The deposits of branchless banking decreased sharply by 38 percent during the July-Sep 2016 quarter mainly due to seasonal outflow. According to State Bank of Pakistan (SBP), Branchless Banking (BB) deposits stood at Rs 8.5 billion at the end of September 2016 down from Rs 13.7 billion at the end of June 2016, showing a decrease of 38 percent compared to previous quarter. The high reduction in deposits was also due to seasonal outflow related to Eid festivities falling in the month of September 2016.
The average deposits per account also dropped to Rs 500 during July-Sep 2016 quarter compared to Rs 942 over the previous quarter, mainly due to sharp increase in the number of accounts.
"Considerable effort is required from all players to tap into the potential customers and venturing in other market segments for raising deposits," SBP suggested in its Branchless Banking Newsletter issued Friday. During the period under review, the average size of transaction grew by 3.2 percent during the quarter, however, the growth was slower in BB transactions. The number of BB transactions decreased to 110.0 million (in volume) and Rs 519.8 billion (in value), showing a decrease of 7.4 percent and 4.4 percent, respectively over the previous quarter. The major decline in the number of transactions was seen in Over the Counter (OTC) transactions, due to delay in bulk Government to Person (G2P) payments.
As the delayed payment of Benazir Income Support Programme (BISP) tranche, resulting in Person to Person fund transfer decreased by 1.7 million, G2P through card 3.1 million and cash withdrawal through card by 3 million in terms of volume. Further, the values in the same heads were also decreased by Rs 13 billion, Rs 6 billion and Rs 3.6 billion, respectively. However, the situation is expected to improve in the subsequent quarters.
The overall BB accounts rose by 16 percent compared to previous quarter. The number of BB accounts increased in all provinces ranging between 8 percent-19 percent except a 36 percent fall in G-B province. During the quarter under review, 2.4 million new accounts were opened, taking the total number of BB accounts to 16.9 million. BB accounts are gradually being accepted and have shown growth of 124 percent since Mar 2015 to the quarter under review.
The SBP said that all BB players need to focus on more value-added services in their products offerings to maximise digital financial services. The BB players also need to increase their account portfolio in those geographies where basic banking infrastructures are not available, it added.
The SBP observed that 66 percent BB deposits of Easypaisa and 30 percent BB deposits of UBL Omni have been withdrawn during the quarter. The Easypaisa, Jazzcash and Omni have a market share of 96 percent in overall BB deposits, while Easypaisa and Jazzcash have 83 percent in the overall BB accounts of the industry.
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