Agent Banking: its functions and present scenario in Bangladesh
Agent Banking provides basic banking services to people in Bangladesh. Though at the initiation of the agent banking, it was thought that agent banking will provide banking services to remote areas people of the country; currently the agent banking services expended to nationwide, both in urban and rural areas, specially where branch or sub-branch of a bank is not available. After agreement with the respective bank and approval from Bangladesh Bank, following Bangladesh Bank guidelines and respective bank's policy, an agent outlet is opened and the agent owner has to manage, with the support of the approval bank, most of the things at its own arrangement and cost. For providing the banking services of a bank, the agent owner gets commission as per policy of the approval bank.
An agent banking outlet provides different types of banking services to clients among them the common services are - Opening Bank Accounts, Cash deposit and withdrawal, Fund Transfer, Fund Transfer through EFT and RTGS, Foreign Remittance Payment, Utility Bills Payment, Loan/Investment Disbursement and Recovery, Cheque Book Issue, Debit Card Issue, Payment though POS, Receiving of Clearing Cheque, Payment through QR Code, Balance and Statement Check of Account, and Bangladesh approved any services. Most of the banking functions are done through customer's thumb impression; generally, no cheque is used for transaction purpose.
The agent banking function started in Bangladesh in 2013. Currently, 31 (thirty one) commercial banks started its agent banking operations in Bangladesh. According source of Bangladesh Bank, as of December 2022, Bank Asia has the highest agents as it has opened 5,305 agent outlets following Islami Bank Bangladesh Ltd opened 2,694 agent outlets; DBBL 1,072, Brac 910, City Bank 678, NRBC 575, and Madhumoti Bank opened 554 agent outlets. In 2022, more than tk 673,069 crore transactions occurred through agent banking accounts. According to Bangladesh Bank data, as of September 2022, a total of 20,177 outlets operated in the country among them about 86 per cent outlets are located in rural areas and rests are in the urban regions.
According to Bangladesh Bank data, since inauguration of agent banking operation to at the end of September 2022, remittance received through agent banking channel is more than Tk1 lakh crore in Bangladesh and the deposit stood at Tk 30,325 crore at the end of September 2022. Number of accounts reached to more than 16.5 million in the agent banking outlets.
Agent banking creates huge job opportunities in the country. It plays vital role to bring people under financial services broadly in rural areas. Therefore, agent banking is now an important channel to provide banking services to the people in Bangladesh.
However, AML/CFT related issues should carefully check and monitor in the agent outlet transaction and should follow BFIU circulars and guidelines while providing banking services to customers and at its banking operations. And also need to ensure the safety and security of customer information and their deposit; and eliminate fraud and forgery so that customer's trust and confidence may keep at highest level. Agent baking's contribution in Bangladesh economy and banking sector is undoubtedly remarkable.
Published Date: 14/07/2023