Bangladesh Bank

Payment and settlement systems are the means by which funds are transferred among financial institutions, businesses, and individuals and are considered to be the critical factor for proper functioning of country's financial system. With the mandate of Bangladesh Bank Order 1972, Payment Systems Department (PSD) endeavors for promoting new payments, clearing and settlement systems to ease financial transactions ensuring circulation of money in the economy and also enforces new rules regulation to facilitate payment systems innovation in the country.

Established in 2012, Payment Systems Department’s core objective includes establishing modern and efficient interbank payments, clearing and settlement system. In parallel, the department looks after the Law, regulation, licensing and oversight of the payment systems. Payment System Department’s function may be divided into following three broad categories:

  1. Regulation, Policy and Licensing
    1. Legal and Regulatory Function
    2. Mobile Financial Services
    3. Payment Service Provider (PSP) and Payment System Operator (PSO)
    4. Regulatory FinTech Facilitation Office (RFFO)
  2. Operation
    1. Bangladesh Automated Clearing House (BACH)
      1. Bangladesh Automated Cheque Processing Systems (BACPS)
      2. Bangladesh Electronic Funds Transfer Network (BEFTN)
    2. National Payment Switch Bangladesh (NPSB)
    3. Bangladesh Real Time Gross Settlement (BD-RTGS)
  3. Payment Systems Oversight


(a) Bangladesh Automated Cheque Processing Systems (BACPS)
Since inception in October, 2010 BACPS is the only state-of-the art cheque clearing facility. It uses the Cheque Imaging and Truncation (CIT) technology for electronic presentment and payment of paper-based instruments (i.e. cheque, pay order, dividend & refund warrants, etc). BACPS operates in a batch processing mode. Transactions received from the banks during the day are processed and settled at a pre-fixed time. Under BACPS umbrella High Value (HV) Cheque Clearing (Cheque amounting Tk. 5,00,000 or above) and Regular Value (RV) Cheque clearing are operated. At present HV presentment cutoff time is at 12:00 and the return cutoff is at 15:00 while for RV clearing presentment cut off time is at 12:30 and return cut off is at 17:00.

(b) Bangladesh Electronic Funds Transfer Network (BEFTN)
Incepted in February 2011, BEFTN was country's first paperless electronic inter-bank funds transfer system. It facilitates both credit and debit transactions, as a lead over cheque clearing system. This network can handle credit transfers such as payroll, foreign and domestic remittances, social security payments, company dividends, bill payments, corporate payments, government tax payments, social security payments and person to person payments. At the same way it accommodates debit transactions like utility bill payments, insurance premium payments, Club/Association payments, EMI payment etc. Most of Govt. salary, social benefits, all social safety net payments and other government payments are processed through BEFTN.

(c) National Payment Switch Bangladesh (NPSB)
Operational since 2012, NPSB is meant for establishing interoperability among participating banks for their account and card based transactions. Currently, it caters interbank Automated Teller Machines (ATM), Point of Sales (POS) and Internet Banking Fund Transfer (IBFT) transactions while the Mobile Financial Services interoperability is under active consideration. 53 Banks are now interconnected through NPSB for their ATM transactions. Currently, four types of interbank ATM transaction (i.e. cash withdrawal, balance enquiry, fund transfer and mini statement) could be done through NPSB. As of October 2021, 53 banks are interoperable for POS transactions and 30 banks are interconnected for their IBFT transactions. There are different limits for individual and institutional IBFT transactions. For individual, the maximum value of each transaction is 3,00,000 taka and the frequency is maximum 10 times a day and not more than 10,00,000 taka per day. For corporate, limit has been set on each transaction as 5,00,000 taka and maximum frequency as 20 times a day and 25,00,000 taka per day. It is mandatory for the participating banks to ensure Two Factor Authentications (2FA) for any online/e-commerce/interbanking/card not present transactions.

(d) Real Time Gross Settlement System (RTGS)
To facilitate real time settlement of high value time critical payments BB introduced Bangladesh Real Time Gross Settlement (BD-RTGS) system during October 2015. It opened a new dimension for the banks and for the corporate to settle their payments instantly, at the same time individual customers are also availing this service for settling their large value transactions. As of October 2021, more than 10810 online branches of the schedules banks are connected with BD-RTGS system and the number is increasing gradually.


a) Legal and Regulatory Function
Proper legal and regulatory framework is important to ensure smooth functioning of the payment and settlement system. The legal basis for Bangladesh bank to promote a safe secure payment system lies in the Bangladesh Bank Order 1972. Side-by-side Payment Systems Department issues regulation and publishes systems rules, which among other defines roles and responsibilities of the participants of specific payment systems. Currently, a draft regarding Payment and Settlement Systems Act made by Bangladesh Bank is under process at Ministry of Finance.

b) Mobile Financial Services (MFS)
Bangladesh Bank has introduced efficient off-branch Mobile Financial Services (MFS) during 2011 in Bangladesh as the country acquired an omnipresent mobile phone network experienced, large number of mobile phone users and improved IT infrastructure. Within ten years, this exponentially growing Bank-Led model of MFS has become the largest MFS market in the world.

Bangladesh Bank permits Cash in, Cash out, Person to Person (P2P), Person to Business (P2B), Business to Person (B2P), Person to Government (P2G) and Government to Person (G2P) payment services through MFS domestically. No cross border money transfer is allowed under this service. However, local disbursement of inward foreign remittance comes through banking channel is permitted. Any adult can open MFS account with any provider at an agent point or bank branch with a photo and legal identification. In this case, having more than one MFS account by one person with the same provider is not permitted.

c) Payment Service Provider (PSP) and Payment System Operator (PSO)
According to "Bangladesh Payment and Settlement Systems Regulation-2014 (BPSSR-2014)" Payment Systems Department (PSD) issues license in two broad criteria- Payment Service Provider (PSP) and Payment System Operator (PSO).

It gives PSP license to the company who facilitates payment(s) or payment processes directly to the customers and settling their transactions through a scheduled bank or financial institution; for example E-wallet, Mobile Wallet etc. Besides, PSD gives PSO license to the company who operates a settlement system for payment activities between/among participants of which the principal participant must be a scheduled bank or financial institution; such as payment gateway, payment aggregator etc. PSD reviews the market demand, business rational, regulatory requirements, risk management systems, settlement systems, eligibility criteria and others according to BPSSR-2014 for considering the application of license of PSP or PSO.

    List of Authorized PSO and PSP:
  1. IT Consultants Ltd (PSO)
  2. Software Shop Limited (PSO)
  3. ShurjoMukhi Ltd (PSO)
  4. Portonics Limited (PSO)
  5. Soft Tech Innovation Limited(PSO)
  6. iPay Systems Ltd (PSP)
  7. D Money Bangladesh Ltd (PSP)
  8. Recursion FinTech Ltd (PSP)
  9. Green & Red Technologies Ltd (PSP)
  10. Progoti Systems Ltd. (PSP)
  11. Optimum Solution & Services Limited (PSO)
  12. Service Hub Limited(PSO)
  13. ABG Technologies Limited(PSP)
  14. Digital payments Limited(PSP)
  15. Fingerprint Information Technology Limited(PSO)
  16. DGepay Services Limited(PSO)
  17. Sheba Fintech Limited(PSP)
  18. Paperless Limited(PSO)

d) Regulatory FinTech Facilitation Office (RFFO)
With the phenomena of technological advancements affecting every sphere of life, financial services have also been changed by technological and digital innovations. The disruptive innovative technology is making extraordinary impacts on Finance-in the way of doing business. Financial sectors are getting a new dimension with introduction of new technological and financial solutions designed/offered by a number of financial entities and technology firms. It has been proven that FinTech or digital innovations have become transformative force in the financial markets. FinTech brings efficiency improvements, risk reduction and greater financial inclusion. It becomes imperative to understand the granular aspects of FinTech and its implications so as to review and reorient appropriately the regulatory framework and respond to the dynamics of the rapidly evolving FinTech scenario.

Realizing these factors, a Regulatory FinTech Facilitation Office (RFFO) is established in October, 2019. This may be considered as a significant primary step towards enabling more financial sector innovators to enter the market in order to promote financial services to mass people within affordable price range. RFFO facilitates interested innovative FinTech ideas to apply for Pilot project and provide related regulatory assistance to the participants. Interested FinTech participants may contact to RFFO for any kind of query or support through following email address:


Payment Systems Oversight is a specialized form of supervision of existing and planned payment systems which is one of the key functions of all the central banks around the globe. It promotes the objectives of safety, efficiency and soundness of payment systems by effective monitoring and assessment of payment systems and thereafter, suggesting policy changes.

With the mandate of Bangladesh Bank Order 1972 Bangladesh Bank has introduced a number of new and digitalized payment platforms and services which became the vital part of the financial infrastructure of the country. Effective oversight is the means for stabilizing financial infrastructure by identifying and well managing payment systems associated risks. Therefore, Payment Systems Oversight focuses on the following activities:

  1. Collects onsite and off-site data from systems and participants regarding day to day operation, financial flow and transaction pattern, risk exposures, risk management procedures and practices, back-up and business continuity plan, disruptions and disputes etc for monitoring.
  2. Checks compliance of systems and participants with applicable rules and regulations, identifies the gap and comes up with recommendations with time to time follow up.
  3. Analyzes the weakness of systems, participants or schemes and identifies the areas that need improvements or intervention of BB.
  4. Does trend analysis of systems and participants data and calculates the market share of each to prioritize the segment for monitoring.
  5. Does and facilitates 'Self-Assessment' of systems and participants on the basis of regulatory requirements and International Standard.