Over Tk 1,000 cr transaction thru 6.0 m accounts
Md Ahsan Ullah: Different professionals, including rural people and expatriate are being involved with agent banking system for its hassle-free service round the clock, said the sources of the Finance Ministry.
However, the concerned authorities are also offering various facilities to the customers that may consider as the key reason of agent banking popularity, they said.
The volume of the transactions performed through agent banking is still not big, as some 68.0 per cent of population in Bangladesh resides in the rural areas and a chunk of it is quite remote, they added.
In fact, agent banking is a limited scale banking and financial service for persons under a valid agency agreement, rather than a teller or cashier, according to them.
The deposited money rose at Tk 9,750 crore in 60 lakh accounts till December 2020, they further said.
According to the latest data of the Bangladesh Bank (BB), the number of accounts with agents increased to 60,35,027 at the end of January this year from 36,13,335 at the end of same month of the preceding year 2019. Deposit collection through agent banking was Tk 9,750croreat the end of December 2020, which was Tk 3,209.4 crore in the previous year.
Among the deposit, Tk 2,997.1 crore was collected in the urban area while Tk 7,753.7 crore collected at rural area. According to a research paper Bangladesh Institute of Bank Management (BIBM), 3 percent of the clients of agent banking are day labourers, 29 percent clients are businessmen at small level, 7 percent are farmers, and 18 percent are housewives.
According to The Global Findex Database, in Bangladesh the percentage of 15-plus people having an account is 50.0 per cent and only 35.0 per cent of them are woman. So, a large portion of the country’s population is still unbanked. To reach them, agent banking will play an important role.
As per Bangladesh Bank agent banking guideline in 2013, an agent, who is a third-party owner of an outlet, conducts banking transactions, such as cash deposit, cash withdrawal, account opening, account inquiries, small-amount loan disbursement, loan recovery, fund transfer and paying bills under the government safety net programmes on behalf of a bank.
A high official of Islami Bank Bangladesh Limited (IBBL) said that the agent banking is moving fast across the country since the banks are providing all sorts of efforts to bring the grassroots people under the banking services.
“Agent banking is providing banking services by engaging representatives under the respective agreement,” he said.
Terming the agent banking a great initiative of the central bank, he said generally a bank needs a number of staff and huge expenditure to operate a branch. “If one bank can run its activities through agents, it will be helpful for both the bank and the customers,” he added.
“Agent banking is increasingly getting popular because it is cost-effective,” said Abul Kashem Mohammad Shirin, managing director of Dutch-Bangla Bank.
Expatriates prefer agent banking to mobile banking as they are not charged for funds withdrawal, said Dasgupta Asim Kumar, an adviser of bKash, the largest mobile financial service provider in Bangladesh.
The central bank launched agent banking in 2013 by giving license to Bank Asia. A total of 21 commercial banks have already taken licenses from Bangladesh Bank while 19 banks are running their activities across the country, according to him.
The commercial 19 banks, which are currently running agent banking activities, are Dutch Bangla Bank, Bank Asia, Al-Arafah Islami Bank, Social Islami Bank, Modhumoti Bank, Mutual Trust Bank, NRB Commercial Bank, Standard Bank, Agrani Bank, First Security Islami Bank, Mid Land Bank, The City Bank, Islami Bank Bangladesh Limited, The Premier Bank, United Commercial Bank Limited, AB Bank, NRB Bank, Brac Bank and Eastern Bank.