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STATE BANK OF PAKISTAN BANKING SUPERVISION DEPARTMENT KARACHI
BSD
Circular No.02
February 14, 2003
The President(s),
Microfinance Banks/Institutions
Dear
Sirs,
GUIDELINES FOR MOBILE BANKING OPERATIONS OF MICROFINANCE BANKS/ INSTITUTIONS
Under the legal
framework for Microfinance Institutions, the Microfinance Banks /
Institutions can undertake mobile banking operations to reduce cost
and increase outreach of Microfinance services. The operation,
however, has inherent risks both for the Microfinance Banks /
Institutions and the general public / MFIs clients. To mitigate the
risks associated with this activity, the State Bank of Pakistan has
prepared guidelines in consultation with the stakeholders. These
guidelines shall be applicable on mobile banking operations of
Microfinance Banks / Institutions, and shall come into force with
immediate effect.
The guidelines, interalia, provides for opening of Service Centers
within a specified radius of the licensed branch, with prior
permission in writing from SBP. The details of Service Centers /
Satellite Offices, opened, if any, prior to issuance of this circular
shall be reported to SBP within one week of issuance of this circular
for regularization.
Please
acknowledge receipt.
Yours
faithfully,
Operations
of MFBs/MFIs (JAMEEL
AHMAD)
Director
GUIDELINES FOR MOBILE BANKING OPERATIONS OF MICROFINANCE BANKS / INSTITUTIONS
Areas to
be Served
Areas / Locations within District / City Government limits in
which the bank has a licensed branch or areas/location within a radius
of 50 Kilo Meters of the licensed branch could be covered through
mobile banking. The MFBs shall design the mobile banking operations in
a way, which ensures cost effectiveness and financial viability of the
operation. In addition to provision of banking services through mobile
teams/vans, the MFBs with prior permission in writing from SBP may
also open small outlets/service centers within the above-defined area
of the licensed branch to provide a local contact point to the
clients. The service centers shall have minimum infrastructure manned
by 2-3 bank staff and shall inter alia be mandated to a) create
awareness in the area about banks’ products b) form community
organizations/groups and c) provide loans to the clients. The Service
Centers shall not offer savings/deposit mobilization services and will
not maintain overnight record or cash. The record shall be maintained
at the licensed branch under which the service center would operate.
For the purpose of extending savings services, the service center may
notify the date and time, once or twice in a week at which the mobile
van would be visiting the service center so that the clients willing
to avail savings services may deposit the savings etc. with the mobile
team.
The license to open a branch in a particular area shall also mean
permission to undertake mobile banking with in the above-defined
radius of the branch.
Mobile Banking Strategy & Plans
The Bank shall ensure standardization while providing mobile banking
services and shall prepare a Bank-wide Mobile Banking Strategy in
consultation with its field staff highlighting its objectives,
services to be offered, frequency of visits, insurance, security,
control mechanisms, the operating cost and record keeping etc. A copy
of the complete strategy shall be submitted to SBP for information.
The strategy shall be reviewed semiannually in the light of field
experiences and other developments in the sector.
The Branch Managers shall prepare quarterly mobile banking plan
keeping in view the demographic statistics of the areas to be served
and the overall mobile banking strategy of the bank. He/She will
assign areas to mobile teams, which will be rotated in the teams
periodically. Each mobile team shall prepare weekly plans & schedule
of its visits and get it approved by the branch/hub manager. The
manager shall ensure that the teams’ plans/schedules are in line with
the branch mobile banking plan and the bank’s overall mobile banking
strategy and shall ensure its strict compliance. The branch and mobile
team plan shall be available in the branch for review of internal
/external audit teams and SBP inspection teams etc.
OPERATIONS
Mobile banking staff shall record the details of their field visits
before leaving the Bank.
Mobile staff shall take last day's closing account balances for next
day's field visit and get it authenticated by the authorized officer /
branch manager.
The Bank shall issue identification cards to the Mobile officers,
which would be displayed/shown to the clients in case of need.
While opening Deposit and loan Accounts etc., due care shall be
observed in identification of Clients as prescribed under Prudential
Regulations for MFBs/MFIs. The Branch Manager or his/her designated
officer other than the officer who opened the account shall randomly
make physical/field verification of at least 25% of the deposit/loan
accounts within one month of opening of accounts.
All cash deposits received shall be recorded on the passbook available
with the depositors and similarly the collection against loans shall
be acknowledged by proper receipts
The clients shall be provided with Statement of Accounts at regular
intervals (quarterly/half yearly or some other period)
SECURITY
An armed security guard to accompany the bank officers visiting the
Mobile sites.
The net cash collected shall either be deposited in the branch of a
Correspondent Bank, having account of the bank or deposited in the
branch on the same day. The deposit slip and other documents used for
recording various transactions during the day should also be submitted
to the concerned branch on the same day.
The field visit shall be conducted in daylight and the mobile officer
will return the branch by the evening the same day
Adequate insurance cover shall be made available for cash-in-transit,
vehicles, and staff.
The Mobile Banking Teams shall be provided with Mobile/Cellular phone
facility and will be required to have all the emergency numbers of law
enforcement/security agencies, hospitals, fire stations etc., to be
utilized in case of any emergency &/or untoward incident.
The schedule of visits of different mobile teams shall be kept secret
by the branch manager and be divulged to the concerned mobile teams on
fortnightly basis. As far as possible different routes be used by the
mobile team while visiting a place more than once in a fortnight.
AUDIT & CONTROL
All officers on Mobile duty to return to the Branch the same day by
evening, and deposit the collected cash at the Branch duly
acknowledged by a responsible officer. All mobile banking transactions
shall be reviewed by a duly authorized officer/Branch Manager and
recorded in the branch ledgers etc. on the same day.
The bank shall use standard printed vouchers to record mobile banking
transactions. It shall develop control mechanism, which should inter
alia ensure safekeeping of the vouchers books, voucher books issue and
utilization record and safe keeping of counter folios.
No officer shall retain cash at home overnight.
Internal Audit department shall develop appropriate mechanism / system
to ensure compliance with the guidelines and also to minimize the
risks inherent in the mobile banking operations. The scope of Internal
Audit and their periodic audit plans shall comprehensively cover the
mobile banking activities records.
Branch Manager shall accompany the mobile teams occasionally and shall
also do some independent verification of balances in loans and
deposits with bank's records and record his/her observations.
The bank shall have an appropriate policy for rotation of mobile
staff.
The mobile team shall maintain logbook etc. having complete record of
the vehicle running along with proper authorization.