ICT biz demands one-third ownership

The country's ICT-industry entrepreneurs demanded reservation of at least one-third ownership of digital banks for ICT businesses.

"There should be a requirement for (ensuring) at least one-third of the ownership of each digital bank by the technology-sector organisations or entrepreneurs," said Russell T Ahmed, president of Bangladesh Association of Software and Information Services (BASIS).

He came up with the demand at a roundtable on 'Digital Banks: Prospects and Way Forward' organised by BASIS at its auditorium in the city on Wednesday.

Mr Ahmed said (having) banking experience should not be mandatory to become CEO of the digital banks.

"As technology entrepreneurs in Bangladesh have successfully used technologies to bring new innovations in the fields of mobile financial services (MFS) and digital transformation of traditional banks, digital banks should be created under the leadership of technology entrepreneurs."

He opined that the government should take necessary initiatives to ensure that licences of new digital banks is not limited to only large corporate groups and wealthy individuals.

"We do not want capital owners as the owners of the digital banks just because they have only money. Rather, we want intellectual entrepreneurs in the digital banks. We want it written in the digital banking guidelines."

The BASIS president questioned why BASIS was not called for consultation in the process of formulating the guidelines, as it is the representative association of the country's ICT industry.

He opined that the more the digital bank licences are given, the more innovation would come in this field. Specific conditions may be given in this regard, if necessary.

Mr Ahmed proposed a private credit bureau under the supervision of BASIS, and said they would meet the central bank authorities soon with their various proposals.

Arfan Ali, chairperson of Zaytoon Business Solution and former MD of Bank Asia, said digital banking is now a natural progress. The key to success of digital banks would be partnership with MFS and agent banking or network.

Some 47 per cent of the adult population is still out of banking network. Digital banks would bring the population into the banking system, which traditional banks or agent banks cannot do.

He underscored the need of private credit bureau and financial literacy for success of digital banking.

Zakaria Swapan, founder of Priyo, said, "Bangladesh is a fraud-prone country. We know what happened in the e-commerce sector, we have to keep it in mind in launching digital banks."

Shahadat Khan, CEO of TallyKhata and Surecash, presented a keynote paper on the subject.

He said, "The country is data-poor. So we need more collaboration to become data-rich."

Currently, the traders involved in small and cottage industries are most deprived of banking services. No bank wants to give these traders loans because the banks do not have any information about them.

He also said these small entrepreneurs are forced to take loans from NGOs at 24 per cent interest per annum. Digital banks can provide banking services to this large population at much lower cost.

Mr Khan noted that appropriate use of technologies requires innovative entrepreneurs and technology professionals - to lead digital banking.

"For successful implementation of digital banks we need some preparations, like personal identity authentication, real-time interoperable payments, and comprehensive credit bureau with data of all lending institutions."

National e-KYC and Bangla QR-based 'Cashless Bangladesh' would play an important role in this regard. For this, all concerned - including banks, fintech institutions and regulators - have to work together, he added.

Manjur Mahmud, president of Datasoft, said the entire digital bank system should be led by lifestyle banking.

"It will not be able to bring unbanked people in digital banking, as they do not have smart-phones."

He opined that digital banks without trade finance are not actually workable, and so these have to be complete banks.

Serajul Islam, CEO of Era Tech, said digital banking is not only for unbanked people, it should be for both banked and unbanked people.

Maintaining accounts with KYC, deposit mobilisation, credit mobilisation, treasury mobilisation, and international trade facility are required to be a complete bank. Without these, digital banks cannot be called (complete) banks, he added.

Mohammed Kafi, Chief Operating Officer (COO) of Digipay Services, said e-signature or self authentication is import in digital banking beside e-KYC.

Muiz Tasnim Taqui, Director of Deloitte Bangladesh-South Asia, raised question whether the four pillars for digital banking - people, process, data, and system - are ready or not.

Collaboration among the ministries, departments and regulator concerned are imperative for the success of digital banking, he added.

Siraj Siddiquey (Shakil), Director VISA - South Asia, said a new breed of bankers, with mix of banking and technology knowledge, would be required for digital banking.

BASIS former president and chairman of fintech standing committee A K M Fahim Mashroor conducted the programme.

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