Internet banking transactions doubled in July

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Internet banking transactions nearly doubled to Tk 23,548 crore in July from a year earlier, central bank figures show, as more people in Bangladesh use computers and mobile apps to access various financial services.

It stood at Tk 12,768 crore in the same month of 2021. The amount of internet banking transactions in July, however, was slightly lower than Tk 23,770 crore in June, according to Bangladesh Bank.

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Internet banking, commonly referred to as online banking, allows users to conduct financial transactions over the Internet and offers customers almost all of the services traditionally available through a local branch, including deposits, transfers and payments from online invoices.

Introduced in Bangladesh by Standard Chartered two decades ago, internet banking has grown at a faster pace in the country since then.

The pace has been accelerated by the coronavirus pandemic as consumers have been forced to turn to the internet to access finance from the comfort of their homes to avoid catching the deadly virus.

The number of customers using internet banking to conduct digital transactions grew by more than 43% year-on-year to 54.72 lakh in July as more consumers embrace technology to purchase financial services through convenience and efficiency.

It was 38.22 lakh in July last year and 53.55 lakh in June this year.

The pace has been accelerated by the coronavirus pandemic as consumers have been forced to turn to the internet to access finance from the comfort of their homes.

“Customers who only use internet banking once are getting hooked on it,” said Amin Md Mehedi Hasan, Vice President and Head of Digital Banking at Eastern Bank Ltd.

“Internet banking has grown exponentially since the pandemic hit the world.”

He indicated that the migration of customers from the traditional banking channel to online banking has seen a 600% increase at EBL in 2020 and 2021. And 91% of transactions take place online in private commercial banking, while the rest goes through branches.

Md Mezbaul Haque, Director of the Central Bank’s Payment Systems Department, recalled that when he joined the Payment Systems Department in 2016, only Tk 2 crore to Tk 3 crore were transferred daily through online banking. interbank.

“Now it has gone from Tk 150 crore to Tk 200 crore per day.”

Haque believes online banking is the future of banking as technologies advance and people’s approach to banking undergoes a major shift.

“Not many people will be interested in visiting branches. It happens all over the world,” he said.

According to Haque, internet banking is also profitable for banks and allows them to use technologies to provide the financial services that a physical branch currently provides.

This means that if banking takes place online and over the phone, banks would be able to reduce the huge operating expenses required to provide services in the traditional form.

“It’s the only way for banks to minimize costs and ensure efficiency,” Haque said.

For individuals, the maximum value of each transaction is Tk 3 lakh through internet banking. The frequency is a maximum of 10 times per day and no more than 10 lakh Tk per day, according to the BB.

For businesses, the limit has been set at Tk 5 lakh per transaction. The maximum frequency is 20 times while a total of 25 lakh Tk could be processed per day.

In July, remittances through the Bangladesh Electronic Funds Transfer Network (BEFTN) reached Tk 40,488 crore, up nearly 23% from Tk 32,986 crore in the same month last year . It was, however, lower than June’s Tk 45,369 crore, according to central bank data.

Launched in 2011, BEFTN was the country’s first paperless electronic interbank funds transfer system. It facilitates credit and debit transactions, upstream of the check clearing system.

It can manage credit transfers such as payroll, foreign and domestic remittances, social security payments, business dividends, bill payments, business payments, government tax payments, social security payments and person-to-person payments.

In addition, it takes care of payments such as insurance premiums, club/association subscription fees and equivalent monthly installments.

Transactions through the Bangladesh Real Time Gross Settlement (BD-RTGS), which has been executing high-value and urgent payments since 2015, nearly tripled to Tk 415,052 crore in July from Tk 144,410 crore a year earlier.

But the settlement was nearly 24% lower than June’s Tk 543,956 crore.

While transactions through the RTGS are real-time, those routed through the BEFTN are not. Also, the central bank does not allow the use of RTGS to transfer an amount less than Tk 1 lakh.

Internet banking was once a tool for transferring funds and mobile top-up. Now it’s part of the daily way of life, said EBL’s Hasan.

“The petty cash that a person needs every day is taken care of by almost every bank in Bangladesh. Internet banking has gone from a value-added service to a requirement within five years.”

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