With the use of technology, trade and commerce activities in the country are expanding fast and the number of financial organisations is swelling day by day. In order to the remarkable progress achieved in various sectors in the past several years, Bangladesh is being considered as an emerging economy in the world stage and that many countries, organisations and business groups are now expressing their interest in working with the country and its people.
There is no denying that financial transaction is an integral part of any economic or business dealings and the technology driven, safe and smooth transaction system is indispensable for sustained economic affairs, the area in which Bangladesh still sorely lags behind. This is more so by the fact that around 97 per cent of the business transactions are still made in cash, according to an international research organisation.
Aligned with the government’s vision of Digital Bangladesh 2021, some plausible progress has so far been made by digitising government offices and health services, automating a number of pubic organisations, setting up Digital Centres in rural and urban offices of local government towards achieving the goal in the stipulated time frame. Despite all this, the electronic payment is still in the nascent sage. This is because most of the business transactions are being carried out in cash. The transaction of the largest market of consumer product, Khatunganj of Chittagong is also cash dependent. Apart from the business transactions, the wages of the workers of almost all sectors including the labour-intensive readymade garment are being paid in dough. The provision of house rent amounting more than Tk 25,000 a month to be paid through a bank is often flouted in most cases. Besides lack of financial knowledge, the propensity to dodging transparency is supposed to be the prime reason for increasing reliant of cash dependent payment, say experts.
In its annual report, the Cash Alliance – a partnership of governments, companies, and international organisations aiming to accelerate the transition from cash to digital payments – has revealed that currently the business transactions are worth of $15,000 crore a year in the country.
Surprisingly, only 3 per cent of it is being done in electronic system. On the other hand, the yearly value of individual business dealings is $17,000 crore, 97.5 per cent of which is made in cash. According to the report, the number of annual transactions in the country is 440 crores and only 6 per cent of them are carried out in digital system by public institutions, business organisations and individuals together.
The above statistics speaks volumes of the overall situation prevailing in the financial sector. However, there is hardly any reason to deny that keeping pace with time trade and business of the country is extending and more and more people are engaging in financial proceedings contributing to the economy. Yet, it exposes dismal scenarios when it comes to the payments in digitised system. We know the readymade garment industry has been one of the main driving forces of the country’s economy. More than 3 million people are involved in the largest export earning sector of the country. And the payday can be an ordeal for the workers especially the women who comprise more than 80 percent workforce of the industry. Often, they must wait in long queues, carry wads of money through crowded streets, and compromise the safety, convenience, and privacy of having their pay deposited directly into an account.
Besides, factory owners invest plenty of money bringing in cash-load vehicles to distribute wage payments to workers. For example, guards must be hired to safeguard the process. Production time is lost when workers must stand in line for their pay. Another survey of the Cash Alliance on this shows every worker spends at least 18 minutes for taking his salary or allowance attributing to some 750 working hours being wasted a month in an average in every factory. On the other hand, administrative workers involved in accounting affairs too have to spend additional 13 minutes on an average at the same period for the purpose. As a result, 542 hours are being wasted every month in each factory. If the wage or allowance is doled out through electronic means, it will save time on one hand, and ramp up working efficacy on the other.
Let’s home in on one more report by the same organisation, in which it says 83 per cent of the financial transactions of the country are driven by various business organisations. And 90 per cent of these organisations distribute salaries to their employees in cash while only a handful of them do the same in digital means. The biggest place where the cash-driven business deals are conducted is Khatunganj of Chittagong.
The businessmen in the area are interested more in cash driven transactions than in other means such as banking. Poor literacy rate and tendency to evading tax among the business people in the area are the prominent reasons for not adopting electronic means of financial transactions, opine industry insiders.
According to the sector concerned, transparency in financial dealings can ensure digitisation, which is also one of the main goals of Digital Bangladesh. And the information of every transaction can be preserved through it. But the fact remains that the service is still not easy affordable though the situation is expected to improve in next few years. The reason behind this optimism is that a large chunk of the populous of the county is tech-savvy youth who can easily accept technology driven transaction services.
In the end, digital payment can undoubtedly revolutionise financial sector and expedite the target of reaching Digital Bangladesh vision provided that all stumbling block in the way of payment digitalising are removed. Issuing debit card against every account ought to be mandatory for all the bank and using debit and ATM cards more and more are to be encouraged. On top of these, the government should refrain from any plan of imposing excise and tax on account balance anew, and the bank authorities from charging unjustly for the service to boom in the digitised payments in the financial sector of the country.
The writer is an Associate Engineer, Thakral Information System Pvt Ltd. Email: email@example.com