Citibank and DIGI Telecommunications Sdn Bhd have teamed up to provide a new service - DiGiREMIT - to facilitate the transfer of money from Malaysia to Bangladesh, Indonesia and the Philippines.The new service is designed to simplify the transfer of money by using mobile phones. DIGI acts as a remittance agent of Citibank to its prepaid and postpaid cell phone customers, who can register at any of the 47 DiGi centers throughout Malaysia. The service offers issuance of drafts in Bangladesh payable at over 800 locations, which are delivered between 24 to 72 hours. The registration creates a virtual wallet for the customer to load up to Malaysian Ringgit (RM) 5,000 at any one time. The customer can then remit via SMS anytime or over the counter at designated DiGi outlets, subject to a limit of RM 5000 per transaction. The fee for the service starts from RM 8. Customers will also automatically receive free personal accident coverage along with that. Commenting on this product, Rashed Maqsood, Director and Head of Global Transaction Services of Citi Bangladesh, said: "We are the first bank in Bangladesh to pioneer mobile based cross-border remittance to Bangladesh market. Earlier, Citibank launched web-based remittances from US to Bangladesh through remit2home.com. Our culture in the transaction banking business is that of innovation, leadership & partnership."
What I didn't get here is how Citibank is paying out the money sent from Malaysia to the mentioned 800 locations in Bangladesh. To whom these outlets belong to? Also, when someone from Malaysia is sending the SMS, to which number, to whom they are sending the SMS? Is it a Citibank 'hot number', Grameen Phone number, Banglalink number? They also talk about 'issuance of drafts', who generates it, how it is collected and where are those 800 locations? May be its my limited understanding that I cannot grasp the whole picture, anybody reading this post is welcome to enlighten us. Nevertheless, what I understand, its a huge leap forward in the right direction. Human resource is our largest natural source of comparative advantage and remittance injects life into our forex reserve. I wonder what Grameen Phone is thinking in this regard. With their flexiload retail outlets scattered over almost every corner of the country, could they tie up with say BRAC/BRAC Bank to offer some sort of remittance services to rural recipients? BRAC Bank has already strengthened its competitive position through it SME banking division which has an outlet 'almost in every last mile' of Bangladeshi villages, thanks to BRAC's already established MFI network. Now I can only envisage a tie up between GP and BRAC Bank, to facilitate smooth and fraud-free remittance to throw up a challenge in this lucrative market against Citibank, who are doing very well also in other banking markets.