Investors in Bangladesh’s national savings schemes will no longer face delays in receiving profits or principal because of incorrect bank account numbers, following the introduction of an automated Account Verification System (AVS).
The new system will become operational on 15 September through coordination between Bangladesh Bank and the country’s scheduled banks. It will instantly verify bank account details submitted by customers when they purchase savings certificates or bonds.
The initiative has been introduced under the Strengthening Public Financial Management Program to Enable Service Delivery (SPFMS), implemented by the Finance Division of the Ministry of Finance.
Transactions under nine of the government’s 11 national savings schemes are currently processed automatically through the National Savings Scheme Online Management System, commonly known as the NSC system.
The system has 3,946,224 registered customers, while around 175,000 electronic fund transfers (EFTs) are made each day to pay investors their profits and principal. About 8,000 new savings certificates are also issued daily.
The NSC system already included facilities to verify customers’ national identity cards and mobile phone numbers. Bank account verification has now been added to these safeguards.
Previously, the online platform had no mechanism to automatically verify bank accounts. Account numbers were entered exactly as provided by applicants, meaning that even a single incorrect digit could result in an EFT being rejected and returned.
Officials then had to correct the account information and initiate the payment again, causing delays and inconvenience for investors while increasing the workload of issuing offices, the Department of National Savings and other agencies.
Incorrect account details could also create a risk of funds being transferred to another person’s account.
Under the new arrangement, a bank account number will be checked as soon as it is entered into the NSC system. The verification will take place through Bangladesh Bank and the relevant scheduled bank.
The system will first establish whether the account is valid and active. It will then match the account holder’s details against their national identity card or passport number to confirm their identity.
Any error or discrepancy should therefore be detected before a payment is processed.
The AVS will be used in two situations. It will verify bank account details when customers purchase a new savings certificate or bond, and it will check any new account details submitted by investors seeking to change or correct their bank information after making an investment.
The Department of National Savings expects the system to reduce incorrect bank account entries to almost zero. It is also expected to reduce returned EFTs, ease difficulties for investors and cut the administrative workload associated with correcting payment details.
The system should also help ensure that investors’ profits and principal are transferred accurately and securely to the accounts of the intended recipients.
The Finance Division said the introduction of AVS represents an important step towards modernising digital services under the national savings schemes.