Jatiya Kabi Kazi Nazrul Islam University

Trishal, Mymensingh.

Assignment on: Implications of Information System in Bkash of BRAC Bank.

Course Name: Financial Information System
Course Code: FB 402

Submitted to,

Jewel Kumar Roy

Assistant Professor
Department of Finance and Banking
Jatiya Kabi Kazi Nazrul Islam University

Submitted by,

Binoy Patrick Nokrek

ID No: 18132652
Session: 2017-18
Department of Finance and Banking
Jatiya Kabi Kazi Nazrul Islam University

Submitted Date: 07 March, 2022

 Executive Summary:

The report titled on information system of Bkash Limited, a subsidiary of BRAC Bank, started as a
joint venture between BRAC Bank Limited, Bangladesh and Money in Motion LLC, USA.

This report will show which information system is used in Bkash company. In which way they
transfer money everywhere.

Firstly, this paper contains the basic information of Bkash Company and the purpose of preparing
this report has been enumerated here. It has also been explained the importance of information
system in a company. It also contains other elements such as objective, limitations of the report.

On the other hand, this paper also contains a short history of bkash limited. It also explains their
product and services. They have some media center which is described by this paper. So it actually
covers the company’s information in short.

Lastly, we tried to describe the management system of bkash that means what hardware and
software is used by them to transfer money everywhere easily.
 Table of Content

Serial No Topics Page No

1 Objectives of the Study 1
2 Introduction and Company 2
Profile
3 Mission and Benefits 3
4 Background and Opportunity 4
5 Mobile Banking 5
6 World View of Mobile Banking 6
7 BRAC Bank/ BKASH Banking 7
Model
8 Bkash Services 8-9
9 Financial Statement of BKASH 10
10 Conclusion 11
 Objectives of the Study:

In recent days mobile financing industry become very much comprehensive. It deals with different
areas to capture the market and it requires huge promotional activities to survive. Beside this it
takes huge effort to know this system with general people. Moreover, they have to come up with
different innovative ideas to have a position in the market. Thus, the study over’s a broad spectrum
such as service, price, promotion, government, regulation etc. Based on the above facts the specific
objectives of the study follows:

To give an overview of Mobile financing industry in Bangladesh.

To find out about the future prospects in the industry.

To evaluate the performance of bkash.

To evaluate the competitiveness of bkash in the market.

To get an insight of the products of bkash.

Page No: 01
 Introduction and Company Profile:

In today’s new economy, Information Systems (ISs) or Technology (IT) is widely used, and they
are mainly the reason why industries and businesses have evolved and changed rapidly. The digital
revolution continues to transform most aspects of our daily life. In particular, the digital revolution
has resulted in the vertical convergence of business channel capacities. The digital revolution also
continues to transform the public sector organizations and services. For instance, the DMP (Dhaka
Metropolitan Police) receive GD (General Diary) application via online, Passport application, TIN
(Tax Identification Number) registration, University admission etc. are also submitted through
online. Other examples are Train tickets bought via mobile phones, online purchases, and social
interactions made via SMS, emails and social networks.

A next step in the digital revolution is the transformation of the time honored traditional physical
wallet into the e-wallet. bkash is one of the largest mobile financing company of the country. It is
also witnessing high growth. However, growth in the mobile financing industry is showing signs
of growing. Hence, I tried to portray an overview of the mobile financing industry of Bangladesh
and analyze bKash performance compared with DBBL Mobile Banking. bkash is a mobile money
system in Bangladesh operating under the jurisdiction of Bangladesh Central Bank as a subsidiary
of BRAC Bank, a local bank.
The service aims to serve users at the bottom of the economic pyramid (BOP) ensuring a broader
range of financial services across Bangladesh’s population as a whole. Launched in July 2011, the
service now has 2.2 million registered customers. Company Profile Bkash Limited, a subsidiary of
BRAC Bank, started as a joint venture between BRAC Bank Limited, Bangladesh and Money in
Motion LLC, USA. In April 2013, International Finance Corporation (IFC), a member of the
World Bank Group, became an equity partner and in April 2014, Bill & Melinda Gates Foundation
became the investor of the company. The ultimate objective of bkash is to ensure access to a
broader range of financial services for the people of Bangladesh.

More than 70% of the population of Bangladesh lives in rural areas where access to formal
financial services is difficult. Yet these are the people who are in most need of such services, either
for receiving funds from loved ones in distant locations, or to access financial tools to improve
their economic condition. Less than 15% of Bangladeshis are connected to the formal banking
system whereas over 68% have mobile phones. These phones are not merely devices for talking,
but can be used for more useful and sophisticated processing tasks. Bkash was conceived primarily
to utilize these mobile devices and the omnipresent telecom networks to extend financial services
in a secure manner to the under-served remote population of Bangladesh.

Page No: 02
 Mission:

By providing financial services that are convenient, affordable and reliable, bkash aims to widen
the net of financial inclusion. bkash wants to provide a solution for Mobile Financial Services,
built on a highly scalable Mobile Money platform, allowing the people of Bangladesh to safely
send and receive money via mobile devices.

Benefits:

Bkash, as a mobile financial service provider promises its users five core benefits which are fast,
affordable, secure, convenient and nationwide. These benefits are described in a brief below,

Fast:
Bkash promises it’s consumers to be the fastest transaction process. One can send and receive
money within minutes through bkash.

Affordable:
The sending and receiving money through bkash is very low of cost comparing with global
standard. It has been a great advantage for the general people of the country.

Secure:
Each and every transaction of bkash is based on a PIN of personal identification number which is
very secure. Moreover, the bkash account will be fully secure even if one lost his or her mobile. So
bkash is promising the best security in transaction of money.

Convenient:
Bkash is highly convenient for its users. People can send and receive money anywhere and
anytime. bKash is serving it’s consumers 24 hours a day and 7 days a week.

Nationwide:
Bkash has more than 160,000 agents nationwide and more than 300 ATMs. So the availability of
the service is very high nationwide.

Page No: 03
 Background and Opportunity:

In Bangladesh, as with many other countries in the developing world, people travel to urban
centers to earn a livelihood so they can support families in rural areas. One fundamental insight
driving the development of bKash was to cater for this growing class of workers, creating an
efficient system by which they could send money home in a secure, fast and affordable way.
bKash came up with a simple USSD interface, accessible by the cheapest (i.e. $15) handset.
“Smartphones would make it easy to implement mobile money, but the service would then be
limited to only affluent customers and would defeat the purpose of reaching the unbanked and
poor.”
Registering for bKash and cashing-in services are free of charge. For person-to-person transfers,
customers pay a flat fee of BDT 2 (or $.02) irrespective of the size of the transaction. In case a
customer wants to cash-out, there is a flat fee of 1.85% on the amount withdrawn. For example,
if a user wants to cash-out BDT 50, the cash-out fee is BDT 0.92 (or $.01). “Many bKash
customers have such small tickets, but their large volume compensates for the apparent small
ticket size.” As per the central bank’s prescription, bKash deposits the full value of its
customers’ wallet balances in a designated BRAC Bank account, which is under the surveillance
of the central bank. Separately, BRAC Bank maintains the record of all individual bKash
accounts in its own system.

“In the process, bKash maintains an arrangement that is cost effective, but stays fully under the
central bank’s jurisdiction.” Once users have electronic money in their bKash mobile wallets,
they can send the money to another bKash mobile wallet instantly. Recipients can walk to bKash
retail agents who give physical cash in exchange for electronic money and charge service fees.
“bKash’s focus on reaching the poor distinguishes it from services that have fees for cash-in or a
minimum cash-out fee.”

Page No: 04
 Mobile Banking:

The massive improvement of technologies around the world brings an opportunity to improve
the technological platform of banking sector. The goal of the extending service of banks with
improve technology is to satisfy the desire of customers. One of the extending services with
modern technological advancement is Mobile Banking.
In this process of banking customer are allowed to access into the banking system in anytime
from anywhere. The requirements for this process are to have a mobile device and mobile
network connection.

The core benefit of this mobile banking is to reach to the people who do not have the access in
internet banking or in normal banking procedure. It is mostly helpful for the people of remote
areas (GSMA Mobile and Development Intelligence, 2012). According to Raseda Sultana,
millions of people across the developing nations are relying on informal economic activities for
their living and most of these people are from the bottom stage of the pyramid. These mass
populations do not have the access into the basic financial services or the regular banking
system. This mobile banking brings the opportunity for these people to get the banking facility.
Now the reason why “mobile banking” is getting greater emphasize because more there are than
4 billion mobile subscribers who represent 61% population of world. So it is the best way to
reach among the biggest portion of world population. Also, mobile banking needs less
processing than general banking process. It helps the banks to reduce cost, requires less storage
facility. Mobile Banking is also better process among all the other e-banking process. In internet
banking there has the higher risk then mobile banking due to hacking system. Also to use
internet banking people needs extra skills to use computer.

On the other hand, to use Mobile Bank, customers’ needs to have the basic idea about how to
operate mobile in daily life. So to use this mobile banking a great level of awareness is not
needed to create. It is said that mobile banking is one of the best thing ever happened in the
personal finance management. Through this process customers will keep them attached with the
banking system all the time. This mobile banking is still in growing business. In some countries
mobile banking is become very much popular while in some countries it is just in the beginning
stage. Though it is in an emerging stage but already mobile banking has created a good level of
impact in world economy.

Page No: 05
 World View of Mobile Banking:

According to MAS (2010) a financial revolution is happening in money transactional world and
it is not only happening only in the skyscrapers of rich countries but also in the slums of
developing countries. This revolution is happening through the branchless banking system of
mobile banking.
Mobile Banking first introduced in 2001. From 2001 to 2006 there were only 10 Mobile Banks
were in world. In 2009 it increased up to 25, in 2010 it increased up to 38 and in the middle of
2011 this number of mobile bank increased up to 50. Surprising by the end of 2011 this number
reached up to 140 m-commerce organizations. The major mcommerce boom has happened in
African region following by Asian countries (Michael U. Klein, 2011) In African Nations,
different mobile companies are coming with the mcommerce business. Orange mobile company
is running an m-commerce business with brand name of Orange Money mobile banking. They
are running this business in Mali, Senegal, Madagascar, Kenya, Ivory Coast and Niger. Since
2008 they have signed up 1 million people. Though there are multiple mobile banks are working
in African nations but the real impact has been made by M- Pesa. M-Pesa is a mobile bank which
is a subsidiary of Vodafone. Only in Kenya, M-Pesa register more than 13 million customer,
while in Tanzania, M-Pesa has 6 Million customers and in 2010 in total 670 million transactions
generated through this mobile banking service. In Latin America potion Telefonica is giving the
service of mobile banking in four countries. Among those countries in Brazil, mobile banking is
establishing its place in good speed. It is believed that after Africa, Latin America is the place
where mobile bank will have greater success. In Latin America only 35 percent people have bank
account while 90 percent people have mobile phones. In northern American side, in USA almost
20% people are using mobile banking service in regular purpose. In Asian side mobile banking is
also on the way of success. In Pakistan, where are only 14% regular banking subscribers in there
already 500,000 customers are already subscribed with mobile banking
(http://www.thecitizen.co.tz).
This mobile banking is also successful in South Korea, Japan, China and Malaysia. In Japan,
there are already more than 1.5 million active mobile banking users and it is increasing.
Maldives and Bangladesh are also joining in this race. In India till now 77 banks have received
the approval for mobile banking. Though mobile banking have a greater success in world-wide it
is not seen the success in the European region yet. It’s already failed in Spain, Austria and some
Scandinavian countries. In Germany, in 2003 there were 22 banks were giving mobile banking
service but in 2006 it reduced into 14. It is believed that after the establishment of 3G service in
all over the Europe, then mobile banking may have success in Europe.

Page No: 06
 BRAC Bank/ BKASH Banking Model:

BKASH Limited is a joint venture between BRAC Bank Ltd., Bangladesh, and Money in Motion
LLC, USA. BRAC Bank introduced it mobile services by the name of BKASH, started Mobile
Banking on July, 2011. BKASH has followed a unique model for deployment of the Mobile
Banking in Bangladesh. bkash model has the following characteristics: Bank-led model:
BKASH Mobile Banking is a Bank-led model to fulfill the basic banking needs utilizing mobile
phones to the people who are unable to use conventional Bank services for different reasons and
constraints. Vision: Ensuring access to a broader range of financial services for Bangladeshi
people is the ultimate objective of BKASH. It has a special focus to serve the low income people
of the country and promote sustainable micro-savings to achieve broader financial inclusion by
providing financial services that are convenient, affordable and reliable. Bank for Poor: bkash is
working both as an extension of BRAC Bank and as a full-scale mobile phone-based payment
switch. This will highly benefit the country as 83% of the population lives under $2 a day and
access to finance can help in improving their economic situation. Less than 15% of Bangladeshis
are connected to the formal financial system whereas 44% of total populations are having mobile
phones. Providing financial services using this mean can make the service more accessible and
cost effective for the vast population of Bangladesh.

Five Parties involved: BKASH Mobile Banking has involved five parties – Bank (BRAC
Bank), Partners (Money in Motion LLC, USA), Mobile Network Operators (MNO), Agents and
Customers with a commission model to suit each of the parties.

Four Geographical tiers: The country has been divided into four tiers – territory, sub-district,
district and division. But BKASH mainly focus on the Poor people to serve them banking
facilities. So, their main focus on Working People in Garments Factories, Village area etc.

Present Condition: After the implementation of BKASH Banking Business Model the Present
Condition is that –

Technology MNO Lunch Customers Agents Transactions

Partnerships TK.
Fundamo Banglalink, July- 11
(Visa) Robi, GP 237,423 5,283 118.51

By applying the basic Bank Led Model, BRAC BANK/BIKASH has become the Largest Mobile
Banking Services Provider in Bangladesh though the services started 2 Months after the Dutch
Bangla Bank. [March, 2012]

Page No: 07
 Bkash Services:

Bkash Limited is a subsidiary of BRAC Bank. It is a joint venture organization between Money
in Motion, LLC, USA and Brac Bank Limited Bangladesh (bKash, 2013). It’s mission is to
provide affordable, convenient and reliable financial service towards the customers. Its
technology platform is Fundamo (visa) (Bangladesh Bank, 2013). It also has the Full Mobile
Financial Service permission. bKash’s mobile network partners are Robi, Grammen Phone,
Banglalink and Airtel. It is the only the mobile financial service provider which has one service
menu for all the operators. It has in total 30,000 agents all over the country. Still now it has the
highest numbers of agents in Bangladesh. Bkash Limited is giving the service of cash in, cash
out, send money (P2P) and payment (payment through organization or in shop). It is offering
free registration and also free balance, statement check and changing PIN offer. Rather than the
authorized agents it is also available in all Robi WICs, BRAC channel and Continental Courier
channel. Its highest amount of daily transaction limit is 1, 25, 000 Taka and highest amount of
monthly transaction limit is 2, 50,000 Taka. Also its monthly highest P2P transaction limit is
25,000 taka (Bank, July 2012). Still now, Bkash is the most visible mobile bank in Bangladesh.
It is running heavy advertising from the beginning. It is running its marketing through TV
advertisement, Radio advertisement, billboard, Poster, festoon, leaflet; shop pointer etc.

Bkash provides six type of services. They are:

*Cash in,
*Cash out,
*Send Money, and
*Payment.

Cash- In:

This is a process of deposit money to bkash account. This service is providing in the agent point.
The total process is given bellow:

1. Go to any bkash Agent;

2. Let the agent know the amount want to Cash In;
3. Write down the bkash Account Number and the Cash In amount in the Agent Register;
4. Pay the amount of money want to Cash in;
5. In exchange, the agent will send balance to bkash Account.

Cash-Out:

If bkash users have sufficient balance in their Bkash Account, users can withdraw cash anytime.
There is two way of withdraw money from bkash account, one option is from agents and another
is from BRAC Bank ATM Booth.

Page No: 08
Send Money:

Send Money allows you to transfer money from one bKash Account to another bKash Account.
To send money the process is given bellow:

 Go to any Bkash Mobile Menu by dialing *247#

 Choose “Send Money”.
 Enter the Bkash Account Number who want to send money to
 Enter the amount who wants to send
 Enter a reference about the transaction
 Now enter the Bkash Mobile Menu PIN to confirm the transaction.

Page No: 09
 Financial Statement (2020-21) of Bkash:

bKash Limited
Condensed interim statement of financial position (un-audited)
In Taka 31 March 2021 31 December 2020

Assets
Property, plant and equipment 2,765,082,327 2,285,406,207
Intangible assets 1,263,228,676 1,286,812,184
Deferred tax assets 501,356,481 482,538,139
Non-current assets 4,529,667,484 4,054,756,530

Operational and other receivables 1,267,803,265 1,242,919,916

Advances, deposits and prepayments 628,122,598 527,414,110
Contract assets 1,015,179,983 939,833,410
Current tax assets 360,972,767 331,727,767
Airtime balance 445,598,494 1,164,985,936
Trust cum settlement account and investments 47,908,850,976 47,728,470,067
Investment in fixed deposits 1,800,508,400 2,800,508,400
Cash and cash equivalents 3,023,001,198 2,565,167,230
Current assets 56,450,037,681 57,301,026,836
Total assets 60,979,705,165 61,355,783,366

Equity
Ordinary shares 38,194,900 38,194,900
Share premium - ordinary shares 1,286,205,568 1,286,205,568
Ordinary share capital and premium 1,324,400,468 1,324,400,468

Preference shares 8,796,300 8,796,300

Share premium - preference shares 8,286,915,782 8,286,915,782
Preference share capital and premium 8,295,712,082 8,295,712,082

Capital Reserve 18,479,529 18,479,529

Share money deposit 505,162 505,162
Retained earnings (610,325,055) (369,428,518)
Total equity 9,028,772,186 9,269,668,723

Liabilities
Other non-current liabilities 7,145,802 7,145,802
Lease liabilities 522,804,340 598,494,684
Non-current liabilities 529,950,142 605,640,486

Defined benefit plan - gratuity 320,936,477 299,192,243

Customer and other deposits 47,460,393,364 47,008,492,699
Operational and other payables 2,231,545,628 2,449,295,878
Lease liabilities 156,011,314 160,048,444
Accrued expenses 1,252,096,054 1,563,444,893
Current liabilities 51,420,982,837 51,480,474,157
Total liabilities 51,950,932,979 52,086,114,643
Total equity and liabilities 60,979,705,165 61,355,783,366

Page No: 10
 Conclusion:

To run a profitable mobile/online/internet banking as a version of Electronic Banking in

Bangladesh, Specific and Suitable Business Model is primary requirement. DBBL mobile
banking, bKash and Citi Bank N/A are the successful banks whose model carries an importance
in developing any new business model or to describe the model of business theory. It is my
immense pleasure to conclude the report as a part of my internship program. The report is a
reflection of my work, sincerity, credibility as well as coordination between me & bkash
Limited. I tried my best to provide as much as information I could.

As the industry is its early stage, companies tend to keep their information confidential. I
consider myself lucky to be able to work in a company that provides such scope for learning.
Certainly, this is very uncommon in Bangladesh. The work environment is also one of the best
among the companies in Bangladesh. The mobile financing industry is growing at excellent pace.
While it took only two year for bkash to reach 3 million, DBBL have 1 million within two year.

Beside this all the other 25 companies have huge potential to increase their market share, because
the industry is in very early stage. There is huge opportunity for the new interns in the industry.
At the wrapping up it can be said the bkash limited still working hard to grab the market
although they are the market leader with 71% market share. But the competition of this industry
developed rapidly. But yet bkash is in a comfortable place in this industry but mot in a secure
place.

To retain the market leader position bkash is introduce new services. If they can continue to cater
to the needs of their customers like they are doing now, they have a bright future ahead of them.

Page No: 11