In a groundbreaking development, Bangladesh Bank has embarked on a silent revolution, ushering in a new era in the realm of digital payments. The central bank has achieved a remarkable milestone by introducing its indigenous software, NIKASH-BEFTN, a testament to the nation’s commitment to self-reliance in the IT sector.
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A Pioneering Leap
Bangladesh Bank’s IT team has spearheaded the development of the NIKASH-BEFTN software, marking a distinctive departure from the conventional reliance on foreign software. This initiative underscores a commitment to fostering homegrown technological solutions, particularly in the critical intersection of government operations, information technology, and banking services.
Fast forward to November 12, 2023, and Bangladesh Bank is once again at the forefront of innovation with the introduction of Nikash-BEFTN. Developed internally by the dedicated team at Bangladesh Bank, Nikash represents a significant leap in electronic funds transfer capabilities.
On November 1, 2023, BB launched the first of the National Card Scheme-TakaPay to settle payments nationally without external dependence.
Evolution of Nikash-BEFTN
In February 2011, Bangladesh Bank introduced a groundbreaking initiative with the launch of the Bangladesh Electronic Fund Transfer Network (BEFTN). The inception of BEFTN set the stage for a new era in Bangladesh’s financial landscape. This marked a pivotal shift in the nation’s financial sector, replacing traditional check-clearing systems, and eliminating the need for paper transactions, it brought efficiency, speed, and convenience to electronic fund transfers. with a paperless electronic interbank funds transfer system. BEFTN revolutionized transactions, facilitating seamless credit and debit transfers among scheduled banks and serving diverse purposes, from person-to-person payments to utility bills and tax transactions. Over the years, BEFTN became integral to the banking sector, handling a multitude of transactions and contributing to the modernization of financial processes.
Bangladesh Bank is spearheading a transformative leap in digital payments with the upcoming launch of Nikash-BEFTN, developed internally by a dedicated team. Expected to handle a remarkable 46 lakh electronic fund transfers (EFTs) per hour, Nikash promises enhanced efficiency and cost-effectiveness in innovative financial solutions. Following a successful trial run, the software is set to revolutionize government expenditure management, reducing operational costs significantly. The move aligns with Bangladesh Bank’s commitment to digital interventions, streamlining fund disbursement and minimizing manpower involvement.
The renovation of the Bangladesh Electronic Fund Transfer Network (BEFTN) into the new Nikash software marks a strategic move by Bangladesh Bank. Inspired by the success of the Government eTransaction Processing Hub (GeTPH), the central bank sought to upgrade BEFTN but faced a prohibitive $1.2 million renovation fee from a supervisory firm. Undeterred, the central bank’s engineers embraced the challenge as an opportunity for self-reliance. By developing Nikash internally, the engineers showcase ingenuity and resilience, turning obstacles into a pathway to success. This initiative reflects Bangladesh Bank’s commitment to fostering technological advancements and reducing dependency on external entities for critical financial infrastructure.
The success of this initiative builds upon the achievements of the Government eTransaction Processing Hub (GeTPH) introduced in 2019, highlighting Bangladesh’s commitment to digital progress in financial services. GeTPH played a pivotal role in expediting fund transfers, reducing operational costs, and eliminating corruption in social safety net programs. This triumph positions GeTPH as a transformative force in streamlining financial transactions and fostering financial inclusion in Bangladesh.
The success of the Government eTransaction Processing Hub (GeTPH) in Bangladesh stands as a testament to the nation’s commitment to digital financial progress. Introduced in 2019, GeTPH facilitated nearly all public payments digitally in 2021, covering salaries, cash support, and stipends. Over Tk90,000 crore was disbursed to 2.67 crore beneficiaries, showcasing the platform’s efficiency.
Nikash-BEFTN: A Technological Marvel
Nikash is not just an upgrade; it’s a technological marvel designed to meet the evolving needs of the banking sector. With the capacity to handle a staggering 46 lakh (4.6 million) transactions per hour, Nikash far surpasses the capabilities of its predecessor, BEFTN, which could accommodate 1 lakh (100,000) transactions.
Financial Prudence: Reducing Operating Costs
Implementing Nikash is not just about technological advancements; it’s also a financially prudent move. The new system is expected to bring about a 25% reduction in operating costs for the banking sector. This cost-effectiveness makes Nikash a strategic choice, aligning technical innovation with fiscal responsibility.
Efficiency Round the Clock: Three Processing Sessions
Nikash ensures round-the-clock accessibility with electronic transfers processed in three daily sessions. These sessions span from 12:00 AM to 11:59 AM, 12:00 PM to 2:59 PM, and 3:00 PM to 11:59 PM. This 24/7 availability reflects a commitment to providing efficient and timely financial services to users.
Security at the Forefront: A Crucial Imperative
While embracing technological advancements, it is paramount to prioritize the security of the Nikash-BEFTN platform. The central bank and scheduled banks must conduct regular security assessments to uphold the integrity and trustworthiness of the system. With stringent security measures in place, Nikash promises not only efficiency but also a robust and secure environment for electronic fund transfers.
class=”wp-block-heading”>Reimagining EFT Payments
The NIKASH-BEFTN software stands as a testament to the central bank’s commitment to innovation and self-sufficiency. It replaces the international standard software previously employed for Electronic Fund Transfer (EFT) payments within Bangladesh Bank. This momentous shift signifies a strategic move towards reducing dependence on foreign technology and establishing robust domestic capabilities.
Economic Benefits for All
The implementation of NIKASH-BEFTN extends beyond a mere technological shift; it holds the promise of unlocking substantial economic benefits for the entire nation. All banks across the country will now utilize this software to facilitate various financial transactions, including the disbursement of salaries and allowances for the Bangladesh government.
Inauguration by the Honorable Governor
The auspicious inauguration of the NIKASH-BEFTN software was graced by the presence of the Honorable Governor. This symbolic gesture not only emphasizes the significance of the occasion but also highlights the endorsement and support from the highest echelons of the central bank.
Simultaneous Adoption Across Banks
The immediate implementation of the NIKASH-BEFTN software across all banks in Bangladesh signifies a seamless transition into a new era of digital payments. This synchronized adoption ensures a swift and comprehensive integration, maximizing the efficiency and impact of the indigenous software.
Boosting National Capacity
Beyond the evident advantages in terms of digital payment processing, the adoption of NIKASH-BEFTN holds the key to enhancing the national capacity in IT. By cultivating in-house expertise and relying on the skills of its own workforce, Bangladesh Bank reinforces its commitment to technological sovereignty.
Reducing Foreign Software Dependency
One of the pivotal outcomes of this initiative is the significant reduction in dependency on foreign software. Bangladesh Bank’s decision to replace international standard software with a homegrown solution not only strengthens the nation’s technological resilience but also mitigates the need for substantial foreign software imports.
Foreign Currency Savings
In addition to fortifying technological independence, the deployment of NIKASH-BEFTN translates into substantial savings in foreign currency. The construction and utilization of this indigenous software contribute to the conservation of foreign exchange, aligning with broader economic objectives.
As Bangladesh Bank takes this giant leap towards technological self-sufficiency, the ripple effects are poised to shape the future landscape of digital payments and IT infrastructure in the country. The success of NIKASH-BEFTN serves as a beacon for other sectors to explore and embrace homegrown solutions, fostering a culture of innovation and resilience.
In essence, Bangladesh Bank’s introduction of the NIKASH-BEFTN software marks not just a technological upgrade but a transformative stride towards self-reliance, economic empowerment, and a future where the nation’s digital prowess is steered by its own ingenuity.