Independent Final Report

On

Mobile Financial Services in Bangladesh: The Case of bKash

by
Siddique Md Mehdarul Faiz
ID: 52120002

March 2023

Independent Final Report Submitted To

Ritsumeikan Asia Pacific University

In Partial Fulfillment of the Requirements for the Degree of

Master of Business Administration

i
 Table of Contents

Title Page ........................................................................................................................... i

Table of Content ............................................................................................................... ii

Certification ..................................................................................................................... iv

Acknowledgment .............................................................................................................. v

Abstract ............................................................................................................................ vi

1 Introduction ................................................................................................................... 1

1.1. Objectives and Question ................................................................................ 2

1.2. Scope and Limitations.................................................................................... 2

2 Literature Review ........................................................................................................... 5

3 Methodology .................................................................................................................. 7
4 Results and Findings ...................................................................................................... 8

4.1 Discussion ..................................................................................................... 10

4.1.1 Mobile Banking in Developed Countries....................................... 10

4.1.2 Mobile Banking in Developing Countries ..................................... 11

4.1.3 Business Model of MFS ................................................................. 13

4.1.4 Pros and Cons of MFS ................................................................... 14

4.1.5 Key to The Success of MFS............................................................ 15

4.1.6 Various Types of Mobile Banking.................................................. 16

4.1.7 Mobile Financial Services in Bangladesh ....................................... 17

4.1.8 bKash, the Major MFS Provider in Bangladesh............................. 18

4.1.9 Legal Compliance of bKash ........................................................... 19

4.1.10 Opening A bKash Account .......................................................... 19

4.1.11 bKash's Contribution to Savings through MFS ........................... 21

4.1.12 CSR of bKash ............................................................................... 22

5 Conclusion ................................................................................................................... 22

6 Recommendation ......................................................................................................... 25

References ....................................................................................................................... 22
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Appendix 1. Scheduled and Non-Scheduled Banks of Bangladesh in 2022 ................... 22

Appendix 2. Mobile Finance Service Provider in 2022 .................................................. 22

Appendix 3. Data Analysis with Rejected Values ........................................................... 22

iii
 Certification

I, Siddique Md Mehdarul Faiz (52120002) hereby declare that this Independent Final
Report is true and original. The information and materials presented here have never been
submitted to a different college or university in order to receive a certificate or award.
The data was gathered from other researchers and publishers, and it was all properly
referenced and recognized.

___________________________________________
Siddique Md Mehdarul Faiz
2023/01/13

iv
 Acknowledgement.

Firstly, I would like to take this time to extend my deepest and sincere gratitude and
appreciation to my supervisor Professor Pardo Phillip and to all the supervisors who
assisted me. Your guidance, understanding, kindness and continuous assistance inspires
me to complete this Research Report. Thank you so much for your invaluable support. I
further extend my thankyou to the University and staff who have provided me necessary
assistance during my study.

To my friends in APU, I appreciate your encouragement and friendship during my study.

I genuinely appreciate all the experiences you shared with me.

Last but not the least, to my parents, without you I am nothing. Never goes a day that I
feel so privileged as a son to you. My deepest and sincere appreciation to you. Thank you
for loving me and supporting my dreams.

v
 ABSTRACT
Mobile financial services (MFS) which is a tool of financial inclusion has aided the
disadvantage and low-income individuals in remote areas of Bangladesh to get access to
various financial services without visiting a bank or an ATM. Mobile banking has brought
around 48% of the people in Bangladesh under its umbrella so even people living in
remotest part of the country can get their banking transactions done. Numerous
stakeholders can profit from mobile banking. The adoption of mobile banking will boost
the economy's GDP, encourage entrepreneurship, and increase money flow on a macro
level MFS is desirable because there are many uneducated people in the rural areas for
whom the process of banking is complicated, they might not have access to a bank or
ATM nearby and recently the price of smartphones is going down drastically but have a
better network speed and cheaper data plans. Financial inclusion is very important for the
enhancement of the economy of a developing country and in the case of Bangladesh it is
mainly being done through mobile banking. MFS provides stability to the banks with an
increased cashflow which in turn stabilizes the economy.
Through the research I want to study:

• What is the impact of average daily transactions on the revenue of bKash?

• What are the factors assisting in the development of mobile banking services?

• What is the contribution of bKash to the development of mobile banking in

Bangladesh?

The sources of the research will be mainly based on the secondary data collected from
the selected commercial bank websites for the financial reports, Bangladesh
Telecommunication Regulatory Commission (BTRC) and the central bank known as
Bangladesh Bank (BB). The collected data will be used in Microsoft Excel for descriptive
statistics to compare the data and in SPSS to run the linear regression to support the
hypothesis.

vi
 Chapter 1. Introduction

Bangladesh is a small country with a meager economy inscribed on the world map in
1971 after gaining independence from the grasp of the colonizing country. Since then, the
country has survived and grew with many ruling parties until the recent years where the
country has outperformed its neighbors and seen a constant rise in economic growth.
Bangladesh had a negative GDP growth of -2.12% from 1971 to 1975 but has managed
to achieve positive average GDP growth of 5.10% from 1976 to 2020, with 2019 being
the highest at 8.15% (Figure 1). Despite 2020 being affected by Covid-19 Bangladesh
still managed to keep the growth in the positive. The GDP per capita averaged a meager
$161.42 between 1971 to 1975 but since 1976 it averaged at $575.95. Since 2014 the
GDP per capita rose above $1000 with 2020 being the highest at $1961.61 (Figure 1). All
this achievement came through years of contribution from the financial inclusion.

Financial inclusion is providing financial products and services at an affordable cost made
accessible to individuals and businesses especially to the low income and underprivileged
society to improve their lives (The World Bank, 2022). Financial inclusion is beneficial
for multiple parties as at the macro level it will escalate the flow of money, encourage
entrepreneurship, and contribute to growth in GDP.

With the advent of the Internet, the financial services industry has undergone a total
transformation in terms of how business is conducted. Companies now have access to
innovative business models and ways to offer their customers round-the-clock service.
Online banks, brokers, and wealth managers that provide specialized services have
emerged as a result of the capacity to conduct financial transactions online, however they
still make up a very small portion of the financial services market. Mobile phone adoption
in European countries is very high (at least 80% of customers own a mobile phone), while
mobile infrastructure in Asian countries like India, China, Bangladesh, Indonesia, and the
Philippines is comparable to or even superior to centralized infrastructure.

Banks play a major role in financial inclusion by providing various financial products and
services and stabilizes the economy. Bangladesh's banking sector had six nationalized
commercial banks at its inception, along with three state-owned specialty banks and nine
foreign banks. Private banks' entry into the market in the 1980s resulted in a significant
expansion of the banking sector. (Bangladesh Bank, 2022). There are 61 Scheduled Banks
under the jurisdiction of the Bangladesh Bank Act, 1972 and 5 Non-Scheduled Banks
which are set up to achieve a certain and defined goal. (Appendix 1)

Financial inclusion is very important for the enhancement of the economy of a developing
country and in the case of Bangladesh it is mainly being done through mobile financial
services. In order to allow clients to execute banking transactions while on the go, mobile
financial services (MFS) link banking with mobile wireless networks. This refers to the
capability of utilizing a mobile device to deposit, withdraw, transmit, and receive money.
Bank agents are routinely used to facilitate these services, enabling mobile account
holders to do transactions outside of bank branches at independent agent sites.
(Bangladesh Bank & CGAP, 2012).

1
The banking industry has grown significantly over the last few years. However, there are
worries that, due to high operating expenses, banks have been unable to bring a large
portion of the population into the fold of basic financial services, particularly those from
distant and rural areas. The majority of Bangladeshis especially in the rural areas do not
have access to a secure and trustworthy money transaction mechanism through a
traditional banking system or ATM. People who did not have a bank account used to send
money via the slow and unreliable postal money transfer services or through middlemen
(Bangladesh Bank & University of Dhaka, 2017). Due to the recent fall in prices of
smartphones and a better network speed with cheaper data have made mobile financial
services very much accessible in Bangladesh (Figure 2). The number of mobile phone
subscribers have gone up somewhat consistently from 86.56 to 171.85 million between
2012-2021. As the number of subscribers increased significantly over the ten years period
the number of people with access to mobile banking also saw a consistent rise from 3.02
to 111.47 million. This increase in number of clients encouraged the MFS sector to grow
and for more banks to provide the service which helped with the scope of financial
inclusion and boosted the economic growth.

1.1 Objectives and questions.

The report seeks to portray the overall scenario of the mobile financial services in
Bangladesh and determine how financial inclusion through mobile financial services is
empowering the banks which is contributing to the economic growth. The objective of
the report is to find the answer for the following questions:

• What is the impact of average daily transactions on the revenue of bKash?

• What are the factors assisting in the development of mobile banking services?

• What is the contribution of bKash to the development of mobile banking in

Bangladesh?

1.2 Scope and limitations.

This report will cover only analysis of the market leaders in the mobile finance sector and
use the monthly and annual data from 2018 to 2021. The study will be based on the
secondary data collected from the government websites and the selected banks. Therefore,
some essential reasons to explain can be partially answered based on the massive banking
industry and the financial services provided by them.

2
 2,500.00 15.00

10.00
2,000.00
Figure 1. GDP Growth Rate and the Capita 5.00

1,500.00
-

(5.00)
1,000.00

(10.00)
500.00
(15.00)

- (20.00)
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

GDP per capita (current US$) GDP growth (annual %)

Source: World Bank

For more information, please see: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=BD

3
Figure 2. Mobile Phone Subscribers & Mobile Banking Clients

Mobile Phone Subscribers & Mobile Banking Clients(in millions)

200

150

100

50

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Mobile Phone Subscribers Mobile Banking Clients

Source: Bank of Bangladesh, and Bangladesh Telecommunication Regulatory

Commission (BTRC), Accessed on 19/04/2022.
For more information, please see:
https://www.bb.org.bd/en/index.php/financialactivity/mfsdata
http://www.btrc.gov.bd/site/page/0ae188ae-146e-465c-8ed8-d76b7947b5dd/-

4
 Chapter 2. Literature Review.

The banking sector's digital transformation is poised to enter a new phase. Financial
services companies, however, are now sufficiently prepared to keep up with technology
breakthroughs and inventively adapt those to enhance customer service. (Deloitte Center
for Financial Services, 2014). Financial inclusion is a stimulant for societal economic and
social growth, but there is still a long way to go to attain the desired result for developing
countries (Sharma & Kukreja, 2013). The elimination of poverty, the enhancement of
personal and household welfare, and the promotion of entrepreneurship and small
business activities can all be aided by access to financial services. Simultaneously,
economies with increased financial access and facilitation for all expand quicker and have
less income disparity (UNDESA and MCIT, 2012).

Financial inclusion has come a long way in recent years, thanks to new technology,
communications infrastructure-enabling legislation, and commercial opportunities at the
bottom of the pyramid (Cheston et al, 2016). One of the best technological stories of the
previous decade is the spread of mobile phones in developing countries. Indeed, mobile
phones are likely to outnumber bank accounts in those countries (Proteus, 2006).
Customer experience is being dramatically reshaped by mobile technology. Consumers
are linked to using mobile devices to an extent unequaled by any kind of technology in
the past due to mobile's availability and convenience of use. Mobile is gradually
becoming the major mode of communication with financial services providers for many
people. Even though users are familiar with such mobile services, many are hesitant to
utilize them due to security, privacy, and simplicity of use concerns (Deloitte Center for
Financial Services, 2014).

The mobile financial system provides an easy way to manage money without having to
deal with cash. The time and distance restrictions for numerous banking transactions are
eliminated by this capability. Customers now find banking more convenient, and their
banking transactions have been enhanced. In addition to banking, it is used to pay bills,
purchase tickets, recharge mobile devices, and other things. Through increasing consumer
transactions, mobile banking enables banks to interact with their customers more
frequently and to make money. Mobile banking is a service that mobile phone companies
are considering offering to their clients. Banks and financial organizations, on the other
hand, see mobile banking as a way to reach out to "the financially excluded." Government
authorities has a similar interest as well but are addressing security and taxation concerns.
Surprisingly, academic research on the impact of mobile banking on emerging economies
is rare (Maurer, 2008). If given a minimal incentive and instruction, illiterate households,
particularly women, can accept and use mobile banking technology, according to a study
titled "Mobile Banking and Remittances: Evidence from Migrant Workers of Urban
Bangladesh". Despite the fact that many of the homes in the survey were illiterate, the
study indicated that training could assist bridge the digital gap. The study, which focuses
on the impact of mobile banking on household welfare, indicates that mobile money has
beneficial benefits on remittance frequency, health, and education results for rural
households, as well as a reduction in borrowing. The findings point to mobile banking as
a possible option for broader financial inclusion in emerging nations (International

5
Growth Centre (IGC) and BRAC Institute of Governance and Development (BIGD) ,
2016). The banking business in Bangladesh has grown dramatically during the last few
years. However, there are worries that, due to high operating expenses, banks have been
unable to bring a large portion of the population into the loop of basic financial services,
particularly those from distant and rural areas. In 2021 the population of Bangladesh was
166.3 million (Statista, 2021), and the BTRC reported that the number of mobile phone
subscribers were 171.85 million as a person can have more than one mobile subscription
but have only 124.8 million bank accounts. As a result of this circumstance, the
Bangladesh Bank decided to allow commercial banks to provide financial services over
mobile networks to the people either dealing with banks or not, which are known as
mobile banking, mobile transfers, and mobile payments.

In Bangladesh, the mobile financial system is widely utilized for bill payment, savings,
and remittance, but not so much for credit and insurance (The Boston Consulting Group,
2011). The development of MFS as a financially viable, secure, and competitive banking
system is what Bangladesh Bank, the country's central bank, is aiming for. MFS can
expand the number of service points available throughout the financial system while
lowering expenses. A significant advantage of MFS is its ability to attract a large number
of unbanked people to the formal financial sector. It can also develop into essential
infrastructure that reduces costs and boosts productivity throughout the banking industry
and the overall economy (Bangladesh Bank, 2012). Bangladesh Bank is assisting the
government's efforts by encouraging financial inclusion and environmentally sustainable
financing through its own programs, and mobile financial services have emerged as a
crucial tool for financial inclusion activities (Chowdhury, 2016) while financial inclusion
in Bangladesh is greatly facilitated by bank credits to the agriculture sector (Sarker,
Ghosh , & Palit, 2015).

Bangladesh Bank (2012) publishes a policy document titled "Mobile Financial Services
in Bangladesh: An Overview of Market Development," which provides a market-level
overview of Bangladesh's early-stage development with MFSs. In the context of
Bangladesh, all prior publications acknowledge the growing role of MFSs in poverty
reduction and economic well-being.

6
 Chapter 3. Methodology.

A descriptive approach has been taken to write this report. The paper is descriptive in
structure because it makes an effort to gather information and data and do statistical
analysis.

Mainly two types of data have been used to study and complete the report. Qualitative
data to analyze the report statistically and Quantitative data to explain the factors through
literature.

The quantitative data have been used to explain the factors affecting the revenue of bKash
and qualitative data to describe the mobile banking situation in macro level and in micro
level and the contribution of bKash towards the mobile banking industry in Bangladesh.

Mainly secondary source of data has been used. The information is derived from the
findings of other researchers, not from their own observations. Government websites,
magazines, periodicals, books, journals, and other writers' writings are a few of the
important secondary sources.

The collected data has been used in Microsoft Excel for descriptive statistics to compare
the data and in SPSS to run the correlation to support the hypothesis.

7
 Chapter 4. Finding and results.

I propose the model to analyze the data that I have collected shown in the Appendix 3 to
portray the impact of average daily transactions on the revenue of bKash. I developed the
model mentioned below to prove it.

OLS 𝑌 = 𝑎 + 𝐵𝑖 𝑋𝑖 + 𝜖
Model i= 1,2,3

Y= Revenue of bKash, in Core BDT

X1= No of average daily transaction

X2= Mobile banking customers
X3= Mobile phone subscribers

a= Intercept, when Xi =0, the minimum revenue will be represented in a-value

B1, B2,
B3= Coefficients of variable X1, X2, and X3, respectively

E= Error, unobserved parameters

Table 1: Correlation Analysis

Correlations
Avg daily Mobile Mobile
Revenue trans banking cust phone subs
Revenue Pearson 1 .983 * .953* .931
Correlation
Sig. (2-tailed) .017 .047 .069
N 4 4 4 4
Avg daily trans Pearson .983* 1 .989* .960*
Correlation
Sig. (2-tailed) .017 .011 .040
N 4 4 4 4
Mobile banking Pearson .953* .989* 1 .985*
cust Correlation
Sig. (2-tailed) .047 .011 .015
N 4 4 4 4

8
 Mobile phone Pearson .931 .960* .985* 1
subs Correlation
Sig. (2-tailed) .069 .040 .015
N 4 4 4 4
*. Correlation is significant at the 0.05 level (2-tailed).

Table 1. shows the significance of average daily transactions of bKash towards revenue
of bKash is 0.017 with coefficient correlation of 0.983. The significance of mobile
banking customers towards average daily transactions is 0.011 with correlation
coefficient of 0.989. The significance of mobile phone subscribers towards mobile
banking customers is 0.015 with correlation coefficient of 0.985.

Mobile phone Mobile banking Average daily bKash Revenue

subscribers customers transaction
Y
X3 X2 X1

The mobile phone subscribers influence the mobile banking customers which in turn
influences the average daily transactions which eventually influences the revenue of
bKash

Standard Lower Upper Lower Upper

Coefficients Error t Stat P-value 95% 95% 95.0% 95.0%
Intercept -200.907 33.38356 -6.01815 0.026517 -344.545 -57.2694 -344.545 -57.2694
X
Variable
1 1.809114 0.207646 8.712504 0.012919 0.915687 2.702541 0.915687 2.702541

Y=a+b1X1+ E
Y=-200.907+1.809114*X1(number of average daily trans)
Y is the revenue of bKash, -200.907 is the constant (in terms of X1=0) and 1.809114 is
the coefficient which will be multiplied to the number of average daily transactions of
bKash.

Standard Lower Upper Lower Upper

Coefficients Error t Stat P-value 95% 95% 95.0% 95.0%
- -
Intercept -1202448 905767.6 -1.32755 0.315587 5099652 2694755 5099652 2694755

9
X
Variable
1 93833.66 9945.869 9.434436 0.011049 51040.04 136627.3 51040.04 136627.3

X1=-1202448+93833.6*X2(number of mobile banking customers)

X1 is the number of average daily transactions of bKash, -1202448 is the constant (in
terms of X2=0) and 93833.6 is the number of mobile banking customers.

Standard Lower Upper Lower Upper

Coefficients Error t Stat P-value 95% 95% 95.0% 95.0%
Intercept -200.907 33.38356 -6.01815 0.026517 -344.545 -57.2694 -344.545 -57.2694
X
Variable
1 1.809114 0.207646 8.712504 0.012919 0.915687 2.702541 0.915687 2.702541

X2=-200.907+1.809114*X3(number of mobile phone subscribers)

X2 is the number of mobile banking customers, -200.907 is the constant (in terms of
X3=0) and 1.809114 is the number of mobile phone subscribers.

Revenue of bKash is highly correlated to average daily transactions, number of mobile

banking customers and number of mobile phone subscribers. However, the number of
average daily transactions predicts the revenue of bKash better than the other two factors.
The number of mobile phone subscribers forecasts the number of mobile banking
customers. The number of mobile banking customers in turn forecasts the average daily
transactions.

bKash will lose its revenue if there are no or few daily transactions at a 90% confidence
level even though people are using mobile banking services or subscribed mobile phones.
However, there is a chance that the revenue of bKash will possibly stimulate if people
start using mobile banking services.

4.1. Discussion of the factors assisting in the development of mobile banking services.

4.1.1. Mobile Banking in developed countries.

Global banking and payment business is undergoing a revolution because of mobile

technology. It presents new chances for banks to increase the convenience they give to
their current clients in industrialized nations and connect with sizable numbers of
unbanked clients in emerging regions. In industrialized nations, almost everyone owns a
mobile phone, and some users have multiple cell subscriptions. In the United States and

10
France, mobile penetration is at 105%; in the United Kingdom and Germany, it is at 130%.
However, mobile banking is still rarely used in most countries and is only recently
available in several of these areas. PayPal has become a major force in online and mobile
payments in the US. Beginning as a person-to-person (P2P) electronic payment network
in 1998, PayPal quickly expanded after eBay acquired it so that its customers could pay
vendors using PayPal. (Gupta, 2013).

83% of respondents to bi intelligence's cell banking aggressive facet study indicated they
utilize mobile banking, and banks are investing at previously unheard-of levels in mobile
banking capabilities: For instance, bank of the USA maintained its 2017 mobile banking
expenditure from 2015 while tripling it in 2016 (Toplin, 2018).

4.1.2 Mobile Banking in Developing countries.

Building a 21st century infrastructure allows poor countries to surpass wealthy ones
(because they have little legacy infrastructure to begin with). For instance, India advanced
from having no landlines to the most modern wireless telecommunications. India is
moving away from traditional brick and store banking toward wireless banking as a result
of that revolution. Other developing nations exhibit such patterns, as well. M-Pesa, a
mobile payment system popular in Africa, serves as an example. Contrary to popular
belief, developing nations may lead developed nations in mobile banking (Govindarajan,
2012).

To reduce poverty, it is essential to increase access to financial services like savings,

deposits, insurance, and remittances. Savings can assist low-income people invest in
productive assets like livestock, loans can help businesses grow, and insurance can
provide a family with income in the event that the primary earner becomes ill. But in
many developing nations, 90% of the population lacks access to a bank account or other
fundamental financial services. Since their transactions tend to be minimal and many of
them reside in isolated places outside the reach of bank branch networks, the formal
financial sector frequently does not view the poor as potential customers. The availability
of informal banking services including microloans and village savings and loan societies
is still restricted (Andrew, 2009). Banks must find innovative methods to serve the poor
profitably if they are to see them as potential clients. Often, it is too expensive to extend
branch networks, but the creation of suitable technologies may offer a solution. One
strategy with a lot of potential for reaching the poor is offering financial products via
mobile phones: Mobile phones are already available to a large number of the poor. Mobile
networks' low-cost ability to reach rural places is a benefit of mobile phones. Mobile
phone providers frequently enjoy better familiarity and trust among the poor than
traditional banking institutions do. Additionally, it is simple to modify a mobile device to
conduct financial transactions (Andrew, 2009).

India has a sizable unbanked population as a result of accessibility and cost issues. With
840 million or more mobile subscribers, mobile banking can offer a quick, affordable,
11
simple, comfortable, and secure avenue for customers to conduct banking transactions
throughout India. While bank customers can access a variety of services through their
mobile banking applications, it was necessary to link the biggest banks in order to provide
customers with a real-time, round-the-clock remittance solution. This need is met by the
Inter-Bank Mobile Payment Service (IMPS), an original payment method from NPCI
(Govindarajan, 2012). Access to banking services in rural areas is virtually nonexistent
in developing countries like India. However, the power to provide people with banking
services may be channeled through mobile banking, making financial inclusion a reality.
One method of offering banking services via mobile devices is mobile banking,
sometimes known as mobile money. Mobile banking also makes it simpler to overcome
obstacles throughout the challenging circumstances we have faced. For instance, 8 out of
10 Indians now depend on mobile banking services as a result of the pandemic. People
can be protected against ambiguous times and difficulties even in the future by using
digital technology (Finezza, 2022).

According to Jay Rosengard (Rosengard, 2016), adjunct lecturer in public policy at the
Harvard Kennedy School, gaining access to formal financial services is known as
financial inclusion and is a crucial component of equitable economic growth. Financial
inclusion enhances the standard of living for individual families and promotes regional
and global economic growth, according to research, by reducing transaction costs and
assisting in the distribution of risk and capital across the economy. For women and other
oppressed groups who have historically been excluded from the formal economy and had
less control over their own funds, financial inclusion can be especially effective. With
regard to financial inclusion, Kenya has surpassed other nations because to this growth.
The percentage of people in Kenya who have access to a financial account is more than
twice the average for sub-Saharan African countries and around treble the average for
low-income countries overall.

Kenya rose to the top of the mobile money globe. More adult residents in Kenya have cell
phone subscriptions than there are, and more than 80% of those who have a cell phone
also use mobile money. The popularity of mobile money in Kenya is mostly due to three
factors. Kenya's regulators first facilitated the growth of mobile money. Particularly the
Central Bank played a progressive role, ensuring the market with its monitoring while
allowing "regulation to follow innovation." Second, Safaricom's strategy—the operator
that is everywhere—was crucial. The corporation already held a more than 50% market
share in 2007. Its dominant position and widespread presence helped it grow. Third,
Safaricom's management recognized that human management, not technology, was more
important which ultimately what made M-PESA successful (Fengler, 2012).

Mobile banking is not the first new technology to enable nations advance more swiftly
and skip over some developmental phases. In the 2000s, cell phones had this effect in
sub-Saharan Africa. Countries were able to skip the landline telephone era and quickly
provide modern communication to their citizens as mobile phone ownership soared.
Kenya presently has a cell phone ownership rate of 82%, which is almost identical to the
12
US average of 89% (Brazzel, 2017).

4.1.3 Business Model of MFS

Numerous mobile banking concepts are now being developed. However, the business
model will be reliant on banking officials, or retail or postal institutions that execute
banking transactions for of telco or banks, if mobile banking is being utilized to attract
low-income populations in typically remote locations. The bank representative will be in
charge of customer care, service quality, and cash management, making them a critical
part of the mobile banking business model. Many carriers will cooperate with their
regional resellers of airtime. However, banks use bakeries, pharmacies, etc. in Colombia,
Brazil, Peru, and other markets. The main difference between these models is who will
develop the relationship with the end consumer (account opening, deposit taking, lending,
etc.), the bank or the non-bank/telecommunication company (Andrew, 2009).

Banks are already making investments in mobile technology and security, creating apps
for smartphones, introducing new capabilities like remote check deposit, and training
customers. As a result, customers have adopted mobile banking far more quickly than
they did online banking more than ten years ago. Most banks think that using mobile
technology will lower transaction costs while also boosting client engagement and
retention. This is comparable to the advantages that online banking was supposed to
provide years ago. A Harvard study, however, reveals that while internet banking
increased customer retention and decreased cost per transaction, it also caused an increase
in the total volume of online and offline transactions, which raised the overall transaction
cost. (Gupta, 2013).

David Porteous (Porteous, 2006) differentiates amongst additive and transformational

mobile banking models in a paper. The aforementioned specifically reaches out to banked
groups, feasibly "morphing" the economic growth of a country, whereas the latter
purposefully approaches to unbanked groups, presenting the mobile platform as an
alternative option to the former's target audience of already-banked customers. The latter
is more significant in developing nations because it is frequently promoted as a tool for
promoting financial inclusion while also eliminating the need to open bank branches in
outlying regions. The call for m-banking to advance quickly is typically justified by
success claims (mostly measured in terms of the number of users) from experiences in
other nations, particularly the Philippines, South Africa, and Kenya, whereby the bank-
based and non-bank based m-banking models are in operation since 2001, 2004 and 2007,
respectively.

Using electronic communication technology, the conventional banking model can be

made to operate better without changing its goals or functions, which will greatly increase
the efficiency, accuracy, and convenience of financial services for consumers. Mobile
banking is the best banking system because it is so widely used. The development of
13
wireless technology helped humanity by giving them an ideal financial system. Even if
we were unable to put the ideal engine, ideal technology, and ideal teaching system into
effect, we have come extremely close to achieving the ideal banking model by increasing
the use mobile banking extensively (Aithal, 2016).

4.1.4 Pros and Cons of MFS.

The practice of doing financial-related tasks using a mobile device, such as a smartphone
or tablet, is known as mobile banking. A mobile device can be used to conduct mobile
banking through a call, text, website, or app. Mobile banking has both pros and cons,
some of which have been noted here.

Pros.

It does not need an internet connection because it makes use of telecom carriers' mobile
connectivity (Chandran, 2014).

Mobile banking allows users to carry out a number of financial tasks conveniently and
safely from their phone. It can be very helpful to be able to access bank accounts, make
payments, and even keep track of assets from anywhere. Avoid lines by conducting your
banking at a time and location that work for you (Dalha, 2014).

It is easier to locate ATMs, deposit checks, pay bills, examine previous transactions,
check your account balance, manage investments, and more (Chandran, 2014).

For the majority of mobile phone owners in rural locations, mobile banking offers
24/7/365 accessibility to financial services in a simple, convenient, and ideal manner. The
best benefit of M-banking is that customers can access their accounts whenever and from
wherever they want using a mobile device (Shalini, 2021).

Even more secure than online/internet banking, according to reports, is mobile banking.
E-banking transactions can be secured using a private key kept on the SIM card. To
effectively protect private financial and purchasing information, a mobile phone can be
converted into a wireless wallet (Choudhary, 2022).

Cons.

Users of mobile banking run the danger of being the target of phishing emails and fraud.
The unencrypted servers of mobile phone providers pose the biggest security risk in
mobile banking. A skilled hacker will be able to readily get details about a user's account
or debit and credit cards. Additionally, messages from banks are not encrypted. This
implies that intercepting the information as it is transmitted through the mobile operator
won't be a problem (Ihor, 2021).

14
Losing the mobile phone frequently results in hackers gaining access to your mobile
banking PIN and other private data (Chandran, 2014).

Older mobile phone and device versions are less suitable for mobile banking than
contemporary mobile devices like smartphones and tablets (Dalha, 2014).

Banks usually place a cap on the volume of transactions; the bank may even outright
forbid any transactions that it deems to be risky. The bank runs a huge risk while
managing consumer deposits and credit accounts remotely. Both the total amount of
transactions per day and the number of transactions per day are subject to restrictions
(Ihor, 2021).

Mobile banking users may accrue hefty fees from their banks over time. Charges for using
mobile banking are typically expensive, especially for frequent users (Prosper, 2022).

4.1.5 Fundamentals to the success of MFS.

Mobile money services now have more opportunities to succeed thanks to the evolution
of the mobile phone markets. Regular improvements in the mobile channel have raised
awareness among businesses and financial institutions, particularly in emerging nations.
who now recognize that a growing percentage of their online presence may be spent on
mobile. Here are a few factors that could affect how mobile money services develop in
the future.

Simplicity of Use: People can use mobile money to purchase goods and services; they
can send money practically anyplace, even if they are far from a bank. The electronic
payment device is now the mobile device. Its main benefit is its mobility. It makes it
possible to make payments at anytime and anywhere. Customers can pay their bills and
make purchases whenever they want thanks to telephone and internet banking advantages
(Choudhary, 2022).

Unbanked and Underbanked: The requirements of the unbanked, underbanked, and

unhappy banked can be greatly improved by embracing mobile money services. allowing
individuals to use mobile devices to make payments and send money to businesses,
friends, and family. decreasing the need for long bank lines and integrating them into the
modern economy (Gupta, 2013).

Ease of Savings: Using a mobile phone to store money and having access to it whenever
you need it is one of the key successes of mobile money services. This also lessens the
need for actual cash, putting up a barrier against theft (Dalha, 2014).

Remittances: Mobile money has the ability to meet customer needs and expectations to
transmit funds at any moment throughout the day or week, regardless of the amount, given
that so many financially excluded individuals transfer domestic and international
remittances in cash and numerous people use mobile phones in developed and emerging
15
markets. The MFS should support transactions from one customer to another customer
(c2c), from a business to a customer (b2c), or between businesses (b2b) (Mandal, 2019).

The mobile phone era: Virtually every area of consumer behavior is altering as a result of
the adoption of mobile technologies. Mobile money providers now have an
unprecedented chance to forge connections with both potential and current consumers
across a variety of mobile platforms (Dalha, 2014).

Enhances Economic Growth: Due to the portability of mobile devices and the widespread
availability of mobile network services compared to traditional banks, the availability of
MFS in various strategic areas is essential for future acceptance and widespread use of
such services, thereby enhancing both microeconomic growth and macroeconomic
development. It enables businesses to cut costs, access credit for investments, and connect
with customers who were previously unreached by financial services (UNDP, 2022).

Network fluctuations, the impact of losing a mobile device, unauthorized use, and the
possibility of improper transfers are issues that the service providers need to face head-
on in order to maintain standards and guarantee efficient and effective use of the services
over the long haul. Due to the low network quality and remote locations of these
institutions, mobile money's full potential benefits cannot be realized (Asfaw, 2015).

4.1.6 Various types of Mobile Banking.

The atmosphere is become more fully digitalized thanks to mobile banking. It reduces
documentation and cuts down on waiting time that would otherwise be lost in lengthy
lines. According to Renju Chandran (Chandran, 2014) banks offer their customers mobile
banking services in the many ways outlined here:

• Over mobile applications, mobile banking: One must use the internet to download
the software or application from your bank or online store to your mobile device.
This functions with GSM and CDMA mobile devices running iOS and Android.
(For smartphone; bKash by Brac Bank and Rocket by Dutch Bangla Bank, etc.)

• SMS-based mobile banking (also known as SMS banking): It is by far the most
widely used type of mobile banking. You can receive your account’s details by
SMS.

• Unstructured Supplementary Service Data through mobile banking (USSD): In

this case, one simply need to call the bank's support number to get information on
your account. The USSD platform can be used on any phone, not just smartphones
or expensive models.

16
4.1.7 Mobile Financial Services in Bangladesh.

Following a protracted evaluation and ad hoc permissions on MFS, Bangladesh's central

bank issued regulatory standards for MFS on September 22, 2011, titled "Guidelines on
Mobile Financial Services (MFS) for Banks." It was again altered in December of that
year (Sultana, 2014). Later in 2018, the Bangladesh Bank issued the "Bangladesh Mobile
Financial Services (MFS) Regulations, 2018" regulations. The new laws went into force
immediately, replacing the previous "Guidelines on Mobile Financial Services for Banks"
(Payment System Department, Bangladesh Bank, 2018)

4.1.8 bKash, The Major MFS Provider in Bangladesh

BRAC Bank founded bKash Limited, a private company limited by shares constituted
under the Companies Act, 1994 on March 1, 2010. bKash was founded in Bangladesh to
provide mobile financial services. Bangladesh Bank has granted the bank a license to
provide mobile financial services through bKash. BRAC Bank presently owns 51 percent
of the company's stock. In addition, Bill & Melinda Gates Foundation (B&M) in 2014,
Alipay Singapore E-Commerce Private Limited ("Alipay") in 2018, and SoftBank in 2021
all invested in bKash in the form of convertible preference shares with the permission of
all current shareholders. B&M holds 22,525 shares, Alipay 55,433 shares, and SoftBank
85,146 shares of the total 163,104 convertible preference shares as of December 31, 2021.
Preference shareholders do not have voting rights, but they do have the same economic
rights as equity shareholders in terms of the corporation (Brac Bank, 2021, p. 340).
With over 55 million verified accounts, bKash has a network of over 250,000 agents in
Bangladesh's urban and rural locations. In 2017, bKash was placed 23rd among the top
50 firms in Fortune Magazine's annual "Change the World in 2017" list of the top 50
corporations making social impacts. In a customer study conducted by the Bangladesh
Brand Forum, bKash was named the Best Brand of Bangladesh for the second consecutive
year (2019 and 2020). For the fourth year in a row, bKash has been named the No. 1
Mobile Financial Services Brand in the MFS category (bKash, 2022).

4.1.9 Legal Compliance of bKash.

Compliance fundamentally refers to following the rules established by the Bangladeshi
Central Bank. The goal of bKash is to always maintain the highest level of compliance,
guided by the correct application of all circulars, instructions, policy letters, and rules
issued by Bangladesh Bank and the Bangladesh Financial Intelligence Unit (BFIU). With
a view to assuring customer pleasure and the security of their funds while investigating
new channels for financial inclusion, bKash Limited is closely collaborating with the
regulator as well as other external stakeholders on pertinent issues. In response to Circular
20 issued by the BFIU, the independent AML&CFT Department of bKash Limited was
established in 2017. The overarching goal of this circular is to construct a solid culture of

17
AML&CFT compliance that extends beyond internal stakeholders and includes external
stakeholders under the protection of a common compliance architecture. This culture
should be strong at all levels and start at the bottom. In order to achieve a global standard
for the governance of AML&CFT in its operations, bKash is working nonstop (bKash,
2022).
bKash is collaborating with a system of support to make it easier for Law Enforcement
Agencies (LEA) to combat misuses of Mobile Financial Services (MFS). To prevent
financial crimes from misusing the MFS platform, fraud prevention, information support,
and dispute resolution are being actively pursued. Additionally, bKash frequently
arranges interactive training sessions for LEA and bKash personnel at all levels. The
highest level of regulatory compliance is something that bKash is still devoted to
cultivating (bKash, 2022).

4.1.10 Opening a bKash account.

Nowadays, opening a bKash account is extremely easy. It is possible to create an account
with connections from Airtel, Banglalink, Teletalk, Grameenphone, and Robi. To create
a bKash account using the mobile phone, the following instructions need to be followed
(bKash, 2022):

First get your mobile phone, both the original and copy of the National ID and one
passport-sized photo. Then with the following documents you can go to a bKash agent or
customer care. They can help you open a bKash account. Then you fill up the form, give
your digital fingerprint and signature and submit the documents.

The cell number will change to the bKash Account number once these steps have been
completed. The new bKash Account will initially allow to access the Cash In, Mobile
Recharge, and Receive Money services. However, it won't allow to Cash Out, Mobile
Recharge, Make Payments, or use any of the other bKash services until the KYC Form
verification is finished which takes about 3-5 business days. Once the Account is
completely operational, dial *247# to use the bKash services whenever it’s necessary,
day or night, seven days a week. When opening an account at a Customer Care Center or
Customer Care, customers will be able to take advantage of all the services. The PIN
number should always be kept secret for security measures and avoid theft (bKash, 2022).

4.1.11 bKash’s contribution to savings through MFS

Saving money has long been a popular practice in Bangladesh. The lack of substantial
social welfare benefits makes it worse. Employees in the public sector were always
relieved to receive pension benefits. However, individuals employed in the private sector,
particularly the less privileged group like farmers, general laborers, etc., spend their days
worrying about how they will support themselves in their later years. There are some
government-run programs for the disadvantaged, but they can be complicated and may
not have had the desired impact. Furthermore, a significant portion of the population was
18
obliged to abandon any such savings plan due to illiteracy and limited access to banking
services. However, as the mobile financial service (MFS) providers launched various
savings programmers in partnership with the scheduled banks, things started to look up
for these folks. The appeal of this savings potential is that MFS providers are accessible
at all times and locations. The infrastructure, workforce, and operational schedules of
banks are constrained. Looking back, MFS has grown in significance within the nation's
banking sector over the past ten years. During the previous fiscal year, there had been a
more than 30% rise in transactions using MFS, with over 178 million mobile accounts
registered. With consistently updated programs that make financial transactions more
convenient, MFS is not only the digital financial facility with the quickest growth rate but
also one that is well-respected (Rahgir, 2022).

In recent years, MFS front-runner bKash has taken the lead in promoting savings
opportunities. Beginning with the first such program in partnership with IDLC last year,
bKash has been working with several banks to expand its reach in order to facilitate
savings by as many people as possible, especially for low savers and those who lack
access to bank-sponsored or government-sponsored programs. The newest development
on the card is the debut of bKash and City Bank's Shariah-based deposit program. The
service, known as City Islamic DPS, is accessible to users through the bKash app and
account. One can sign up for term deposits with installments ranging from 500 to 3000
Tk for various tenures (Rahgir, 2022).

Savings are beneficial for society as much as for individuals. Additionally, it significantly
aids in national growth. Reports indicate that Bangladesh's savings rate is significantly
lower than those of its neighbors. However, the scene is certainly set for a shift for the
better with the energetically innovative endeavors like those of bKash. One may have
wanted to save earlier, but the means and opportunity were not available. By eliminating
the need for any physical branches or the anxiety associated with making a small deposit
at a physical branch, enabling savings through technology democratizes access to such a
fundamental financial necessity. The money that has to be saved must be used (Rahgir,
2022). Perhaps the coordinated efforts of MFS providers and banking organizations will
reshape the nation's financial system and promote sustainable growth.

4.1.12 CSR of bKash.

The Daily Star and CSR Window Bangladesh have given bKash the "Best CSR in
Education" award in recognition of its distinctive commitment to education as part of
corporate social responsibility (CSR). The group was recognized for hosting scientific
fairs and book reading events for youngsters at schools around the nation. bKash received
this esteemed accreditation for the first time as an MFS organization.

Since 2014, bKash has participated in Bishwo Shahitto Kendro's book reading initiative
as a good corporate citizen of the nation. Through this partnership, bKash has given
2,63,700 books to roughly 2,900 educational institutions, benefiting 2.7 million readers
nationwide. Additionally, bKash has updated or replaced outdated books in school
libraries and added new collections. Students have been able to learn a wide range of
19
information outside of their curriculum thanks to this widespread initiative. Additionally,
to encourage kids to pursue science, bKash has been hosting national scientific festivals
since 2019 in partnership with Biggan Chinta, the most read science magazine in Bangla.
The goal of holding this festival is to make students aware of the value of doing science
in their daily lives and to create a country that values science. A quiz competition, speech
by eminent national educators, a robot exhibition, a magic show, an introduction to
various scientific topics, cultural performances, and prize-giving sessions are all planned
for this festival, which is held in front of teachers, parents, and dignitaries. Earlier in 2022,
bKash collaborated with "Proyash-Jashore" to support 118 special needs students'
education (bKash, 2022).

To end the discussion, we deduce that by analyzing the macro level data of mobile
banking we could identify various factors assisting in the development of the mobile
banking services and the advantages enjoyed and the challenges faced by the industry.
Analyzing the micro level data, we could identify how bKash is actively participating in
the development of the mobile banking industry in Bangladesh as it is the role expected
to be played by them for being the market leader.

20
 Chapter 5. Conclusion.
One of Bangladesh's most pressing problems recently has been financial inclusion. The
worry appears to have diminished with the introduction of bKash as they are providing
more options for the disadvantaged group to access financial services through mobile
banking. The introduction of new financial services with the ability to raise financial
literacy among the population would guarantee the establishment of a viable ecosystem
for Bangladesh and may also boost bKash's contribution to Bangladesh's overall financial
inclusion in the future. The study showed that the revenue of bKash and average daily
transactions is highly correlated even though the revenue has a strong relation with the
number of mobile banking customers and number of mobile phone subscribers.
Furthermore, the study revealed certain opportunities and challenges as mentioned below:

Opportunities.

Substantial marketplace: Bangladesh has a sizable market for mobile banking. The
service provider can improve their agents' access to education to better prepare them for
this field. Additionally, they can train them and produce work prospects. By doing this,
they can expand the space for innovation in this industry and provide a venue for the
launch of new services and products. Now that more individuals are using mobile banking,
additional opportunities are opening up, which can be a tremendous advantage for the
citizens of our nation. Additionally, providing them with new goods and services can aid
in their development.

Innovative products and services: There are more opportunities for innovation in this field,
and it will give consumers additional service and product options. It is already in
widespread use in Bangladesh. For instance, merchant banking, shopping, remittance,
peer-to-peer (P2P), buying airline tickets, paying bills, etc. There is possibility for it as
more and more places are being constructed to improve the neighborhood.

Collaboration opportunities: As the market expands, more chances will arise for
partnerships between various MFS providers. People will have more possibilities for
using it, which could lead to a significant increase. As a result, there will be more chances
for clients to integrate with those MFS providers and for businesses to grow. There will
be additional opportunities for people to engage in other types of services, expanding the
market. More MFS providers will then be motivated to offer such kinds of services. The
market will have a competitive advantage, which will ultimately benefit consumers.

Reduced cost: People with lower incomes are not interested in mobile banking because
they believe it to be more expensive than traditional banking. However, if awareness is
raised and service costs are reduced associated with mobile banking and this industry,
people may become involved with this type of banking.

Challenges.

Societal felony and scams: Some social crimes and fraud instances have been reported
21
since the advent of online or mobile banking. People are moving illicit funds to foreign
nations through mobile banking, which ultimately leads to money laundering. On the
other side, hackers are able to break through security measures and steal customers' PINs.
Because of this, users are losing control over their accounts and having their money
hacked. Recent cyberattacks caused Bangladesh Bank to lose a sizable sum of money.
Criminals use mobile banking to pay arms traffickers and to commit social crimes like
human trafficking.

No sufficient rules and regulations: Despite the laws and regulations that the Bangladesh
Bank has established, there are still gaps in them. These gaps are being utilized by
fraudsters. It cannot be properly tracked because there is no other appropriately qualified
entity to look into it.

Market penetration: There should be fair playing conditions for market involvement.
Unfortunately, there are several obstacles and risks that a new entrant to the market must
overcome. They lack interest because of this. Equal opportunity is necessary, though, so
that newcomers can enter the area and present their services and innovations.

Difficulties in transfer: Moving money from one carrier to another MFS provider account
is still problematic (Rocket to Brac bank). It must drop to enable clients to transfer funds
between accounts.

Correlation between BTRC and Bangladesh bank: To administer this sector more
efficiently and in an organized way, BTRC and Bangladesh bank should work in
collaboration and under correct leadership.

Technological advancement: To reduce the number of fraud instances, this industry needs
high-tech software. Quality personnel were also required to run that software. A global
problem is cyber security. Bangladesh must thus band up with other nations to address
the issue.

22
 Chapter 6. Recommendations.
MFS has a very bright future in Bangladesh. Bangladesh can develop new technologies,
like a mobile phone, in the future to expand and sustain this industry, similar to the USA.
The development of technology has allowed for new ideas to be generated by people. In
this aspect, a country's economy will expand as more and more people become involved
in it. A whole new notion and plan for the people will develop through innovation and
services. The cost of living will decrease, as will expenses like travel. Remittances allow
for the emergence of individuals, which boosts our economy. It may involve
revolutionary transformation in the medical field. Through it, farmers may receive their
earnings and textile workers can receive their salaries and payments. Bangladesh's
eventual economic situation will be brighter.

The advancement of technology is critical, yet criminality is a worry. Therefore, the issue
can be changed by more creative people in this field. For that issue, the creation of digital
tools, software, and trackers is required. Cybercrime Unit, Bangladesh Bank, BTRC, and
Bangladesh Police can all be extremely helpful in this area.

23
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https://www.worldbank.org/en/topic/financialinclusion/overview#1

Toplin, J. (2018). Mobile banking is more important than ever. USA: Insider. Retrieved
1 11, 2023, from https://www.businessinsider.com/mobile-banking-is-more-
important-than-ever-2018-1

UNDESA and MCIT. (2012). Evidence-based e-government policies for advancing

governmental service delivery and accountability in support of the Sustainable
Development Goals: A Concept Note Paper of the Financial Inclusion in
Bangladesh . Dhaka: Goverment of Bangladesh and United Nations Department
of Economic and Social Affairs .

UNDP. (2022, 10 27). UNDP. Retrieved 1 12, 2023, from UNDP.org:

https://www.undp.org/news/new-research-shows-mobile-finance-can-increase-
national-gdp

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 Appendices
Appendix 1. Scheduled and Non-Scheduled Banks of Bangladesh in 2022

No Organization Web Link

1 AB Bank Limited http://www.abbl.com
2 Agrani Bank Limited http://www.agranibank.org
3 Al-Arafah Islami Bank Limited http://www.al-arafahbank.com/
4 Bangladesh Commerce Bank Limited http://bcblbd.com/
5 Bangladesh Development Bank Limited http://www.bdbl.com.bd
6 Bangladesh Krishi Bank http://www.krishibank.org.bd
7 Bank Al-Falah Limited http://www.bankalfalah.com
8 Bank Asia Limited http://www.bankasia-bd.com
9 BASIC Bank Limited http://www.basicbanklimited.com
10 Bengal Commercial Bank Limited https://bgcb.com.bd
11 BRAC Bank Limited http://www.bracbank.com
12 Citibank N.A http://www.citi.com/domain/index.htm
13 Citizens Bank PLC
14 Commercial Bank of Ceylon Limited http://www.combank.net/bdweb/
15 Community Bank Bangladesh Limited http://www.communitybankbd.com
16 Dhaka Bank Limited http://dhakabankltd.com
17 Dutch-Bangla Bank Limited http://www.dutchbanglabank.com
18 Eastern Bank Limited http://www.ebl.com.bd
19 EXIM Bank Limited http://www.eximbankbd.com
20 First Security Islami Bank Limited https://www.fsiblbd.com
21 Global Islami Bank Limited http://www.globalislamibankbd.com
22 Habib Bank Ltd. http://globalhbl.com/Bangladesh/
23 ICB Islamic Bank Ltd. http://www.icbislamic-bd.com/
24 IFIC Bank Limited http://www.ificbank.com.bd/
25 Islami Bank Bangladesh Ltd http://www.islamibankbd.com
26 Jamuna Bank Ltd http://www.jamunabankbd.com
27 Janata Bank Limited http://www.janatabank-bd.com
28 Meghna Bank Limited http://www.meghnabank.com.bd
29 Mercantile Bank Limited http://www.mblbd.com
30 Midland Bank Limited http://www.midlandbankbd.net/
31 Modhumoti Bank Limited http://modhumotibankltd.com/
32 Mutual Trust Bank Limited http://www.mutualtrustbank.com
33 National Bank Limited http://www.nblbd.com
34 National Bank of Pakistan http://www.nbp.com.pk
35 National Credit & Commerce Bank Ltd http://www.nccbank.com.bd
36 NRB Bank Limited http://www.nrbbankbd.com
37 NRB Commercial Bank Limited http://www.nrbcommercialbank.com/
38 One Bank Limited http://www.onebankbd.com
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 39 Padma Bank Limited http://www.padmabankbd.com/
40 Premier Bank Limited http://www.premierbankltd.com
41 Prime Bank Ltd https://www.primebank.com.bd/
42 Probashi Kollyan Bank http://www.pkb.gov.bd/
43 Pubali Bank Limited http://www.pubalibangla.com
44 Rajshahi Krishi Unnayan Bank http://www.rakub.org.bd
45 Rupali Bank Limited https://rupalibank.org/en/
46 Shahjalal Islami Bank Limited http://www.sjiblbd.com/
47 Shimanto Bank Limited https://www.shimantobank.com/
48 Social Islami Bank Ltd. http://www.siblbd.com
49 Sonali Bank Limited http://www.sonalibank.com.bd
50 South Bangla Agriculture & Commerce Bank http://www.sbacbank.com/
Limited
51 Southeast Bank Limited https://www.southeastbank.com.bd
52 Standard Bank Limited http://www.standardbankbd.com
53 Standard Chartered Bank http://www.standardchartered.com/bd
54 State Bank of India https://bd.statebank/
55 The City Bank Ltd. http://www.thecitybank.com
56 The Hong Kong and Shanghai Banking Corporation. http://www.hsbc.com.bd
Ltd.
57 Trust Bank Limited http://www.trustbank.com.bd
58 Union Bank Limited http://www.unionbank.com.bd/
59 United Commercial Bank Limited http://www.ucb.com.bd/
60 Uttara Bank Limited http://www.uttarabank-bd.com
61 Woori Bank http://www.wooribank.com
Source: Bank of Bangladesh, Accessed on 19/04/2022
https://www.bb.org.bd/en/index.php/links/links/9

Non-Scheduled Banks of Bangladesh

No Organization
1. Ansar VDP Unnayan Bank

2. Karmashangosthan Bank

3. Grameen Bank

4. Jubilee Bank

5. Palli Sanchay Bank

Source: Bank of Bangladesh, Accessed on 19/04/2022

https://www.bb.org.bd/en/index.php/financialactivity/bankfi

30
Appendix 2. Mobile Finance Service Provider in 2022

No. Name of the MFS service Name of the organization

1 Rocket Dutch Bangla Bank
2 bKash bKash Ltd
3 MYCash Mercantile Bank Ltd
4 Islami Bank mCash Islami Bank Bangladesh Ltd
5 Trust Axiata Pay (TAP) Trust Axiata Digital Ltd
6 First Pay SureCash First Security Islami Bank Ltd
7 UPAY UCB Fintech Company Ltd
8 OK Banking One Bank Ltd
9 Rupali Bank SureCash Rupali Bank Ltd
10 TeleCash Southeast Bank Ltd
11 Islamic Wallet Al-Arafah Islami Bank Ltd
12 Spot Cash Standard Bank Ltd
13 Meghna Bank Tap n Pay Meghna Bank Ltd

Source: Bank of Bangladesh, Accessed on 19/04/22

https://www.bb.org.bd/fnansys/paymentsys/mfs_provider.pdf

Appendix 3. Data Set

No. Year Revenue of No. of avg Mobile Mobile

bKash daily trans banking phone subs
customers
1 2018 21791.3 5309919 68 147
2 2019 24160.8 6141542 80 158
3 2020 26245.0 7786236 99 166
4 2021 31962.8 9529947 111 172

Data compiled by author’s own calculations based on 48 months of raw data.

Source: Bangladesh Bank, Bangladesh Telecommunication Regulatory Commission

(BTRC) and Brac Bank, Accessed on 19/04/2022.

For more information, please see:

https://www.bb.org.bd/en/index.php/financialactivity/mfsdata

http://www.btrc.gov.bd/site/page/0ae188ae-146e-465c-8ed8-d76b7947b5dd/-

https://www.bracbank.com/financialstatement/BRAC_Annual_Report_2021.pdf

31
Data Analysis with the rejected values.

X3->X2->X1->Y
Model 1 (X1-Y)

Regression Statistics
Multiple R 0.982743
R Square 0.965783
Adjusted R
Square 0.948674
Standard Error 984.9518
Observations 4

ANOVA
Significance
df SS MS F F
Regression 1 54764169 54764169 56.45033 0.017257
Residual 2 1940260 970130.1
Total 3 56704429

Y=a+b1x1+b2X2+B3x3+ E

Standard Lower Upper Lower Upper

Coefficients Error t Stat P-value 95% 95% 95.0% 95.0%
Intercept -200.907 33.38356 -6.01815 0.026517 -344.545 -57.2694 -344.545 -57.26
X
Variable
1 1.809114 0.207646 8.712504 0.012919 0.915687 2.702541 0.915687 2.7025

Y=a+b1X1+ E
Y=-200.907+1.809114*(number of average daily trans)
Model 2 (X2-Y)

Regression Statistics
Multiple R 0.951557
R Square 0.90546
Adjusted R
Square 0.85819
Standard Error 1637.198
32
Observations 4

ANOVA
Significance
df SS MS F F
Regression 1 51343597 51343597 19.15508 0.048443
Residual 2 5360832 2680416
Total 3 56704429

Model 3 (X3-Y)

Regression Statistics
Multiple R 0.936558
R Square 0.87714
Adjusted R
Square 0.815711
Standard Error 1866.371
Observations 4

ANOVA
Significance
df SS MS F F
Regression 1 49737749 49737749 14.27875 0.063442
Residual 2 6966681 3483340
Total 3 56704429

Model 4 (X1X2-Y)

Regression Statistics
Multiple R 0.992263
R Square 0.984586
Adjusted R
Square 0.953757
Standard Error 934.9109
Observations 4

ANOVA
Significance
df SS MS F F
Regression 2 55830371 27915185 31.93744 0.124154
Residual 1 874058.4 874058.4
Total 3 56704429

33
Model 5 (X2X3-Y)

Regression Statistics
Multiple R 0.951706
R Square 0.905745
Adjusted R
Square 0.717236
Standard Error 2311.853
Observations 4

ANOVA
Significance
df SS MS F F
Regression 2 51359766 25679883 4.804771 0.307009
Residual 1 5344663 5344663
Total 3 56704429

Model 6 (X1X3-Y)

Regression Statistics
Multiple R 0.936558
R Square 0.87714
Adjusted R
Square 0.815711
Standard Error 1866.371
Observations 4

ANOVA
Significance
df SS MS F F
Regression 1 49737749 49737749 14.27875 0.063442
Residual 2 6966681 3483340
Total 3 56704429

Model 7 (X1X2X3-Y)

Regression Statistics
Multiple R 1
R Square 1
Adjusted R
Square 65535
Standard Error 0
Observations 4

34
 ANOVA
Significance
df SS MS F F
Regression 3 56704429 18901476 #NUM! #NUM!
Residual 0 0 65535
Total 3 56704429

Model 8 (X2-X1)

Regression Statistics
Multiple R 0.988951
R Square 0.978024
Adjusted R
Square 0.967036
Standard Error 339097.3
Observations 4

ANOVA
Significance
df SS MS F F
Regression 1 1.02E+13 1.02E+13 89.00858 0.011049
Residual 2 2.3E+11 1.15E+11
Total 3 1.05E+13

Standard Lower Upper Lower Upper

Coefficients Error t Stat P-value 95% 95% 95.0% 95.0%
- -
Intercept -1202448 905767.6 -1.32755 0.315587 5099652 2694755 5099652 2694755
X
Variable
1 93833.66 9945.869 9.434436 0.011049 51040.04 136627.3 51040.04 136627.3

Y=-1202448+93833.6*number of mobile banking customers

Model 9 (X3-X2)

Regression Statistics
Multiple R 0.987081
R Square 0.974329
Adjusted R
Square 0.961493
35
 Standard Error 3.862703
Observations 4

ANOVA
Significance
df SS MS F F
Regression 1 1132.58 1132.58 75.90773 0.012919
Residual 2 29.84096 14.92048
Total 3 1162.421

Standard Lower Upper Lower Upper

Coefficients Error t Stat P-value 95% 95% 95.0% 95.0%
Intercept -200.907 33.38356 -6.01815 0.026517 -344.545 -57.2694 -344.545 -57.2694
X
Variable
1 1.809114 0.207646 8.712504 0.012919 0.915687 2.702541 0.915687 2.702541

Y=-200.907+33.38356*number of mobile phone subscribers

36