BY ELLENI ARAYA, AddisFortune

Without much deviation from its draft state, the long awaited directive that will allow banks and Micro Financial Institutions (MFI) to provide transaction-based mobile and agent banking services was issued, on January 1, 2013.

Now clients of banks and MFI’s, offering mobile banking services, will be able to make deposits and withdrawals through their mobile phones. They can also make payments to businesses or transfer money to clients using their mobile phones.

In previous years, the NBE had turned down requests from banks to launch transaction based mobile banking, stating it needed to issue this regulatory directive.

Instead those that had the technology were limited to providing clients with mobile services, such as; book transfers, viewing balance, mini-statements, notifications and alerts, on their phones. United, Zemen and Brehan banks were among those that offered such services.

Since these features were non-transaction based, the National Bank frowned upon calling the service ‘mobile banking’.

This led many banks, who had already acquired the technology to provide mobile banking, either along with their Centralised Online Realtime and Efficient (CORE) banking solutions or separately, in anticipation of the issuance of the directive.

As were mobile banking technology vendors, who had already set up shop inEthiopia, including Ireland-based M-Birr, which has signed a memorandum of understanding with ethio telecom, through its local branch. Bell Cash, an Irish company, is also in the process of setting up mobile banking with Bunna, Lion International, Oromia Cooperative and Wegagen banks.

Regulating this new system and building the capacity to regulate capital has taken time, according to National Bank officials.

The kind of mobile banking offered inEthiopiais one which makes use of agents that provide mobile banking services on behalf of mobile banking institutions. These services include; opening regular savings accounts for clients and performing ‘cash in cash out’ payments and transfer of funds, on behalf of the bank.

A client will have a ‘mobile account’ into which money is credited or debited, when using mobile banking services, according to the draft directive. The maximum balance that should be available in a mobile account, of an individual, is limited to 25,000 Br, and daily mobile banking transactions shall not exceed 6,000 Br, according to the directive.

This provision was, at one point, taken out of the draft directive, after some banks suggested that the limits should be raised to 30,000 Br and 10,000 Br, for balance and transactions respectively, according to a management team from one of the private banks.

However, the National Bank stuck to its original limits in the end.

The directive also places heavy responsibility on banks to make sure that agents comply with existing bank laws, including the ‘prevention and suppression of money laundering and financing of terrorism proclamation’ and ‘customers due diligence of banks’ directive.

Five banks, that Fortune talked to, have expressed pleasure at the issuance of the directive. They see it a great opportunity to reach ‘un-banked’ communities, in rural areas, and increase their deposit mobilisation.

The total amount of branches, from all fifteen banks existing in the country, is only 1,251, according to 2011/12 data.

“This is a meagre number when compared to neighbouringKenya, where the mobile service provider MPESA alone has 25,000 branches,” Berhanu Getaneh, president of both United Bank and the Bankers Association told Fortune. “The directive would bring an immense contribution towards increasing the number of people with access to banking services.”

Banks planning to provide mobile banking should first apply to the NBE, according to the directive. The application documents should include a detailed business plan, operational policy and procedure manual, and a risk management policy. The agents that the bank will use, and the type of agreement it will enter into, should also be clearly stated.

If the NBE approves the application, then the bank can start a pilot run that is limited to a specific area.

“It could start out with the main branch or use its own employees to test the system first,” Solomon Desta, Banking Supervision Directorate director, said.

Only after 2 to 3 months of pilot testing, and prevision a detailed report to the National Bank, could the bank launch full mobile banking services. This is if NBE allows the continuation of mobile banking services based on the results of the pilot project.

Banks that previously applied for mobile banking solutions would have to reapply accordingly, according to Solomon.

Already, interested banks are putting their minds to selecting appropriate agents.

“Supermarkets, gas stations and chain businesses are especially ideal to perform agency services for mobile banking,” Dagnachew Gessese, business development manager at Addis Bank told Fortune.

Views: 377

Tags: At, Banking, Ethiopia, Last, Legal, Mobile

Comment

You need to be a member of Sodere Ethiopian News and Entertainment to add comments!

Join Sodere Ethiopian News and Entertainment

SodereTube Ethiopian News

Apple CEO Tim Cook: 'I'm proud to be gay'

Apple CEO Tim Cook: 'I'm proud to be gay'

Netherlands couple married with Ethiopian wedding culture in Addis Abeba

Netherlands couple married with Ethiopian wedding culture in Addis Abeba

Ethiopian taxi driver Abebe Belew expressed his opposition against Uber, Lyft

Ethiopian taxi driver Abebe Belew expressed his opposition against Uber, Lyft

Amazing - Ethiopian man can remember pi, all embassies phone numbers - Ethio Talent Show 07/13

Amazing - Ethiopian man can remember pi, all embassies phone numbers - Ethio Talent Show 07/13

Alemneh Wasse talks about terrorists and the details of the plot for September 09, 2011

Alemneh Wasse talks about terrorists and the details of the plot for September 09, 2011

SodereTube Comedy

Lekefa New Comedy

Lekefa New Comedy

One of the most entertaining interview about Life in America with TekleBirhan Teka (Michael Holt)

One of the most entertaining interview about Life in America with TekleBirhan Teka (Michael Holt)

Funny prank on Serawit Fikire

Funny prank on Serawit Fikire

Comedian Semere Bariyawe On Seifu show, Funny Ethiopian photo poses and some comedy

Comedian Semere Bariyawe On Seifu show, Funny Ethiopian photo poses and some comedy

Ethiopia Funniest Episode Betoch Part 75

Ethiopia Funniest Episode Betoch Part 75

Events

SodereTube Sport

Supporters of Indian Team Atlético de Kolkata show their love for Ethiopian player Fikru Tefera

Supporters of Indian Team Atlético de Kolkata show their love for Ethiopian player Fikru Tefera

Ghedion Zelalem on Arsenal U19 Vs Galatasaray U19 5-1 Goals & Full Highlight 01/10/2014

Ghedion Zelalem on Arsenal U19 Vs Galatasaray U19 5-1 Goals & Full Highlight 01/10/2014

Ethiopia to construct 30 thousand seat Gambela stadium with 375 mill birr ($19mil)

Ethiopia to construct 30 thousand seat Gambela stadium with 375 mill birr ($19mil)

Mali 2: 3 Ethiopia Goals - 2015 Africa Cup of Nations Qualifications

Mali 2: 3 Ethiopia Goals - 2015 Africa Cup of Nations Qualifications

Ethiopia vs Mali Goals, Highlights and Discussion about the game

Ethiopia vs Mali Goals, Highlights and Discussion about the game

የ ፌስቡክ ጓደኛዎን ወይም ከኢሜይሎ አድራሻ ዝርዝር ወደ ሶደሬ.ኮም ይጋብዙ። You can now invite your Facebook friends and people in your address book to Sodere. It takes less than a minute. http://sodere.com/main/invitation/new

EthiopianTube Music

Romantic Surprise - American man traveled unannounced to Ethiopia and surprised his girlfriend

Romantic Surprise - American man traveled unannounced to Ethiopia and surprised his girlfriend

Ethiopia - Funny Comment from Balageru idol judge Sofi - Anteneh Ferew

Ethiopia - Funny Comment from Balageru idol judge Sofi - Anteneh Ferew

Ethiopia - Sisay Senatayehu - Balageru Idol

Ethiopia - Sisay Senatayehu - Balageru Idol

Ethiopia - YeAbsera Moges - Balageru Idol

Ethiopia - YeAbsera Moges - Balageru Idol

Ethiopia - Woineshet Alebachew - Balageru Idol

Ethiopia - Woineshet Alebachew - Balageru Idol

Ethiopian Videos

Men try to get girls holding smartphones but research says girls are more attracted by man with dog

Men try to get girls holding smartphones but research says girls are more attracted by man with dog

[Part 2] How to Kiss a girl - The Art of Kissing Love Vaccination from Ethiopikalink

[Part 2] How to Kiss a girl - The Art of Kissing Love Vaccination from Ethiopikalink

My sweet childhood memories by Bereket Belayneh

My sweet childhood memories by Bereket Belayneh

Seifu Fantahun shares funny pictures, Interviews Tsedenia Gebremarkos

Seifu Fantahun shares funny pictures, Interviews Tsedenia Gebremarkos

Love Clinic - Women who cheat on their boyfriends

Love Clinic - Women who cheat on their boyfriends

Ethiopian news and video portal. Sign in create profile, share videos, upload picture, invite your friends and have fun.

All Idol Shows (Balageru, Coca cola...)

Ethiopia - Balageru Idol - Kirubel Wendemeneh

Ethiopia - Balageru Idol - Kirubel Wendemeneh

Balageru Idol judges amazing eskista and dance at the end of Gonder audition

Balageru Idol judges amazing eskista and dance at the end of Gonder audition

Ethiopia - Funny moment - Anteneh Ferew - Betwedke Betalfem

Ethiopia - Funny moment - Anteneh Ferew - Betwedke Betalfem

Ethiopia - Sisay Senatayehu - Balageru Idol

Ethiopia - Sisay Senatayehu - Balageru Idol

Ethiopia - Woineshet Alebachew - Balageru Idol

Ethiopia - Woineshet Alebachew - Balageru Idol

© 2014   Created by Sodere.

Badges  |  Report an Issue  |  Terms of Service