FE Report

Former Governor of Bangladesh Bank Dr Salehuddin Ahmed said Wednesday the country's banking sector can develop a lot by next year if automated clearing house system is implemented quickly and properly.

"Time has come to get into action, rather than remain rhetoric," he said while addressing a gathering in the city.

The former governor was speaking at a seminar titled 'Bangladesh Automated Clearing House (BACH), organised by Citibank N.A.

His comments came just days before the deadline for the introduction of automated clearing house ends.

The central bank is introducing BACH aiming to facilitate business activities through modernising the payment and settlement system.

Under the new system, payments will be settled using automated cheque clearing system and electronic fund transfer among 1,050 bank branches in Dhaka initially. The service will be extended across the country later.

Mr Ahmed said through automated clearing house project, Bangladesh is entering a new era of e-commerce. "But still a lot of things need to be done on the issue as e-commerce is a much broader issue."

He said Bangladesh is lagging behind in terms of payment system compared to other South Asian neighbours such as India, Pakistan and Sri Lanka.

"We do not have automated check clearing system like theirs. Bangladesh Bank should come forward with a comprehensive strategy in this regard."

Dr Ahmed said the state-owned commercial banks and some private banks are still not ready to adopt the system, which is delaying the process in the country.

The former governor thanked the most of the private commercial banks including Citibank, who pioneered electronic banking in Bangladesh, for taking the lead.

He said Bangladesh is facing problems due to lack of information as practical aspect of technology is missing here. "Once the project implemented, the check would be truncated. It will not be paper check any longer."

The central bank is implementing the project with the help of DFID, he said.

Mr Ahmed said the automated clearing house project is very much consistent with the government's Digital Bangladesh vision.

"The system demands proper attention if we really want to implement the Digital Bangladesh Vision. We have to show that we are really sincere to see the vision implemented. Bangladesh Bank can do a lot in this regard."

Citibank chief executive officer (CEO) Mamun Rashid said Internet and technology would be the way forward to revolutionise the banking in Bangladesh.

CEOs of leading banks, representatives from Bangladesh Bank and top officials from different financial institutions and market intermediaries were present on the occasion.