Criticism as BD rushes into digital banking with out guidelines

“Those that have permission are usually not appropriate to guide digital banking.”

FE report
| Printed: 19 November 2023 at 23:50:57

Dr. Ihsan Mansour says that granting licenses to digital banks earlier than drafting laws is like placing the cart earlier than the horse.
At a media workshop on digital monetary companies, the famend economist expressed considerations concerning the lack of formal guidelines and pointers for digital banks, fearing it may result in “foul play.”
“Beginning a sport with out guidelines is unacceptable,” he stated in a session titled “Digital Banks: Alternatives and Challenges” at a workshop organized by Bangladesh Coverage Analysis Institute (PRI) in Dhaka on Sunday.
Dr. Mansour additionally questioned the Central Financial institution’s resolution to not grant a license to bKash, contemplating it essentially the most deserving candidate. “Those that have permission are usually not suited to pioneer digital banking,” he commented.
In keeping with The Economist, digital banks won’t pose a risk to conventional banks.
He defined, “Conventional banks will proceed to play their roles, whereas digital banks will fill particular niches.”
Dr. Mansour defined the distinction between digital banking and digital-only banks, and traced their improvement from the Nineties to 2009, respectively.
He additionally talked concerning the measurement of the worldwide market and the rising demand for digital banks because of their ease of entry, which confirms their excessive market penetration in rising economies corresponding to China, India and Brazil.
Apart from, the Govt Director of PRI addressed the alternatives and challenges dealing with digital banks in Bangladesh.
In his opening remarks, PRI Chairman Dr. Zaidi Sattar referred to as for tax advantages on important items to ease inflationary pressures.
The PRI President additionally highlighted the rising use of synthetic intelligence (AI) and generative AI in journalism and digital monetary companies, noting the potential of AI in client safety in digital monetary companies.
Dr. Sattar referred to as for making certain accessibility and affordability of digital monetary companies for all revenue ranges to advertise inclusive improvement.
Within the second session, Dr. Bazlul Khondaker, Director of PRI, introduced the primary findings and coverage implications of a examine titled ‘Assessing the Financial and Social Influence of Monetary Inclusion in Bangladesh: An Exploratory Research Utilizing the Monetary Social Accounting Matrix (FSAM)’.
This examine, carried out as a part of the Bangladesh Digital Monetary Providers Coverage Initiative mission, has produced a ‘Funds Stream’ desk for the primary time in Bangladesh.
Within the examine, simulation outcomes confirmed constructive impacts on agriculture, manufacturing, personal companies, and public companies because of elevated monetary flows, with manufacturing and personal companies having the very best impacts.
The examine additionally referred to as for increasing entry to digital nano-credit to advertise financial development, employment, funding and poverty discount.
In his session on “Macroeconomic and Commerce Points in Bangladesh,” Dr. Razzaq highlighted the excessive focus of Bangladesh’s attire exports, particularly T-shirts, with an annual manufacturing of about $8 billion.
Whereas Dr. Abdul Razzaq agreed on the power of this enormous manufacturing, he warned of the weak spot of an export-focused financial system and renewed his name for export diversification to keep up development and resilience.

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