Regulation of Mobile Financial Services in Bangladesh: Constraints and Prospects
- July 26, 2021
- Posted by: RSIS
- Categories: IJRISS, Public Administration
International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue VI, June 2021 | ISSN 2454–6186
Regulation of Mobile Financial Services in Bangladesh: Constraints and Prospects
Dr. Md. Nurul Amin
Associate Professor, Department of Public Administration, Jahangirnagar University, Savar, Dhaka-1342, Bangladesh
Abstract: This study deals with the regulation of mobile financial transaction services in Bangladesh. It mainly focuses on the constraints and prospects of the regulation of mobile banking services industry. It justifies the selection of the regulation of mobile banking market as the services are growing rapidly and facing many challenges including dominant market share. Quality regulatory framework may promote the competitiveness of the industry and public interest at the next level. The secondary sources of data have been used mainly in this research. It follows content analysis as qualitative research method. The study finds that Bangladesh Bank as ‘independent’ regulatory agency, ministry of finance, the parliamentary standing committee on ministry of finance, directorate of national consumer rights protection, Bangladesh competition commission and the association of bankers- Bangladesh are main actors involved in the regulatory arrangements. The major constrains of this industry include excessive service fees, regulation of transaction ceiling, fraudulent practices, maintaining service quality, and monopoly of service providers. The prospects include inception of regressive service fee, safety of user and technology, expansion of services, using fin-tech innovations for huge users and market improvement, creating level playing field for all operators including state-owned provider, and interoperability facilities. Therefore, the policy makers and regulators including the Bangladesh Bank should take into account the above findings to improve mobile banking services in Bangladesh.
I. INTRODUCTION
Mobile financial service (MFS) is an important way of electronic financial transaction in Bangladesh. As ‘non-majoritarian’independent regulatory agency (Majone,1999) the Bangladesh Bank (BB) is officially responsible to regulate the mobile financial service market for promoting business as well as public interest. As per definition of BB “MFS refers to E-money services provided against a particular mobile/cell phone number of a client (termed as Mobile Account), where the record of funds is stored on the electronic general ledger. These services can be draw-down through specific payment instructions to be issued from the bearer’s mobile phone or through alternative digital process or device by ensuring authenticity of the transaction. However unlike e-money products, ‘cash-in’ and ‘cash-out’ and other services as permitted by BB (Bangladesh Bank) at agent locations are allowed for MFS accounts” (Bangladesh Bank, 2018: 2).
