AFTER a robust growth, mobile banking is now facing several weaknesses to gain people’s confidence and trust, and to ensure secured banking to the unbanked population in providing services. Bangladesh Bank (BB) on Wednesday slapped a cancellation of Prime Bank’s mobile banking licence as it found gross violation of rules by the company that Prime Bank had appointed to run the service. Though the mobile banking is being popularized, the service operating banks have not yet invested massive attention which must encourage the mountebank and gluttonous people to bet people’s wealth. We speculate that if the banks fail to prevent irregularities and enable secured banking it will swallow up total banking sector triggering a bankruptcy of our flourishing economy.
A BB investigation found that SMG Infocom International, appointed by Prime Bank as its mobile banking partner in 2011, took Tk 7,000 to Tk 100,000 from each agent appointed, a gross violation of rules. SMG appointed 25,000 agents and collected over Tk 15 crore from them. When the agents found the SMG office shut early last year, they contacted Prime Bank. The bank told them that it was not responsible for it. Later, many of the agents lodged complaints with the BB that detected gross violations in the consequent investigations. According to Prime Bank, which got licence to run mobile banking in 2010-11, the company was supposed to build infrastructure and appoint agents to operate the service and SMG in 2012 ran ads in newspapers for appointment of agents in districts, upazilas and union parishads, using Prime Bank’s logo.
While mobile banking is a bank-led model, Prime Bank cannot skip its responsibility for embezzling the money, it must take the responsibility. An official of BB said, “All responsibilities in this case fall on Prime Bank and we have asked it to pay back the money taken through agent appointments.” And the bank chairman Azam J Chowdhury rhetorically assured the victims saying, “No-one will be spared; we’ll punish the people responsible for these irregularities.” Regulations of mobile financial services make banks responsible for full anti-money laundering or counter financing of terrorism due to diligence and performance oversight on their agents.
According to BB statistics in March this year, there were more than 1.50 crore mobile banking subscribers who transacted Tk 263 crore a day. The increasing rate of subscription was 2.77 percent a month, according to the data, and the percentage is rising as people taking the services for a hassle-free transaction at an affordable cost. The m-banking has also played a significant role in reducing the cost of remittances thus champions in poverty reduction. The unpleasant incident of Prime Bank is a warning for other 18 banks, running mobile banking services, as they must take lesson from the episode and will strengthen the potential services.
BB as the controlling bank has to take the offenders to task for financial irregularity. We also ask the authorities concern to ensure security in m-banking transaction for high vulnerability of cyber attack.
