MOBILE BANKING IN BANGLADESH: A POLICY AND REGULATORY REVIEW
Abstract
Policy and regulatory issues are indispensable for maintaining discipline and protecting the interests of all stakeholders in the mobile banking ecosystem. Bangladesh Bank has issued mobile banking policy guidelines (2011) and mobile financial services regulation (2018) to protect against abuse of these services like financial fraud, money laundering, and terrorist financing, as well as safeguard user funds. This article examined the role of mobile banking policy and the regulatory framework in creating a favourable regulatory environment for mobile banking in Bangladesh. For this purpose, twenty-three KIIs and one questionnaire survey were conducted on 400 respondents in the country's four districts. Many public and private documents and journal articles were also reviewed. A regulatory policy index for mobile banking with ten indicators was developed, and the overall regulatory index score was 0.85 out of 1. Multiple linear regression analysis has also been used in this study. Its regulatory index value, beta coefficient, and R-value, as well as expert opinions, asserted that mobile banking regulatory policy standards have positively influenced the creation of a favourable regulatory environment, even though they demand some modification in terms of account opening minimum age, service charge rate, product diversification, interoperability, and supervision of mobile banking activities. Since multiple agencies are involved in mobile banking policy and regulation, the government can play a vital role in coordination among the multiple agencies to ensure the protection of customers and financial steadiness through a suitable legal structure.
JEL Classification Codes: G21, G28, C83.
References
Amin, N. (2021). Regulation of Mobile Financial Services in Bangladesh: Constraints and Prospects, International Journal of Research and Innovation in Social Science, V(VI), 565-570.
Bahia, K., Kennedy, K., & Winnie, W. (2022). Three years of the Mobile Money Regulatory Index: Insights, opportunities and challenges, GSMA, London. Retrieved from https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2022/12/RegIndex-Final.pdf
Chowdhury, M. U., Ahmed, H., & Huda, E. (2021). Financial Inclusion Policy Analysis. Shouhardo III Program, CARE Bangladesh. Retrieved from https://shouhardo.carebangladesh.org/wp-content/uploads/2022/10/SHOUHARDO-III-ARR-FY-22-ANNEX-7-Fin
Di Castri, S. (2013). Mobile money: Enabling regulatory solutions.1-40 Available at http://dx.doi.org/10.2139/ssrn.2302726
Dostov, V., Shust, P., & Khorkova, A. (2019, November). New trends in financial inclusion policies: Role of digital technologies and digital inclusion. In Third International Economic Symposium (IES 2018) (pp. 1-13). Atlantis Press.
Evans, D. S., & Pirchio, A. (2014). An empirical examination of why mobile money schemes ignite in some developing countries but flounder in most. Review of Network Economics, 13(4), 397-451. https://doi.org/10.1515/rne-2015-0020
FinCoNet (2018). Online and mobile Payments: An overview of supervisory practices to mitigate security risks, The International Financial Consumer Protection Organisation, 1-79. Retrieved from http://www.finconet.org/ FinCoNet_Report_Online_Mobile_Payments.pdf
Gichuru, L. N. (2021). Influence of Regulatory Requirements on Financial Inclusion: A Case of the Fintech Industry in Kenya (Doctoral dissertation, United States International University-Africa).
Groppa, O., & Curi, F. (2012). Mobile Money Regulation: Kenya, Ecuador and Brazil Compared. Ecuador and Brazil Compared (September 20, 2012).
Kalvin, B., Kennedy, K., & Winnie, W. (2022). Three years of the Mobile Money Regulatory Index: Insights, opportunities and challenges GSMA, 10.
Lyman, T. R., Pickens, M., & Porteous, D. (2008). Regulating transformational branchless banking: Mobile phones and other technology to increase access to finance. World Bank Group CGAP, Focus Note 43.Available at https://policycommons.net/artifacts/1466597/regulating-transformational-branchless-banking/2114933/ on 08 Jun 2023. CID: 20.500.12592/htq4v6.
Makulilo, A. B. (2015). Privacy in mobile money: Central banks in Africa and their regulatory limits. International Journal of Law and Information Technology, 23(4), 372-391.
Mas, I., & Radcliffe, D. (2010). Mobile payments go viral: M-PESA in Kenya. Bill and Melinda Gates
Omwansa, T. (2009). M-PESA: Progress and prospects. Innovations, 107.
Ondiege, P. E. T. E. R. (2015). Regulatory impact on mobile money and financial inclusion in African countries-Kenya, Nigeria, Tanzania and Uganda. Center for Global Development (CGD), 50.
Osafo-Kwaako, P., Singer, M., White, O., & Zouaoui, Y. (2018). Mobile money in emerging markets: The business case for financial inclusion. McKinsey Global Institute, March
Porteous, D. (2006). “The enabling environment for mobile banking in Africa.” Department for International Development (DFID).3-18.
Porteous, D. (2009). Mobilizing money through enabling regulation. Innovations: Technology, Governance, Globalization, 4(1), 75-90. https://doi.org/10.1162/itgg.2009.4.1.75
Prochaska, K., & Brix, L. (2008). Regulating transformational branchless banking: Dispatches from the policy frontlines. Enterprise Development and Microfinance, 19(1), 31-45. https://doi.org/10.3362/1755-1986.2008.004
Stapleton, T. (2013). Unlocking the transformative potential of branchless banking in Indonesia. Bulletin of Indonesian Economic Studies, 49(3), 355-380. https://doi.org/10.1080/00074918.2013.850633
Sultana, R. (2014). Mobile Financial Services (MFS) Business and Regulations: Evolution in South Asian Markets, 1-25.
Staschen, S., & Meagher, P. (2018).Basic Regulatory Enablers for Digital Financial Services. Focus Note 109. Washington, D.C.: CGAP.
Saunders, M., Lewis, P., & Thornhill, A. (2009). Research methods for business students. 5th ed. Pearson education. England.1-649
Tabachnick, B. G., & Fidell, L. S. (2007). Experimental designs using ANOVA (Vol. 724). Belmont, CA: Thomson/Brooks/Cole.
Tarazi, M., & Breloff, P. (2010). Nonbank e-money issuers: regulatory approaches to protecting customer funds. Focus Note, 63, 1-10. , Washington,D.C.
Weber, R. H., & Darbellay, A. (2010). Legal issues in mobile banking. Journal of Banking Regulation, 11, 129-145. https://doi.org/10.1057/jbr.2009.16
Copyright (c) 2023 Mohammad Rezaul Kabir, Mohammad Amzad Hossain
This work is licensed under a Creative Commons Attribution 4.0 International License.
CRIBFB is licensed under a 