MFS interoperability by December
People will be able to transfer funds from their mobile wallets to other accounts belonging to another carrier and banks by December in a development that would give the mobile financial service (MFS) industry a massive boost. Bangladesh Bank has already completed the necessary tasks to ensure interoperability of the service, which was rolled out in 2011. Interoperability refers to the basic ability of different computerised products or systems to readily connect and exchange information with one another, in either implementation or access, without restriction. The central bank carried out a study between February 1 and February 14 to establish interoperability among MFS providers and banks. Twelve banks, two payment service providers, and one MFS provider took part in the piloting. The upcoming system will allow clients to transfer funds from banks to MFS providers and vice versa.
In the last decade, the MFS industry has made significant strides. The number of registered accounts with MFS providers spurted to 10.27 crore at the end of March this year. Transactions rose 50 per cent year-on-year to Tk 59,642 crore.
The interoperability will be ensured through two platforms: the Interoperable Digital Transaction Platform (IDTP) and the National Payment Switch Bangladesh (NPSB).
Bepza economic zone eyes $10b investment
The Bangladesh Export Processing Zones Authority (Bepza) is establishing an economic zone at the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) to diversify exports. The agency will emphasise the electronic and spare parts manufacturing industries keeping in mind the fourth industrial revolution and job creation. “The new zone will be different from the existing zones of the Bepza as we will not give priority to the apparel industry,” said Md Nazrul Islam, executive chairman of the Bepza. The planned economic zone will be an EPZ inside the BSMSN in Mirsarai of Chattogram. Investors will have to sell 90 per cent of the products to be manufactured in the international markets, and the rest could be sold in the domestic market following customs and other rules. Islam said the new zone would attract at least $10 billion in investment and employ five lakh people.There are eight EPZs under the Bepza across the country. A total of 476 industrial units have for been set up in the EPZs. Of them, 300 units are textile and related accessories factories, 32 footwear plants, 19 electronics and electrical goods factories, 13 plastic goods factories, 13 tent-producing units, and 11 are service-oriented industries.
The factories so far attracted $8 billion investment and have created around 4.5 lakh jobs. They shipped products worth about $6.5 billion in the fiscal year 2019-20, down from $7.2 billion a year ago because of the impact of the coronavirus pandemic. The EPZs account for a fifth of the total export receipts for Bangladesh.
An exceptional move in mutual fund sector
Unit holders of Southeast Bank 1st Mutual Fund have given the go-ahead for VIPB Asset Management Company to convert the closed-end fund into an open-end one. The development is being viewed by analysts as an exceptional and good move as most closed-end funds have had tenures extended instead of being liquidated, leaving investors unable to realise their gains once maturity is reached. The VIPB set an example in the mutual fund industry by allowing unit holders to decide the future of the tenure extension of its closed-end mutual fund. Mutual funds pool together money from many investors and channel it into securities such as stocks, bonds and other assets.
The Southeast fund had a 10-year tenure. It could be extended by another decade as per a Bangladesh Securities and Exchange Commission (BSEC) notification. In 2018, the BSEC allowed the extension of closed-end mutual fund tenures by another 10 years following calls from a few asset management companies. Most fund managers extended the tenures of their funds without availing the opinion of their unit holders. However, the VIPB swam against the tide by arranging an online vote for taking approval from unit holders on whether they wanted to liquidate the fund or transform it into an open-end fund. The VIPB got 99 per cent of the votes in favour of transforming the fund into an open-end one, according to a special meeting on the issue on May 25. Closed-end mutual funds are traded at the bourses on the basis of demand and supply, whereas, open-end mutual funds are traded on the basis of net asset value of funds. Tenure extension of mutual funds impacted investor confidence so fund managers should liquidate their funds, said Abu Ahmed, a stock market analyst.