Active MFS accounts slump 34pc in Aug-Mar ‘due to BB restraint’

The number of active mobile money accounts has declined drastically in the country in the recent months following the central bank's new regulations on mobile financial services (MFS).

According to the latest data of Bangladesh Bank (BB), there are a total of 20.26 million active mobile account users in Bangladesh by the end of this March.

This is a drastic decline from last August, when there were 30.73 million active mobile money accounts in the country.

The data shows that the number of active MFS accounts has dropped by 10.47 million or more than 34 per cent during August-March period of the current fiscal.

When asked about the reason behind such trend, industry insiders pointed at the BB restriction on the number of accounts that can be opened with a single national ID card.

BB, in a circular issued in January 2017, directed the MFS providers not to open more than one account with a single NID card. The decision is often seen as an attempt by the central bank to restrict the use of MFS platforms for digital 'hundi' against the backdrop of declining remittance inflow last year.

"Following the BB direction, we have moved to close thousands of accounts, as there cannot be more than one account against one NID," said a high official of bKash, which is the market leader in MFS business in the country.

"Understandably, such moves have resulted in gradual decline in the number of active accounts," the official said.

The BB circular also brought down the daily ceiling of mobile cash-in to Tk 15,000 from Tk 25,000, and the maximum cash-out limit to Tk 10,000 from Tk 25,000.

Besides, the monthly maximum cash-in limit was slashed to Tk 100,000 from Tk 150,000, while the monthly maximum cash-out limit to Tk 50,000 from Tk 150,000.

In November, BB again put a limit on the total amount that can be kept deposited with an account, fixing it at Tk 300,000.

Industry insiders, however, observed that such restrictions on transaction ceiling were creating 'negative impacts' on some particular segments of mobile money users.

"Rural martinets as well as SMEs are especially affected by these restrictions since they widely use MFS platforms for large amount of business transactions," said an official of a leading MFS operator.

Nevertheless, BB statistics show that the declining number of mobile money accounts is apparently having little impact on the overall flow of MFS transactions in the country.

According to the central bank figure, a total of 514,365,948 MFS transactions have taken place in Bangladesh during the first three months of 2018 (Jan-March), the total worth of which is around Tk 901.8 billion.

The figure is Tk 64 billion higher from that of the last quarter of 2017, when a total of Tk 837.78 billion was channeled through MFS platforms. Notably, this amount is also 24.25 percent higher than the first quarter of 2017, when a total of Tk 725.79 billion was transacted through MFS in the country.

The latest statistics also show that the number of registered MFS clients has increased from 58.8 million to 60.15 million during the Jan-March period of 2018.

While, there were a total of 786,459 MFS agents in the country by the end of 2017, the number has risen to 804,610 by this March.

Cash-in continues to be the dominant form of MFS transactions, closely followed by cash-out, BB figures showed.

While, the total of cash-in money amounted to Tk 380.55 billion during the first three months of 2018, the total amount of cash-out, during the same period, was Tk 343.84 billion.

There has been a steady increase in the use of MFS in salary disbursement and paying utility bills as well as most recently in the government payment or merchant payment. But, the growth has often been inconsistent, and the amount still remains insignificant.

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