Esquire Goes Cashless: ZERO Cash Transaction Policy

The journey from cash to the bank based wage payments in Bangladesh’s garment sector is gathering pace as garment production factories discover how digitizing wages can save time, reduce costs, increase transparency and empower workers by improving their access to finance. Side by side, digital wage payment has also yielded a range of benefits for both employers and employees, including increased transparency, providing added potential to assist with audits and supply chain accountability, ensuring the accuracy of workers’ payments and reducing the risk of loss or theft of wages for workers, increased financial inclusion as well as greater ability to save, particularly for women workers. Progressive changes are happening in the wage payment system for Ready-Made Garments (RMG) workers in Bangladesh. Now workers, especially women, are gradually becoming more empowered to deal with their earnings by themselves because of digitized wage payments through bank transactions. Studies show that when women have ownership of their own accounts, they have more control over their finances and more influence over household spending.

On one hand, this form of digitized wage payment system benefits the company as it avoids the security risk and expenses of transporting large amounts of cash from the bank for wage payment every month; and on the other hand, it also brings transparency and accountability, especially in regards to compliance monitoring in the wage payment practices in the RMG sector of Bangladesh.

Since this concept was new in Bangladesh, initially it was a bit difficult for some factories to implement this due to lack of experience. In addition, at the beginning, the workers, who have no literacy or less literacy, were not comfortable with how to use this technology. It was also a bit difficult for the factories to make the devices available to all employees and workers. The factories felt the necessity of providing training on security measures, such as not sharing the PIN with others and wrong transfer etc.

The Initiatives

One such example is Abanti Colour Tex Ltd., one of the members of the Partnership for Sustainable Textile, which currently makes wage payment for around 8,000 workers through the Dutch Bangla Bank. They open bank account for each individual worker within ten to fifteen days of joining without any cost. ATM card is also provided to the workers within the next seven working days. There is a Fast Track ATM booth installed in the factory premise for an easy transaction by the workers 24/7. Workers can make transaction at any time and from anywhere as per their convenience.

Esquire Group this year has successfully implemented a Zero Cash transaction policy. They have been making all of their wages and overtime payments for a 7,000 people workforce through Dutch Bangla Bank since 2018. According to the agreement with the bank, every week bank representatives go to the factory with bank services for the workers. When a worker joins, factory helps the worker to open a bank account within three working days. The workers make all of their transactions through an ATM booth which the factory has inside their premises. Esquire Group also encourages their workers to gear up their monthly savings.

In this regard, they have made an agreement with the bank for BDT 500 monthly saving schemes for the workers. The factory and the workforce do not need to pay any service charge to the bank for their services. Similarly, Genesis Washing Ltd. and Genesis Fashion Ltd. under M and J Group make their salary payments through Mobile Banking (Rocket Bank) for their 3,000 workers via Dutch Bangla Bank.


The Success

According to a study released by the United Nations’ Better than Cash Alliance in 2017,  the average garment factories in Bangladesh follow cash payroll which causes production-loss of 750 hours and administrative time-loss of 542 hours per month just in the counting and disbursement of cash wages. For factories which have moved to digital wage payment from the traditional forms of payment, the overall time required to disburse wages reduced by between 32 per cent and 80 per cent for every worker per month. In general, production losses were significantly reduced, due to workers spending less time away from the production line or employers requiring workers to withdraw wages outside working hours. These factories also registered high levels of employee satisfaction about the shift.

Digitized wage payment also ensures security of wages for the workers from any kind of loss or theft and saves revenue stamp costs from their salaries. The most important thing is that, it creates opportunity for workers to save their money in a secured manner as well as receive other banking services as applicable.

It is a common practice for many workers to be deceived by fake micro credit or cooperative agencies in their localities, but in the banking system, workers can safely deposit their money and get access to secure financial products such as Deposit Pension Scheme (DPS) savings arrangements. In addition, it has easy payment options such as mobile Banking to send money to their villages. As a result, workers are very happy to use it.

Progressively, many leading RMG factories are joining in this practice of wage payment through formalising

workers under a corporate banking system. This also creates banking opportunities for workers – who come from low income groups – a customer segment that the traditional banking system generally does not cater to.

Lessons learned

If workers get trained properly, they can overcome technical issues and adapt to technology rapidly.




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