Bangladesh Bank yesterday issued guidelines specifying the sole ways in which public money deposited in the accounts operated by mobile financial service (MFS) and e-money service providers can be used.
The MFS providers' clients usually do not spend all their money immediately after those have been deposited in their accounts with the providers.
The unused funds of clients which are deposited at MFS providers' accounts are collectively large.
Such accounts are considered as trust cum and settlement accounts (TCSAs).
The TCSAs would act as custody accounts where the legal tender (currency in the form of printed note) is stored against the issuance of e-money by the MFS and e-money service providers.
The MFS and e-money service providers have to open the accounts with banks in Bangladesh.
E-money service providers are categorised as payment service providers (PSPs). The eWallets which people open with them would be linked with their respective bank accounts.
The eWallet can hold funds transferred from the bank accounts.
The central bank has imposed a set of restrictions on the use of these public funds deposited at the TCSAs.
The MFS providers, PSPs and other entities authorised to hold the TCSAs will not be allowed to take any loan against the public funds.
Banks cannot issue any deposit certificate and guarantee to the MFS providers and PSPs, which would have then facilitated them in taking loans or using the fund as collateral.
Funds deposited at the TCBAs cannot be used for day-to-day company operations.
However, a certain portion of the public funds of the TCSAs can be invested in approved government securities, fixed deposit receipt (FDR) or any other approved instruments with prior approval from the BB.
The instruments should be marked informing that those have been issued against the TCSAs.
In the event of such investment, the principal amount of the investment will always be credited back to the TCSAs upon maturity or sale.
Investment in the FDRs will have to take place in the same bank where the TCSAs are opened.
The MFS providers and PSPs will have to maintain separate operational account linked to the TCSAs for receiving interest.
The TCSAs will have to be used for collecting, disbursing, holding and settling the funds, fee realisation and investing the public money received from customers.
The MFS providers and PSPs will not be allowed to withdraw any cash from the TCSAs.
They will have to share the list of customers, merchants and other participants with the banks where the TCSAs are opened.
They will also have to monitor debit and credit entries in the TCSAs carefully and ensure compliance with relevant rules and regulations.
If there are multiple TCSAs, the MFS providers and PSPs can transfer money from one account to another.
Public funds and the outstanding liability of the MFS providers and PSPs to their customers will be presented separately in the audited financial statement of the Trustees (MFS providers and PSPs).
At the end of each day, the MFS providers and PSPs will ensure that the public funds are greater than or equal to the outstanding liability to its customers or participants for issuing e-money.
The trustees will have an effective internal audit mechanism to monitor its outstanding liability and the public fund.
The trustees must appoint a chartered accountant firm to conduct an audit on the outstanding liability and corresponding balances at the TCSAs.
The MFS providers and PSPs will have to obtain certification at least once each financial year from chartered accountant firms after conducting audit.
The trustees must submit the certification to the BB within 30 days of completion of the audit.
In addition, they will have to submit their audited annual report, financial statements and other required reports to the central bank.
Total transaction through MFS providers stood at Tk 55,059 crore in February, up 147 per cent from five years ago and 33 per cent year-on-year, data from the central bank showed.
The number of registered accounts in the MFS sector stood at 10.24 crore, an increase of 106 per cent from five years ago and 25 per cent a year earlier.