Prime Bank gets green light for MFS subsidiary
The approval was granted by the Bangladesh Bank recently
Prime Bank, a second-generation private sector bank in the country, has received regulatory approval to establish a subsidiary for mobile financial services (MFS) under a bank-led model.
The approval was granted by the Bangladesh Bank recently, according to a Dhaka Stock Exchange disclosure. The new subsidiary will be formed in compliance with the Bangladesh Mobile Financial Services (MFS) Regulations 2022.
Prime Bank had announced its intention to enter the MFS market in August last year, recognising the sector's vast potential. The bank plans to start the subsidiary with an initial minimum paid-up capital of Tk45 crore.
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Currently, the bank operates 146 branches nationwide and has five subsidiaries. Prime Bank Investment and Prime Bank Securities operate within Bangladesh, while Prime Exchange Co Pte, PBL Finance (Hong Kong), and PBL Exchange (UK) operate abroad.
Earlier, a top executive of the bank told The Business Standard, "We planned the MFS business as the industry is growing rapidly and has now evolved into a larger infrastructure."
"We want to create a convenient payment system for customers through MFS so that they can easily transfer money," he added.
This February witnessed a remarkable surge in the number of transactions conducted through MFS, reaching the highest number ever recorded in a single month.
According to a central bank report, 58.43 crore transactions were made using MFS like bKash, Nagad, and Rocket in February. The previous high of 57.33 crore transactions took place in October last year.
The amount transacted also saw an increase with Tk1.30 lakh crore transferred using mobile financial services, the second highest to date. The highest was in June last year with over Tk1.32 lakh crore in transactions, the report added.
Comparing February's figures to the same period last year, the transaction amount increased by approximately 34%, with Tk97.31 thousand crores transacted in February 2023.
Industry stakeholders attribute the substantial increase in both transaction numbers and amounts to several factors, including the formation of people's habits favouring digital transactions and the ongoing development of the digital ecosystem.
According to central bank data, several services, including cash out and person-to-person fund transfer (send money), witnessed record transactions in February.
Merchant payments via MFS at super shops and businesses amounted to Tk6,459 crore in February, an 83% increase from the same period in 2023 when Tk3,532 crore was traded.
Last June, the government disbursed Tk2,173 crore in various forms of assistance, including stipends and old-age allowance, using MFS. The total number of MFS subscribers stood at 22.15 crore at the end of February, with subscribers growing by almost 2.5 crore in just one year, according to the data.
The Bangladesh Bank launched the mobile banking program in 2010. The following year, the journey of mobile financial services commenced in the private sector with the launch of Dutch-Bangla Bank's service Rocket.
Currently, there are 13 banks and companies offering mobile financial services in the country, under names such as bKash, Rocket, UCash, MyCash, and SureCash.
In addition to personal transactions, MFS serves as a means to pay for electricity, gas, water, and shopping bills, as well as salary disbursements and money transfers from overseas.
Also, mobile financial services enable customers to effortlessly make transactions between their bank accounts and mobile devices, further enhancing its growing popularity.
