BB to cut currency printing costs

Bangladesh Bank is devising ways to reduce currency printing costs as the country has to spend a whopping Tk 500 crore a year on new notes and coins, central bank officials said.

The expenses that include costs of printing materials, paper, ink, colour, security thread and printing doubled in the last five years to keep up with the demand and the economic growth.

"We are encouraging electronic payment gateways so that the dependence on cash goes down," an official said.

Three such payment gateways have been given licences as payment service operators and they are already in operation. They are shurjoPay, SSL Commerce (easy.bd.com) and IT Consultants Ltd (ITCL).

Some other applications are awaiting approval, according to the BB.

With these e-commerce channels, people can buy goods and services and top up their mobile phones. People will also be able to exchange money and make payments for purchases, utilities and other services.

"If we can reduce the currency printing cost by 20 percent, it will save us Tk 100 crore," said the BB official.

At present, the central bank has to spend Tk 0.95 on a one taka coin and Tk 1.2 on a two taka coin. A 5 taka coin costs nearly Tk 2.

The highest denomination note in Bangladesh is Tk 1,000, which costs around Tk 8, while a Tk 500 note costs around Tk 7 and a Tk 100 note nearly Tk 5.

The price is the same for a Tk 50 and Tk 20 note at around Tk 3 each. A Tk 10 and Tk 5 note costs Tk 2.2 and Tk 2 respectively. Kazi Saifuddin Munir, managing director of ITCL, welcomed the BB's plan to promote e-commerce transactions. But he sees some challenges as well.

"Infrastructure and logistics are inadequate in Dhaka for the e-commerce business," said Munir.

He said a seller in Gulshan does not want to sell goods to a customer in Dhanmondi as it will not be cost-effective because of the time needed to deliver the goods.

It is easy to transact with people who have plastic cards, Munir added. But the number of cards in the market would hardly be 1.2 crore.

"It is high time that pre-paid cards are introduced so that people can use those for online transactions."