KARACHI: Branchless banking has been rising in Pakistan, and it grew by 23 per cent in the third quarter of the current fiscal year.

The State Bank on Thursday issued a newsletter on branchless banking which says that branchless banking continues to show a rising trend and surged by 23 per cent to 25.3 million as compared with 20.6 million in the preceding quarter.

The value of these transactions was recorded at Rs85 billion, showing a growth of 7 per cent as compared with Rs79 billion in the quarter ended on Dec 31.

The average daily branchless banking transactions increased to 280,798 in the third quarter, showing a growth of 23 per cent as compared to 228,858 transactions in the previous quarter.

The branchless banking deposits grew by 18 per cent to Rs594 million in January-March 2012 quarter as compared with Rs503 million in the preceding quarter.

The total number of branchless banking agents increased by 19 per cent to 26,792 in January-March FY12 quarter as compared with 22,512 in the quarter ended on Dec 31, 2011.

Similarly, the total number of branchless banking accounts surged by 14 per cent to surpass one million mark in the quarter under review as compared with 929,184 in the previous quarter.

The branchless banking agents now have the footprint in 89 pre cent of the total districts in Pakistan, out of which 52 per cent have more than 90 agents which are mainly located in low income urban or rural communities.

The number of registered m-wallet accounts (a popular branchless banking service in which cash value is stored on mobile phone of a customer which can be used for deposits, withdrawals, and money transfer through mobile phone) reached 1.03 million at the end of the quarter under review. The number of active m-wallets is about 53 per cent.

About 5,573 debit cards have also been provided to mobile account holders, indicating efforts to create value proposition in m-wallets.

Branchless banking service providers are trying to increase their linkages with microfinance institutions as loan repayments of Rs312 million were collected through branchless banking agents during the quarter under review.

The growth expectation in the area of branchless banking is fairly high as largest brand of the country is in process of technology upgradation for account opening, for which it would start registration of customers for level zero account (per month transactions limit Rs25,000), which will bring the low income segment of society into financial services loop.

Moreover, few other banks are also likely to start their branchless banking operations soon.

The State Bank has established a consultative group on branchless banking to foster market development under the chairmanship of Mohammad Ashraf Khan, Executive Director, Development Finance Group of SBP.

The group comprises key stakeholders, such as Pakistan Telecommunication Authority (PTA), National Database and Registration Authority (NADRA), banks, microfinance banks (MFBs), Mobile network operators (MNOs) and technology solution providers.

The group provides a common platform for branchless banking eco-system developers and an opportunity to develop collective policy recommendations on critical issues.