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IFC, BFIU to promote secure banking, financial inclusion

Published : Tuesday, 26 October, 2021 at 12:00 AM  Count : 192
Business Correspondent

International Finance Corporation (IFC) has signed a cooperation agreement with Bangladesh Financial Intelligence Unit (BFIU) to promote a secure banking environment in the country and accelerate financial inclusion,  a Bangladesh Bank press release said Monday
It states that the BFIU plans to implement and scale up an Electronic Know Your Customer (eKYC) project in Bangladesh, where only half the adult population has access to a formal financial system.
Under the agreement, IFC and BFIU will work together to develop and adapt eKYC infrastructure,     which is a foundational regulatory arrangement for conducting customer due diligence during new client on boarding process for collecting and verifying customer data electronically.
It will verify new accounts at banks, non-bank financial institutions, mobile financial service providers, insurance companies, and capital market intermediaries.
An efficient digital on boarding infrastructure is one of the major building blocks for fast-tracking financial inclusion in Bangladesh. Under the current KYC protocol for opening new accounts, customers need to present their national identity (NID) cards in person and financial institutions (FI) must authenticate and keep a record manually photocopying and printing the NID.
The process is time-consuming, costly, and inconvenient for both clients and FIs. Moreover, in-person account opening has become more difficult amid the COVID19 pandemic and the development of eKYC will help in social distancing.
Once in place, the eKYC infrastructure will not only cut time and cost of client on boarding, but it will help reach more customers digitally, thus, reducing the number of unbanked people, particularly the underserved such as small business owners and women entrepreneurs.
The project will contribute to the financial inclusion agenda of the government as well as IFC's target of including an additional 30 million unbanked adults in the country by 2030.
BFIU, an independent government agency charged with investigating suspicious transactions and money laundering, is also the central agency for ensuring KYC/eKYC compliance. BFIU is expected to issue a comprehensive eKYC regulatory guideline for the financial sector by December 2024.
Along with establishing a regulatory infrastructure, the eKYC project will also deliver data analytics,   case studies, knowledge creation and dissemination and awareness building in the financial market. IFC estimates that 500,000 people will be covered by the e-KYC system by end of the project implementation period in 2025.
"Financial sector especially financial institutions are experiencing a drastic process of digitalization. This digital transformation enables easy access of customer, even from the remote location, into the financial services.







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