Economic Reporter :
When the Finance Ministry is worried about government’s aid fund disbursement due to anomalies in the list of recipients, payment industry experts see the KYC based MFS account is the ultimate solution to ensure proper and quick aid distribution among target group of poor people across the country.
Prime Minister Sheikh Hasina inaugurated the disbursement of Tk1,250 crore in cash assistance for 50 lakh poor families hit hard by the ongoing Covid-19 lockdown through MFS providers such as bKash, Rocket, Nagad and SureCash. But the Ministry of Finance has struggled to get the proper list from regional bodies formed to prepare the nominal roll of the genuine recipients.
Nagad, a joint venture of the Post and Telecommunication Division and a private firm, disbursed an amount of Tk 425 crore, while market leader bKash disbursed Tk375 crore, Rocket Tk250 crore, and SureCash Tk200 crore, sources at the Ministry of Disaster Management and Relief said.
According to sources in the ministry, nearly 28 lakh people who are owners of saving certificates and government employee and retired officials enjoying government pension funds were listed as ultra-poor who were to receive the government’s aid fund. These people eventually have been delisted at different stages that made the process cumbersome.
However, most of the listed individuals did not have any MFS account from before. Hence, MFS accounts were opened by the MFS providers based on NID number matched with date of birth and name from the Election Commission database.
Considering the urgency of the matter, the Central Bank i.e. Bangladesh Bank and Bangladesh Financial Intelligence Unit (BFIU) had allowed the departure from KYC protocol mandatory for opening MFS account.
“KYC means “Know Your Customer”. KYC is a process by which banks/MFS providers obtain information about the identity and address of the customers. This process helps to ensure that bank/ MFS services are not misused. Once MFS accounts are opened ignoring KYC rules, people can take advantage of including their near and dear ones in the list of poor people”, a top central bank official said.
To avoid fraud and duplication, he said that the recipients list must be prepared on the basis of accounts registered based on e-KYC/paper KYC. Once the list is prepared based on registered MFS account numbers having KYC and NID verification, no discrepancy can take place. “No one can receive duplicate disbursement, as one individual can open only one account with one MFS provider”.
Dr Shahadat Khan, CEO of Sure Cash said that the good thing is that the government has realized that the aid disbursement through MFS channel is more secure, transparent and convenient than traditional channels. MFS providers have helped the ministry to identify fraud and inappropriate recipients.
Even through bank account, payment experts say that there is room for manipulating the list of recipients. Besides, disbursement through bank account may defeat the purpose as similar efforts in the past had always failed for the obvious inconvenience attached to such initiatives.
BFIU, the central agency of Bangladesh responsible for analyzing Suspicious Transaction Reports (STR) emphasizes on banks and MFS providers to open accounts in line with KYC protocols. “The government can mitigate duplications/frauds in aid, ensuring disbursement made to MFS accounts opened through prescribed KYC and NID verification”, a BFIU official said.
“If such actions are ensured, then the disbursement will land in active accounts and question of disbursement in non-existant accounts will be out of question”, he said.
A study paper of the Finance Division, Ministry of Finance conducted by Maxwell Stamp Plc under the Strengthening Public Financial Management for Social Protection (SPFMSP) project founded that inadequate monitoring along with unsatisfactory beneficiary identification mechanisms often leave scope for duplicate and fraudulent payments.
“Any effective payment solution in the context of Bangladesh needs to empower the beneficiaries to be able to make informed choices, be cost-effective and transparent. It also needs to be backed by a modern technology-driven unified coordination and supervision mechanism over all the available modes of payment in the country”, the report said.
