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Internet Banking Surges 5% in Bangladesh, Records 200% YoY Growth

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Internet banking transactions in Bangladesh experienced a significant upswing in November 2023, recording a 5% increase compared to the previous month, according to data from Bangladesh Bank. The total transactions through Internet banking reached Tk82,866 crore, reflecting a 5.07% rise from October. Notably, Internet banking showed an exceptional 200% year-on-year growth, as transactions in November 2022 amounted to Tk27,426 crore.

In contrast, mobile banking and card transactions, including credit and debit cards, witnessed a marginal decline. Mobile financial services (MFS) transactions dipped by 1% to Tk119,600 crore, while card transactions (covering ATM, POS, CRM, and e-commerce) also saw a similar 1% decrease to Tk42,638 crore compared to the previous month.

Bankers attributed the surge in Internet banking to its widespread availability across most banks, making it a popular choice among users. They emphasized that fluctuations of 1-2% on a monthly basis are typical and may not necessarily signal a trend change. However, larger variations, ranging from Tk10,000-20,000 crore, could indicate potential errors.

The head of the card division at a private bank noted that the internet banking revolution, spurred by the onset of the COVID-19 pandemic, continues to gain popularity. Customers are increasingly opting for online transactions, reducing the need for in-person visits to banks.

Data from Bangladesh Bank highlighted a substantial increase in average monthly internet banking and app transactions, growing from Tk45,000 crore between April and September 2023 to Tk82,000 crore in November 2023. This represents an 80% growth in just four months.

Among the banks in Bangladesh, the majority of app transactions are conducted through Islami Bank’s CellFin and the Internet. Islami Bank customers account for almost half of these transactions, followed by Dutch-Bangla Bank’s Nexus Pay, City Bank’s City Touch, BRAC Bank’s Astha, and Eastern Bank’s Sky Banking.

In a related trend, foreign currency transactions through banks’ cards witnessed a decrease in November 2023, reaching Tk798 crore, a Tk14 crore drop from the previous month. The reduction in new card issuances, attributed to a shortage of dollars, contributed to the decrease in dollar endorsements through cards. To endorse dollars on cards, banks have to do so at Tk110, while open market customers must buy dollars at Tk124.

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Cenbank Prolongs Import Payment Terms for Raw Materials Until Dec 2024

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The Bangladesh Bank (BB) has announced an extension for the payment period against imports of industrial raw materials from 180 to 360 days, a measure now set to remain in place until December 2024. This policy, initially scheduled to end in June of this year, has been prolonged to facilitate trade transactions, according to a BB circular issued today.

“To support trade transactions, it has been decided to extend the policy support until December 31, 2024. The extended usance period will not apply to imports under EDF loans, as previously stipulated. All other relevant instructions remain unchanged,” the circular stated.

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Banks in Industrial Areas to Open June 14-16 for Eid Payments

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To ensure timely payment of salaries and bonuses to garment industry workers before Eid-ul-Azha, the branches of banks in key industrial areas will remain open on a limited basis on June 14, 15, and 16.

The Bangladesh Bank (BB) issued a notification stating that bank branches in Dhaka metropolitan, Ashulia, Tongi, Gazipur, Savar, Bhaluka, and Narayanganj will operate on these days to facilitate financial transactions for garment sector employees.

Typically, Friday and Saturday (June 14 and 15) are weekly holidays, and Sunday (June 16) will be closed for Eid. Despite these closures, the BB has mandated that banks in industrial regions stay open to manage the disbursement of wages and bonuses and facilitate the sale of export bills.

Additionally, bank branches in Chattogram metropolitan and industrial areas will also be open to support garment workers’ payments and the processing of export bills.

The BB has instructed banks to coordinate with local authorities to ensure adequate security at the branches during this period.

Eid-ul-Azha, one of the most significant religious festivals for Muslims, will be celebrated in Bangladesh on June 17.

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Cenbank Mandates Real-Time Reporting of Willful Defaulters

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The Bangladesh Bank (BB) has issued new instructions to banks to submit data on willful defaulters to the Credit Information Bureau (CIB) database. This directive was issued on Tuesday, requiring immediate compliance from commercial banks and non-banking financial institutions (NBFIs).

In a circular released by the CIB of the central bank, banks have been instructed to report their June data in real-time starting July 1. The circular has been sent to top executives of banks for prompt execution.

This move follows an earlier initiative by the BB, outlined in a circular on March 12, aimed at identifying willful defaulters within the banking sector. The central bank also detailed actions to be taken against such defaulters.

According to the circular, any client who takes a loan anonymously and misuses it will be classified as a willful defaulter. Banks were directed to establish a ‘willful defaulter identification unit’ by April 9 to facilitate this identification process.

The circular further stipulates penalties for non-compliance. Banks that violate these conditions will face fines ranging from Tk 50 lakhs to Tk 1 crore. Continued violations will incur additional fines of Tk 1 lakh per day.

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