Cash Working Group in Cox’s Bazar, Bangladesh; Addressing customer due diligence obligations to promote Rohingya financial inclusion
Cash based interventions (CBI) in the Rohingya Crisis Response have the potential to strengthen sector and multi-sector strategies to respond to the emergency needs of the refugee and host population. It is acknowledged that CBI allows beneficiaries a wider and more dignified choice of assistance, based on their preferences, It can better support local markets and enhance communities’ economic recovery, preparedness and resilience. The effective and appropriate use of cash and voucher programming require strong inter and intra agency coordination and communication with several stakeholders from different sectors, working groups and private sector engagement. CBI specifically requires working in close collaboration with local authorities to ensure an enabling environment suitable for CBI, promotes a “do no harm” approach, and ensure protection mainstreaming.
The Cox Bazar Cash Working Group (CWG) was activated in November 2017 to provide a technical platform for collaboration, harmonisation of appropriate and efficient cash and voucher programming and dissemination of learnings across multiple sectors within the Rohingya Crisis Response. Cox Bazar CWG is supported by the National Cash Working Group (NCWG) that was formed to strengthen collaboration on CBI both for disaster preparedness and response across Bangladesh. In many global emergencies, CBI has been delivered through digital mechanisms, such as bank cards and mobile money, often preferred over vouchers and direct cash delivery. CBI operations rely on private sector financial and mobile cash transfer innovations and capabilities to enable provision of digital transfers. This can ensure transparency and increased controls, promote accountability, be more cost-effective/efficient for larger-scale programmes and can also facilitate access to financial services among recipients. In refugee contexts, however, CBI delivery through digital systems can be challenging and is conditional upon satisfying Know Your Customer (KYC) and customer due diligence requirements often established at a national level. In many cases, refugees are unable to satisfy KYC requirements either due to their status or because they do not have the required documentation. This is currently the case for the Rohingya refugee population residing in Bangladesh.
This report, therefore, seeks to demonstrate that viable solutions exist for meeting national regulations in the context of Bangladesh, and outlines successful examples in different refugee contexts whereby alternative KYC approaches have been established for refugees successfully. It further demonstrates that by identifying and assessing the risks and concerns around money laundering and financing of terrorism (ML/FT) in relation to the Rohingya population in Bangladesh, many of these perceived ‘risks’ can be managed and mitigated through customising the policies of financial service providers (FSP). The report finally highlights recommendations for the Bangladesh authorities and FSPs in relation to enabling access to financial services for the Rohingya population.
Cash Based Interventions
Cash-based interventions (CBIs) have the potential to make the response cost-efficient, scalable and generally have the most widespread benefits for local economies. According to the delivery mechanism mapping1 , a number of potential options, including digital solutions are available to deliver cash transfers at different scales in Cox’s Bazaar.
Financial inclusion for the Rohingya population is critical to improving service delivery and can make cash and market-based programming cost efficient while helping to minimise non-regulated services linked to a shadow economy.