A joint venture of Bangladesh’s Trust Bank Limited and Malaysia’s Axiata Group is set to roll out a new kind of mobile financial service (MFS) in Bangladesh after it received a no-objection certificate from the central bank on Wednesday.
The Kuala Lumpur-based group is the parent company of Bangladesh’s second largest mobile phone operator Robi and controls a 68.7 per cent stake. Robi currently has 47.9 million active subscribers.
Axiata Digital Ltd, the digital services arm of the group, has partnered with Trust Bank, a private commercial bank, to join the growing MFS sector.
The joint venture is planning to promote wallet-based services, which will ultimately help expedite financial inclusion in the country, Faruq Mainuddin Ahmed, managing director of Trust Bank, told the Daily Star on Wednesday.
In 2015 both parties reached a consensus and decided to form a joint venture company styled Trust Axiata Digital Ltd, where the bank would hold 51 per cent stake.
The entity’s initial paid-up capital has been proposed to be 450 million taka ($5.3 million).
Axiata Digital currently offers digital financial services in Malaysia, Sri Lanka, Cambodia and Indonesia – the countries where Axiata Group has mobile business. In these markets, Axiata Digital is offering various savings products and fixed deposit. Even customers can get business loans through accounts.
As mobile phone operators in Bangladesh cannot run MFS on their own, Robi has not been part of the joint venture.
A senior official of Trust Bank says they have got a year and within the timeframe they will get the joint venture registered. The board will comprise four members from the bank and three from Axiata.
He also said some senior officials from Axiata Digital will come to Dhaka to design products.
Of the 57 banks in Bangladesh, only Brac Bank has set up a subsidiary, bKash, to operate MFS.
Currently, there are 16 MFS providers in the country.
As of June, there were 72.1 million registered MFS accounts. Of them, 32.4 million are active users.
The volume of transactions was 317.08 billion taka in June and 422.36 billion taka in May.
Currently, many companies pay salaries and wages to their employees and staff through MFS accounts. The government also accepts various fees and charges. Thanks to the MFSs, users can pay various bills and use mobile wallets to buy goods and services and the number is growing rapidly.
Trust Bank started its journey in 1999 and has a network of 111 branches, small and medium-sized enterprise centres, 222 automated teller machine booths, more than 20,000 pay points and 65 points of sale.
The bank introduced automated branch banking in 2001 and online banking in 2007. Its paid-up capital is nearly 4.69 billion taka and was listed on the stock exchanges in 2007. THE DAILY STAR (BANGLADESH)/ANN