Bangladesh Launches Automated Payment System On Trial Basis

November 8, 2009 7:46 p.m. EST

Dhaka, Bangladesh (AHN) - The central bank of Bangladesh on Sunday launched its automated clearing house on a testing and trial basis, it will begin functioning in full swing by early next year, officials said.

"The automated payment system will expedite the country's business activities as well as boost the economy," the governor of the Bangladesh Bank (BB), the country's central bank, Atiur Rahman told reporters on the occasion of the trial demonstration of the payment system at the central bank in the capital, Dhaka.

The automated clearing house will be implemented fully within the next few months with participation of all commercial banks, Rahman said, adding that introduction of the system in some cases elsewhere in the world had contributed to a boost in the gross domestic product (GDP) by 1.0 percent.

The Bangladesh Automated Clearing House (BACH), the automated payment systems platform, has two components - the first one is Bangladesh Automated Check Processing Systems (BACPS) and the second Bangladesh Electronic Funds Transfer Network (BEFTN).

"We've planned to implement the BACH fully some time early next year aiming to facilitate business activities through modernizing the payment and settlement systems," Executive Director of the BB Chowdhury Mohidul Hoque told AHN in Dhaka.

He also said around 35 commercial banks out of 48 have already installed software and hardware for setting up links between the banks concerned and the central bank.

"We expect that the rest of the banks will complete their preparations in this connection shortly," Mr. Hoque, who is also the project director, said, adding that such payment and settlement system will also help the banks to automate and digitize their functionalities.

Under the new system, the payment will be settled using automated check clearing system and electronic fund transfer among 1,050 bank branches in Dhaka initially, the BB officials said.

The central bank of Bangladesh also plans to extend such services to division and district levels in phases for the sake of smooth business activities in the country, they added.

Three commercial banks - state-owned Janata Bank Limited, Eastern Bank Limited and Dutch-Bangla Bank Limited - took part in the trial run of the automated clearing system on the first day.

The central bank earlier extended the deadline for introduction of automated clearing house by three months in consideration of requests from some commercial banks, they added further. The BACH was scheduled to launch on Aug. 3 this year.