Bangladesh Bank

(Central Bank of Bangladesh)

Head Office

Department of Currency Management

and Payment Systems
(Payment Systems Division)

Motijheel, Dhaka-1000
Bangladesh
DCMPS (PSD) Circular Letter no.11

Date:20 /12/2011

Managing Directors/ Chief Executive Officers

All Commercial Banks

Dear Sirs,
Amendment of Guidelines on Mobile Financial Services for the Banks.

Attention is drawn to DCMPS Circular No-08 dated September 22, 2011 on the
captioned subject.
This is to inform you that some amendments are made in the mentioned guidelines.
All scheduled banks of the country are now advised to download the amended guidelines
from the website of Bangladesh Bank. The address of the website is:
www.bb.org.bd

Please acknowledge receipt.

Yours faithfully
-sd/( A.K.M Fazlur Rahman )
Deputy General Manager
Phone: 7123443

GuidelinesonMobileFinancialServices(MFS)fortheBanks

1.0 Introduction

ThebankingindustryofBangladeshhasshowntremendousgrowth involumeandcomplexityover
the recent years. Despite making significant improvements in all the areas relating to financial
viability,profitability,innovationandcompetitiveness,thereareconcernsthatbankshavenotbeen
able to include vast segment of the population, especially the underprivileged sections and rural
peopleintothefoldofbasicbankingservices.

Ontheotherhand,rapidgrowthofmobilephoneusersandwiderrangeofthecoverageofMobile
Network Operators (MNOs) has made their delivery channel an important toolofthetrade for
extendingbankingservicestotheunbanked/bankedpopulation.

In order to ensure the access of unbanked people by taking advantage of countrywide mobile
networkcoverage,BangladeshBankhasbroughtouttheseoperatingguidelinesforadoptionbythe
commercialbanksofBangladesh.

2.0 Issuance

BangladeshBankisissuingthisguidelinesaspertheArticle7A(e)ofBangladeshBankOrder,1972
andSection4ofBangladeshPaymentandSettlementSystemsRegulations,2009.

3.0 Purpose

ThepurposeoftheseGuidelinesisto:

I.
ProvideregulatoryframeworkfortheMobileFinancialServices[MFSs]whichwillcreatean
enablingenvironmentforinnovationsinfinancialservices;
II.
Minimizetheusageofcashanditsassociatedcosts;
III.
Ensure compliance with AntiMoney Laundering and Combating Financing of Terrorism
(AML/CFT) standards setby AML/CFT rules, regulations, guidelines and instruction issued
byBangladeshBank;and
IV.
Promote accessibility to formal financial services especially to the poor and unbanked
populationatanaffordablecost.

4.0 Scope

The guidelines shall apply to the scheduled commercial banks and their subsidiaries operating in
Bangladesh.

5.0 MobileFinancialServices

BangladeshBankmayallowthefollowingMobileFinancialServices(inbroadcategories)

I.
Disbursementofinwardforeignremittances,
II.
Cashin/outusingmobileaccountthroughagents/Bankbranches/ATMs/MobileOperators
outlets.
III.
PersontoBusinessPaymentse.g.a.utilitybillpayments,b.merchantpayments
IV.
Business to Person Payments e.g. salary disbursement, dividend and refund warrant
payments,vendorpayments,etc.
V.
Government to Person Payments e.g. elderly allowances. Freedomfighter allowances,
subsidies,etc.
VI.
PersontoGovernmentPaymentse.g.tax,levypayments.
VII.
Person to Person Payments (One registered mobile Account to another registered mobile
account).
VIII.
Otherpaymentslikemicrofinance,overdrawnfacility,insurancepremium,DPS,etc.

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6.0 PermissibleModels

Depending on the operation, responsibility and relationship(s) among banks, MNOs, Solution
Providersandcustomersmainlytwotypesofmobilefinancialservices(BankledandNonBankled)
arefollowedworldwide.

Fromlegalandregulatoryperspective,onlythebankledmodelwillbeallowedtooperate.

The bankled model shall offer an alternative to conventional branchbased banking to unbanked
populationthroughappointedagentsfacilitatedbytheMNOs/SolutionProviders.

Customeraccount, termed "Mobile Account"will rest with the bank and will beaccessible through
customersmobiledevice.

MobileAccountwillbeanonchequinglimitedpurposeaccount.

7.0 RegulatoryIssues

7.1 ApprovalfromBangladeshBank

1. WithouthavingapprovalfromBangladeshBanknobankisallowedtodosuchbusiness.
2. Banks willing to provide Mobile Financial Services shall seek prior approval from Bangladesh
Bank,withfulldetailsoftheservicesincludingtentativeimplementationschedule.
3. Banks shall have to submit agreement(s)/MOU(s) containing Service Level Agreement (SLA)
signedbetweenbanksandtheirpartners/agentsbeforelaunchingtheproduct.
4. TheCashPoints/AgentsshallhavetobeselectedbythebankandalistoftheCashPoints/Agents
with their names and addresses shall have to be submitted to the Department of Currency
Management and PaymentSystem (DCMPS), BangladeshBank andwill be updatedonmonthly
basis.
5. Atanypointoftime,therelevantbalanceinbankbookshallbeequaltothevirtualbalanceofall
registered mobile accounts shown in the system. Banks will be the custodian of individual
customers'deposits.
6. The inward foreign remittance (credited to Nostro Accounts of Banks) transfer arrangement
throughdesignatedCashPoints/Agentswillbeusedonlyfordeliveryinlocalcurrency.
7. The platformshould not be used for cross border outwardremittance of funds without prior
approvalfromBangladeshBank.
8. Bangladesh Bank may withhold, suspend or cancel approval for providing MFS services if it
considers any action by any of the parties involved in the system detrimental to the public
interest.

7.2 OpeningofMobileAccounts

Banksmustensurethata'MobileAccount'hasbeenopenedforeachcustomerseekingtoavail
MobileFinancialServiceswithalltherequireddocuments(asperKYCformofAnnexure1).

7.3 TransactionLimit

BangladeshBankwillfixthetransactionlimitaswellasoverallcap(percustomer/permonth)
forPersontoPersonPaymentsasandwhenneeded.

7.4 ChargefortheServices

FortheseproductsandservicesBanksmayfixupchargeswhichwillbeunderBangladeshBank
oversight.

7.5 Interest/Profit

Banksshallpayinterest/profitonthedepositslyingwiththecustomersmobileaccounts.

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7.6 AntiMoneyLaunderingCompliance

1. Banks and its partners shall have to comply with the prevailing AntiMoney Laundering
(AML)/CombatingtheFinancingofTerrorism(CFT)relatedlaws,regulationsandguidelines
issuedbyBangladeshBankfromtimetotime.
2. Banksshallhavetouseanew'KnowYourCustomer(KYC)'formatasgiveninAnnexI.TheBank
willberesponsibleforauthenticityoftheKYCofallthecustomers.
3. Banks shall have to follow full KYC format issued by Anti Money Laundering Department
(AMLD)ofBangladeshBankforthecashpoints/agents/partners.
4. Banks shall ensure that suspect transactions can be isolated for subsequent investigation.
BanksshalldevelopanITbasedautomatedsystemtoidentifysuspiciousactivity/transaction
report(STR/SAR)beforeintroducingtheservices.
5. BanksshallimmediatelyreporttoAntiMoneyLaunderingDepartmentofBangladeshBank
regarding any suspicious, unusual or doubtful transactions likely to be related to money
launderingorterroristfinancingactivities.

7.7 RiskMitigation

1. Banks shall be responsible for mitigation of all kinds of risks such as liquidity risk,
operational risks, fraud risks including money laundering and terrorist financing risks.
Technicalrisksshouldbecoveredbythesolutionprovider.
2. The banks bear all the liabilities that arise from improper action on the part of their
subsidiaries/cashpoints/agents/partners.

7.8 RecordRetention

MFS transactionrecords must be retained for six (06) years from the origination date of the
entry. The Participating Bank(s) must, if requested by its customer, or the Receiving Bank(s),
provide the requester with a printout or reproduction of the information relating to the
transaction.BanksshouldalsobecapableofreproducingtheMFStransactionrecordsforlater
reference,whetherbytransmission,printing,orotherwise.

8.0 SelectionofPartners/Agents

Itisthebanksresponsibilitytoidentify,contract,educate,equipandmonitoractivitiesoftheagents
onaregularbasis.Theremustbeclear,welldocumentedAgentSelectionPolicyandProcedures.The
agreementsignedbetweenthebanksandtheagentswillprimarilyincludebusinesshoursofthecash
points/agents, standard of performance, fees permissible by Bangladesh Bank, customer service,
dispute resolution procedure and proper signage. Those who have countrywide branch network
suchasNGOs,theMNOsorGovt.PostalDepartmentmayactaspartner/agent.Banksshouldpublish
listaswellasaddressesofcashpoints/agents/partnersintheirwebsite.

Thefollowingissuesshouldbetakenintoaccountforselectionofpartners/agents:

1. Competencetoimplementandsupporttheproposedactivity;
2. Financialsoundness;
3. Abilitytomeetcommitmentsunderadverseconditions;
4. Businessreputation;
5. Securityandinternalcontrol,auditcoverage,reportingandmonitoringenvironment;

9.0 OversightIssues

Banksshallhavetofollowrules,regulations,guidelinesandinstructionsissuedbyBangladeshBank
fromtimetotimeandpreserverecordsasperAnnexII,III,IVandVforBangladeshBankoversight.

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10.0
SecurityIssues

1. Banks shall have to follow the Guidelines on ICT Security for Scheduled Banks and Financial
Institutions, 2010 issued by the Bangladesh Bank and ICT Act, 2006 to address the security
issuesofMobileFinancialServices.
2. The following properties need to be addressed to offer a secure infrastructure for financial
transactionsusingmobiletechnology:
a. Confidentiality: Property that ensures transaction information cannot be viewed by
unauthorizedpersons.
b. Integrity:Propertythatthetransactioninformationremainsintactduringtransmissionand
cannotbealtered.
c. Authorization: Property that the authentic user has proper permission to perform the
particulartransaction.Itensureshowthesystemdecideswhattheusercando.
d. Nonrepudiation: Property that the particular transaction initiated by a user cannot be
deniedbyhim/herlater.
3. AllthetransactionsmustbeauthenticatedbytheaccountholdersusingtheirrespectivePersonal
Identification Number (PIN) or similar other secured mechanism. To facilitate the mobile
financialservices,thesaidPINmaybeissuedandauthenticatedbythebankmaintainingproper
protectionandsecurityfeatures.
4. Thebanksshouldensurethataproperprocessisputinplacetoidentifythecustomerwhenthe
serviceisbeingenabled.
5. Asecondfactorofauthenticationshouldbebuiltinforadditionalsecurityaschosenbythebank.

11.0
Interoperability

1. Banksmaylinktheirmobilefinancialserviceswiththoseofotherbanksfortheconvenience
oftheusers.
2. Mobileaccountmaybelinkedwithcustomer'sbankaccount(ifany).

12.0
Customer/EmployeeEducationandAwareness

Banksshalltakeappropriatemeasures(mayissueproperguidelinesfordealingwithcustomer
serviceandcustomereducation)toraiseawarenessandeducatetheircustomersandemployees
forusingMobileFinancialServices.

13.0
ComplaintsandGrievanceRedressalProcedure

1. Banks shall be held responsible to protect consumer rights and dispute resolution. Banks may
addressdisputeresolutionwiththeassistanceofselectedpartners/agents.
2. Banks shall have to disclose the risks, responsibilities and liabilities of the customers on their
websitesand/orthroughprintedmaterial.Customersmustbemadeawareoftheriskspriorto
signup.
3. Bilateral contracts drawn up between the payeeand payees bank, the participating banks and
serviceprovidersshouldclearlydefinetherightsandobligationsofeachparty.
4. Thegrievancehandlingprocedureincludingthecompensationpolicyshouldbedisclosed.
5. Whenever any consumer is dissatisfied by the action of the bank, the consumer can register
complaintwithBangladeshBanktomediatethedispute.Inthat casedecisionfromBangladesh
Bankwillbefinal.

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AnnexI
KYCProfileForm

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

12.

13.

NameoftheClient
Father'sName
Mother'sName
DateofBirth
Occupation
OfficialAddress(Ifavailable)
PresentAddress
PermanentAddress
MobileNo.
PurposeofTransaction
BankAccountInformation
(Ifavailable)
a. BankName
b. Branch
c. AccountNo.
IntroducerInformation
a. Name
b. Address
c. Occupation
d. Mobileno.
Attachment
(Anyoftheundermentioned)
a. CopyofNationalIDCard
b. CopyofCitizenshipCertificate
c. CopyofDrivingLicense/Passport
etc.

Preparedby

:
:
:
:

:
:
:

PHOTOGRAPH
(Passport size)

Approvedby

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AnnexII

MonthlyReportofMobileFinancialServicesofInwardForeignRemittances
NameoftheBank
Date
Sl.
No.
1.
2.
3.

N.B.:

NameoftheRemitter

:
:
Amount
Sent

NameoftheBeneficiary

(Tk.20,000andabove)
Amount
Disbursed

RemittancelessthanTk.20,000shallhavetobereportedonconsolidatedbasismentioningtotalnumber
andamountofremittance.

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AnnexIII

MonthlyReportofPersontoBusinessMobileFinancialTransactions
NameoftheBank
Date
Sl.
No.
1.
2.
3.

N.B.:

Mobile
AccountNo.of
thePayer

:
:
NameofthePayer

MobileAccountNo.of
theBusiness
Organization

Nameofthe
Business
Organization

(Tk.20,000andabove)
Amount
Transferred

TransactionamountlessthanTk.20,000shallhavetobereportedonconsolidatedbasismentioningtotal
numberandamount.

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AnnexIV

MonthlyReportofBusinesstoPersonMobileFinancialTransactions
NameoftheBank
Date
Sl.
No.
1.
2.
3.

N.B.:

:
:

NameoftheBusinessOrganization

NumbersoftheBeneficiary

(Tk.20,000andabove)
AmountDisbursed

TransactionamountlessthanTk.20,000shallhavetobereportedonconsolidatedbasismentioningtotal
numberandamount.

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AnnexV

MonthlyReportofPersontoPersonMobileFinancialTransactions

NameoftheBank
Date
Sl.
No.

1.
2.
3.

N.B.:

:
:

Mobile
AccountNo.
ofthe
Sender

Nameof
the
Sender

Sourceof
Incomeof
the
Sender

Relationship
withrecipient

Mobile
Account
No.ofthe
Receiver

Nameof
the
Receiver

(Tk.20,000andabove)
Purpos Amount
eof
Transfer
the
red
transe
ction

TransactionamountlessthanTk.20,000shallhavetobereportedonconsolidatedbasismentioningtotal
numberandamount.

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