Transactions through online banking in Bangladesh have more than doubled in the last fiscal year as a large number of people, especially the younger generation, are using the platform to carry out financial activities.
In 2021-2022, transactions jumped 122.60% year-on-year to Tk 224,958 crore, according to Bangladesh Bank data.
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Banks began to take a wide range of initiatives in 2010 as part of their efforts to encourage customers to adopt the digital window.
But it was the Covid-19 outbreak in early 2020 that boosted online banking as the virus forced people to turn to technology for communication, work, study and entertainment.
With the increasing use of internet banking, people can deposit and transfer funds anytime, from anywhere, eliminating the need to visit a physical bank branch. In addition, they can comfortably charge their cell phones and pay their utility bills and rents.
With the increasing use of internet banking, people can deposit and transfer funds anytime, from anywhere, eliminating the need to visit a physical bank branch. In addition, they can comfortably charge their cell phones and pay utility bills and rents.
Abu Masum, a garment factory manager in Gazipur, does most of his financial transactions through online banking due to his busy schedule.
“Internet banking has made people’s lives easier, especially for those who are very busy. I would never have done everything after doing my job without this new form of banking.”
Banks have deployed various products to increase their presence in the digital space. For example, almost all banks have introduced mobile applications.
The availability of smartphones at affordable prices has contributed to the expansion of internet banking services in recent times.
Mohammed Monirul Moula, Managing Director of Islami Bank Bangladesh Ltd, said that with the rapid growth of internet users and the availability of smartphones and digital services, online banking has grown in popularity over the years. and brought visible changes to customers’ banking habits.
IBBL has been providing internet banking services to its customers through its iBanking platform since 2007.
Currently, it has around seven million internet banking users and 17,000 transactions are made using the service every day.
Launched in 2020, Cellfin is another online banking app from IBBL.
People can benefit from banking services such as opening an account, transferring funds and buying tickets through the app, Moula said.
Brac Bank launched the Astha mobile app in April 2021 and it gained immense popularity among customers in a short time, said M Sabbir Hossain, Deputy Managing Director of the Private Commercial Bank.
As of June 2019, the number of active internet banking users of the bank was 20,000 and it has now risen to 1.5 lakh. About 2,800 crore of Tk was traded through the platform in July this year.
“We run promotional campaigns to increase the number of customers and make the service popular. We do not charge any annual fees on internet banking transactions, although we could have realized the fees in some cases,” Hossain said.
Brac Bank plans to invest more to expand its digital banking operations, as it has set itself the goal of doubling the number of customers in the next two years.
In Bangladesh, the number of customers using internet banking stood at 5.35 crores in June, a 47 percent increase from a year earlier, according to BB data.
The central bank provided support to banks at the height of the pandemic so that they could expand their internet banking operations.
For example, the central bank in September 2020 raised the limit on interbank remittances to Tk 5 lakh per day from Tk 2 lakh.
It also doubled the single transaction cap to Tk 1 lakh from Tk 50,000 and allowed customers to settle up to 10 transactions per day from five previously.
A central banker says branch-run banking is already in decline due to the spread of internet banking, which ultimately reduces operational costs for financial institutions.
“It also benefits customers as they can opt out of visiting branches to settle transactions. It has helped them use their valuable time for other productive purposes.”
Central bank platforms – Bangladesh Real Time Gross Settlement (BD-RTGS) and Bangladesh Electronic Funds Transfer Network (BEFTN) – have also popularized online banking.
Customers can instantly settle high-volume transactions through RTGS while BEFTN helps them complete retail transactions within a day.
“Various types of payments, ranging from paying utility bills and tuition fees to booking tickets, can now be made from anywhere, which was unimaginable six or seven years ago,” said said HM Mostafizur Rahman, head of retail business division of Dhaka Bank.
Dhaka Bank launched the mobile banking application “Dhaka Bank Go” in 2016.
“The coronavirus pandemic has been a turning point for online banking. It has gained popularity globally,” Rahman said.
“About 10% of transactions are done through online banking and this figure will increase several times over the next few years.”