1. C OMPETITION IN D IGITAL F INANCIAL S ERVICES IN B ANGLADESH Mohammad Naushad Ali Chowdhury Executive Director Bangladesh Bank

2. M OBILE USES AND MFS LANDSCAPE IN B ANGLADESH Bangladesh is one of the most populous and most densely populated countries in the world. Mobile penetration levels are relatively high, even in rural areas (something not seen in most other emerging markets). Mobile operators has immense scope to develop new revenue streams beyond core mobile connectivity – services that support basic human needs around agriculture, education, businesses and employment. The use of mobile in driving socio-economic improvement is on the rise. MFS growth for the last few years were phenomenal.

3. The country now has a relatively solid mobile consumer base, much of which still have immense potential for serving core life needs like mobile money and its ancillary and related services. Bangladesh Bank the mobile money regulator in the country sees the existing bank led model suitable for the country while being open to new investment in innovation and technology Mobile operators are demonstrating the potential for social VAS, while MFS provider are coming up with various VAS in the mobile money landscape. We expect this to continue to grow, while we also understand it will take time. There is still an opportunity for public and private investment in providing seed capital for the innovation that is not yet ‘market-led’, with a key role for government in facilitating this process. Although we have introduced simplified CDD for MFS account but all activities are under AML/CFT regulation of Bangladesh Bank. M OBILE USES AND MFS LANDSCAPE IN B ANGLADESH

4. B ANGLADESH D EMOGRAPHIC CHARACTERISTICS

5. F INANCIAL SYSTEM OF B ANGLADESH Schedul ed Banks 56 4 State owned Commercial Banks 4 Specialized Banks 39 Private commercial Banks 9 Foreign Banks 9400 Branches country wide ATMs network- 6035 Central Banks Non Bank Financial Institutions -33 4 Non Schedul ed Banks MFIs-697, MFIs branches- 18000

6. D IGITAL F INANCIAL S ERVICES INFRASTRUCTURE BB has built a robust technology infrastructure with various enablement's to support digital financial services: Online Credit & Supervisory reporting Electronic Fund transfer Bangladesh Automated clearing house National Payment Switch Real-time Gross Settlement systems BB has built a robust technology infrastructure with various enablement's to support digital financial services: Online Credit & Supervisory reporting Electronic Fund transfer Bangladesh Automated clearing house National Payment Switch Real-time Gross Settlement systems Bangladesh Bank in association with the NID authority further wants to connect NID with the digital banking and MFS system to introduce e-KYC. Following initiatives are underway : NID linked G2P payments Union Digital Centers Agent Banking; POS, rural branches, Rural Savings Bank Bangladesh Bank in association with the NID authority further wants to connect NID with the digital banking and MFS system to introduce e-KYC. Following initiatives are underway : NID linked G2P payments Union Digital Centers Agent Banking; POS, rural branches, Rural Savings Bank Digital Initiatives are in two fronts In the Banking through introduction of internet, SMS, ATMs, POS based transaction Through MFS by the mobile bank account /mobile wallet Digital Initiatives are in two fronts In the Banking through introduction of internet, SMS, ATMs, POS based transaction Through MFS by the mobile bank account /mobile wallet

7. MFS CURRENT STATUS Key MFS indicators Number of Agents (million) Number of Registered clients (million) Number of Transaction (million) Value of Transaction (million USD) Jun 20130.106.6717.6539.23 Dec 20130.18913.1831.36 852.62 Dec 20140.54125.274.471343.98 Jun 20150.53828.6596.161662.76 Sep 20150.54229.21106.431931.51 Digital Financial Services (DFS) in Bangladesh (As on October 2015) Banking End Number of POS28265 Number of ATMs6311 Number of bank branches9500 Agents (Banking)-148 MFS providers Licensed Providers28 Active Providers-20 ATMs-3905 Agents-547813 MFS transaction snapshot Average Daily Transaction (Value million USD)-55.73 Active Customers number (million)12.06 Average Daily Transactions (million Number)3.58

8. MFS MAGNITUDE IN B ANGLADESH

9. I SSUES AROUND COMPETITION IN DFS SPACE Investment USSD price Pricing Innovation for mass use Product development and value proposition OTC Market opening for non-bank entities

10. Thank you