MFIs), according to the man who made financial inclusion a centrepiece of central bank policy. Most experts agree that Bangladesh Bank’s policy support and realistic measures for enhancing common people's access to the financial sector have helped the country to reach such a position. The central bank’s thrust in this regard began during the reign of Dr. Atiur Rahman, who served as governor from 2009-15. In the six years since he left, the central bank has carried forward his vision. As a policy, financial inclusion is recognized to have significant potential for improving the well-being for all, and especially for participants who belong to the poor and marginalised groups. According to the World Bank’s 2017 Findex report, which looked at financial inclusion, the percentage of adults with financial accounts in Bangladesh rose from 31 percent in 2014 to 50 percent in 2017. Till the introduction of MFS in 2012, that number stood at around 20 percent for a long time. A financial account is broadly defined by the index as an account at a bank or another type of financial institution. Now, Atiur Rahman believes 60 percent of adults are covered by the formal banking system, which increases to 90 percent if account opening and financial involvement through MFS and MFIs are included. READ: IFC inks deal with BFIU to develop eKYC infrastructure for fast-tracking financial Inclusion According to Bangladesh Bank data, the country witnessed a huge jump in deposit accounts with banks during the 2019-20 fiscal. As of June 2020, the number of deposit accounts in the banking sector stood at 13.24 crore as of June this year, which was a 33.6 percent jump from a year earlier. The number of dormant accounts is estimated at around 10 percent. “The total deposits of the banking sector crossed Tk12 trillion (12,000 crore) in 2020, from Tk 678 crore in 1973, mobile finance deposits stood around Tk10,000 crore and the deposits with the MFI system crossed Tk 1 trillion (1000 crore) recently,” Dr Atiur said. Comparing the central bank’s target of disbursing Tk 26,000 crore in loans to the agriculture and rural sector in the current fiscal to only Tk 100 crore set aside for the sector in 1973, Dr Atiur said it is very clear that Bangladesh “achieved miraculous success in financial inclusion and access to finance.” Bangladesh introduced the No-Frill Accounts [or NFAs, these require zero or very low minimum balance and banking facilities such as withdrawals and ATM and debit card facilities incur zero charges], opened with an initial deposit of Tk10/50/100 for various disadvantaged groups. There are also the school banking accounts opened by the banks for under -18s and working children accounts opened by the banks through collaboration with NGOs. According to the BB, as of June 2020, more than 22 million (2.2 crore) No-Frill Accounts had been opened through banks. All the various categories of No-Frill Accounts, including for farmers, hardcore poor, freedom fighters and social safety net beneficiaries, witnessed growth. At the same date, over 2.4 million School Banking Accounts had been opened, and 19 banks had opened 10,029 accounts for Working Children with the help of 23 NGOs. As of June 2020, Farmers’ Accounts remain the major category of NFAs, contributing around 45 percent of the total number. Bangladesh Bank data also showed the number of accounts opened under Social Safety Net Programs increased by over 38 percent during the last quarter of the 2019-20 fiscal. The onset of the pandemic contributed to this growth as more and more people opened such accounts to access the government’s increased support programs during this period. The total amount of deposits in the No-Frill Accounts reached Tk 2,386.74 crore in June 2020, a growth of 19.1% year-on-year. READ: Financial inclusion of small businesses: Uttaron SME card launched Economist Dr. ABM Mirza Azizul Islam acknowledged Bangladesh’s “very impressive progress” in financial inclusion since the introduction of mobile financial services. He believes there should be even more expansion of financial coverage to include marginal people in the financial system, he said. Mirza Aziz, however, said access to private sector credit is still lagging in the country, and policymakers have to focus on simplifying the system for providing and accessing loans. Atiur Rahman returned to Bangladesh Bank in February 2020 to deliver the annual Nur Matin Lecture, where he talked about the various measures and philosophy underpinning the drive to increase financial inclusion. At present the country is working in accordance with the first National Financial Inclusion Strategy (NFIS), adopted in 2018, and covering the time period from 2019-2024. Chairing the 2020 Nur Matin Lecture program, Governor Fazle Kabir said: "Measures undertaken with respect to financial inclusion like agent and booth banking, mobile banking and school banking, opening NFAs, banking for working street children and arranging fairs and creating refinancing schemes have brought a massive number of unbanked people under banking services. All these efforts proudly carry the stamp of your (Atiur Rahman’s) dedication.”

To create a secure digital banking environment and to accelerate financial inclusion, IFC has signed a cooperation agreement with Bangladesh Financial Intelligence Unit (BFIU) for implementing an Electronic Know Your Customer (eKYC) project in Bangladesh, where only half the adult population has access to a formal financial system.BFIU, an independent government agency tasked with investigating suspicious transactions and money laundering, is also the central agency for ensuring KYC/eKYC compliance.Under the agreement, IFC and BFIU will work together to develop and adapt eKYC infrastructure, which is a foundational regulatory arrangement for conducting customer due diligence during new client on boarding process for collecting and verifying customer data electronically during opening of new accounts at banks, non-bank financial institutions, mobile financial service providers, insurance companies, and capital market intermediaries, said a press release of Bangladesh Bank. Also read: IFC provides liquidity succour to Covid-hit RMG sector According to central bank, an efficient digital on boarding infrastructure is one of the major building blocks for fast-tracking financial inclusion in Bangladesh.Under the current KYC protocol for opening new accounts, customers need to present their national identity (NID) cards in person and financial institutions (FI) must authenticate and keep a record manually photocopying and printing the NID.The process is time-consuming, costly, and inconvenient for both clients and FIs. Moreover, in-person account opening has become more difficult amid the COVID-19 pandemic and the development of eKYC will help in social distancing.Once in place, the eKYC infrastructure will not only cut time and cost of client on boarding, but it will help reach more customers digitally, thus, reducing the number of unbanked people, particularly the underserved such as small business owners and women entrepreneurs.The project will contribute to the financial inclusion agenda of the government of Bangladesh as well as IFC’s target of including an additional 30 million unbanked adults in the country by 2030.BFIU is expected to issue a comprehensive eKYC regulatory guideline for the financial sector by December 2024.Along with establishing a regulatory infrastructure, the eKYC project will also deliver data analytics, case studies, knowledge creation and dissemination and awareness building in the financial market. IFC estimates that 500,000 people will be covered by the e-KYC system by end of the project implementation period in 2025.“Financial sector especially financial institutions are experiencing a drastic process of digitalization.This digital transformation enables easy access of customer, even from the remote location, into the financial services. Also read: Kamal seeks soft IFC loan for private sector development This may pose some underlying risk of money laundering, terrorism financing and related criminal activities by abusing financial institutions and its services.To minimize such risk of financial sector e-KYC can be one of the most optimal solutions” said Md. Masud Biswas, Executive Director & Deputy Head of BFIU.“Promoting financial inclusion is one of the priorities for IFC’s work in Bangladesh. The implementation of eKYC infrastructure will offer seamless experience for end users and support the financial sector to reach out to last mile customers in Bangladesh, significantly increasing access to financial services”, said Qamar Saleem, IFC's Regional Manager Advisory Services for Financial Institutions Group in Asia and Pacific.IFC helps advance financial inclusion through investments in the financial sector, advisory services to investment clients and other private sector clients, and through advisory services to stakeholders in financial infrastructure.Earlier, for conversion from manual KYC to eKYC, BFIU ran a small-scale testing by opening 1,500 accounts using eKYC technology, such as biometrics, and the results confirmed its effectiveness.

Uttaron SME card has been launched to ease the small businesses and startups’ access to mainstream investment and finance.

An online webinar titled “Sarathi- Progress through Financial Inclusion: Knowledge Sharing Event” was held in the city on Monday.