Financial interoperability necessary for dynamic economy: Experts

Former governor of the central bank Atiur Rahman has said "financial interoperability" was necessary for maximising the benefits of financial inclusion.

Financial interoperability allows for direct transactions between the clients of two separate mobile financial services (MFS) companies as well as two separate banks.

"This will infuse dynamism in the economy and growth will be further strengthened," he said while addressing as chief guest the inaugural session of the training programme "Financial Interoperability in Bangladesh: Challenges and Way Forward" organised jointly by the Policy Research Institute (PRI) and the Economic Reporters' Forum (ERF) held at the ERF auditorium in the capital on Tuesday.

The Bangladesh Bank launched interoperability among the MFS companies in October 2020, but it was halted within hours of its launching. Since then, the service has yet to be restored.

Atiur said financial interoperability is necessary to adapt to the evolving changes, adding that measures should be taken so that the common people can make transactions in shops through scanning QR codes.

"There is also a demand for this, but the government will have to develop the necessary infrastructures in this regard, which also requires investment. The Indian government has invested a lot in introducing such a system. Bangladesh also needs to do the same," he added.

Atiur said that if private companies make the investment instead of the government, then they would charge the clients at their will. "It will create doubt about the sustainability of the system. For this, there is a need to make proper allocations in the budget for this."

PRI Research Director MA Razzaque said that financial transactions in the country would be simple, competitive and innovative once financial interoperability is introduced.   

"The more innovative the capacity of a country is, the higher will be its economic growth," he added.

Prof Bazlul H Khondker said that digital financial services have made a positive impact on poverty alleviation and on personal savings.

Bangladesh Bank Executive Director Debdulal Roy said whatever transaction and exchange of information were taking place in the country's financial sector, those were not interoperable, rather it was interconnection. "Now, time has come for going towards interoperability. It will make transactions multidimensional and thus will boost the strength of the economy."

The event was presided over by ERF Vice President and AFP Bureau Chief Shafiqul Alam. ERF General Secretary SM Rashidul Islam gave the welcome address.