Digital Bank will be created, but to serve whom?
Of late, Bangladesh Bank has finalised and approved the policy of setting up Digital Bank in the country. As its name indicates, the bank will function digitally, and therefore, it will not have any branch, sub-branch, ATM booth or any such establishment. Banking services, including the financial transactions, will be provided to customers using smartphones or other digital devices.
The policy also mentions who can become a director of the bank. To become a director, one will need 50 lakh taka and Tk 125 crore taka will be needed for the bank’s formation. This bank will operate according to the existing bank company law and policies. All services will be app-based, on mobile or digital devices 24 hours a day. Digital Bank can provide virtual cards, QR codes and any other advanced technology-based products to facilitate customer transactions. Like other commercial banks, Digital Bank will not open any Letter of Credit (LC). No loans can be given to large and medium industries either. It will only give small loans.
There are a total of 61 commercial banks in the country and with the advancement of technology, Digital Bank can be also set up in Bangladesh to make banking services customer friendly, but the point is can this government, under which banking services have suffered a huge setback, be any more trusted for handling the banking institutions?
Since many people in Bangladesh still do not have smartphones or cannot operate these phones even if one possesses one, digital banking will be limited to only those who have smartphones and can use them effectively. Lack of financial literacy can be a major hurdle for digital banks.
Though the digital bank policy talks about transparency that will be ensured everywhere from the top level to the customer, the reality is nothing in the service sector under this government is transparent. In managing the banking sector, the government’s records are terrible.
A massive heist of Bangladesh Bank as well as looting of different commercial banks including loan scams in Basic Bank, Islamic Bank, etc. are proof that the government is not serious about protecting financial assets of the country at the state level as well as the private individual level. People in general have lost their trust in this government as to whether it can manage the people’s money with integrity.
Taking control of banks by using state power as well as loan scams prove that the government is more interested in serving its crony businessmen than the country and the general people. Therefore, the government is well advised to manage the traditional commercial banks with honesty and integrity rather than creating any new banks even if it is a Digital Bank.
