The New Nation - Internet Edition

BSS, Dhaka

Bangladesh Bank (BB) has set December 31 this year the deadline for all scheduled banks to upgrade their banking services from traditional regime to automated era.

The BB in a circular on Tuesday asked all the banks to install the Core Banking Solution (CBS) and establish Inter-branch Connectivity Network (ICN) by 31 December 2010.

The banks have also been directed to report BB quarterly the progress of their automation process until they finish the tasks.

A BB official said the banks would have the options of installing any secured banking software (industrial term is CBS) at their choice.

He said the banks are also allowed to customize the software in their needs, but they should do this job by this year end.

The central bank has already established a Data Centre at its headquarters in the capital city and a Data Recovery Centre in the city's Mirpur area for automated banking system.

Machine-readable cheque-books for computerized settlements have also been introduced at the end of last year.

The central bank also introduced the Bangladesh Automated Clearing House (BACH) in November 8, 2009 on trial basis.

The automated system of clearing cheques significantly reduced the settlement time-from three days to only two hours.

But only a limited number of banks are participating in the BACH due to lack of banking software and inter-connectivity.

The BB in the circular said that it would bring all the banks in Dhaka city under the full services of the Bangladesh Automated Clearing House (BACH) soon.

According to BB, there are about 1,100 bank branches in Dhaka. In absence of banking software and interconnectivity, the BACH is now providing banks with semi automated services for payments and settlements, a BB official said.

He explained that the banks in Dhaka city presently stored data in a disc and than they send it to the BACH at the central bank for clearance.

With the installation of CBS and ICN, the data will instantly be transferred to the BACH for clearing and settlement.

All other banking including internet transaction for bill payments, fund transfer and direct debit can also be done after full automation, he said.

The official added that the banks would initially establish inter-connectivity among their branches, but the automated system would also facilitate all banks to have inter- connectivity among them.

He said that the central is expecting all the banks across the country would be able to render their clients automated services in phases.