NCC Bank’s MFS licence revoked due to inactive accounts

The central bank recently revoked the NCC Bank's mobile financial services (MFS) licence due to inactive accounts.

Md Mezbaul Haque, general manager of Bangladesh Bank's Payment Systems Department, told The Business Standard the NCC Bank must apply for a new licence from the central bank if it wants to restart MFS operations.

However, the NCC Bank claimed that it has closed its MFS service to comply with Bangladesh Bank's guideline on partnership with mobile financial platforms. 

Multiple banks cannot operate MFS with a single mobile financial platform, but the NCC Bank did it.

SureCash, a mobile financial platform of Progoti Systems Limited, was in partnership with five local banks – including the NCC. 

Now, only state-owned Rupali Bank is continuing its MFS with SureCash after the NCC Bank ended its partnership.

Mosleh Uddin Ahmed, managing director and chief executive officer of the NCC Bank, is hopeful to begin the bank's own mobile financial service within a short time.

The NCC Bank was operating MFS on a limited scale in partnership with SureCash. 

Before the NCC Bank, IFIC Bank and Exim Bank ended their MFS activities in 2019.

After the closure of NCC Bank's MFS, the number of banks providing MFS in February decreased to 15, Bangladesh Bank data shows.

In February, the number of active accounts decreased by 18.64 percent – to 2.70 crore from 3.32 crore a month ago.

As per the central bank's guidelines, an account is considered inactive if it has no transaction in the last three months.

Data shows that in February, the total number of registered MFS clients rose by 1.16 percent to 8.18 crore.

Sources said MFS active accounts decreased mainly due to insufficient activity on primary education stipend accounts. 

These accounts are activated when a stipend is disbursed. Then, for the next three months, they have no transactions.

Records show active MFS accounts fell by 15.64 percent last October. Since then, the number of active accounts has increased every month.

According to the latest data, in February, the average daily transactions via mobile banking totalled Tk1,425 crore. 

That month: cash in decreased by two percent, cash out decreased by 1.6 percent, person-to-person money transfers decreased by around three percent, utility bill payments decreased by 6.5 percent, and merchant payments decreased by 7.3 percent.

However, government payments through mobile banking have increased by around 81 percent to Tk275 crore – from Tk152 crore a month ago.

At present, there are 9.86 lakh MFS agents across the country.