Transactions through mobile financial services (MFS) dropped by more than 34 per cent in August as people resumed normal banking despite the Covid-19 pandemic.
The expiry of the tenure of the stimulus package for the payments of salary of the workers of export-oriented readymade garment (RMG) sector also pushed down such transactions using the digital channels, officials said.
Total MFS transactions came down to Tk 414.04 billion in August 2020 from Tk 629.99 billion in the previous month, according to the central bank’s latest statistics.
“It’s a normal trend in MFS transactions,” a senior official of the Bangladesh Bank (BB) told the FE.
Transactions through MFS were Tk 397.85 billion in March this calendar year.
But July’s transactions were higher because an increasing number of people, businesses and government agencies used such digital services for making their payments to avoid movement, according to the central banker.
Echoing the BB’s official, Abu Reza Mohd. Yeahia, deputy managing director of Islami Bank Bangladesh Limited (IBBL), said the use of alternative delivery channels (ADCs) has been squeezed gradually after reopening of the economic activities.
The ADCs include ATM (automated teller machine), POS (point of sale), e-payment gateway and MFS through which a customer can access financial services.
Bangladesh’s overall economic activities almost halted during the 66-day coronavirus shutdown that started from March 26. And it was lifted on May 31. During the shutdown period, the people were confined to their homes, grinding the overall economic activities to a halt.
“People are now returning to traditional banking as the bank branches and outlets are now functioning as usual,” the private banker explained.
Also, the government’s payments under its different social safety net programmes and stipend for students were insignificant in the month of August, the BB data showed.
The government payments through MFS dropped by more than 98 per cent to Tk 149.70 million in August from Tk 10.77 billion a month before.
Besides, salary disbursement using such digital platforms came down to Tk 10.64 billion in August from Tk 45.87 billion in the previous month.
“Most of the exporters, particularly in the RMG sector, cleared their workers’ wages with the government announced stimulus package from April to July 2020 using the MFS as per the requirement,” the central banker noted.
Inward remittance, cash-in, cash-out and person-to-person transactions through the MFS also dropped significantly in August after seeing a significant rise in recent months.