Mobile banking leading country to a ‘cashless society’
Md Joynal Abedin KhaN: The Agent Banking Service (ABS), popularly known as ‘mobile banking’ has gained popularity among the grassroots people across the country.
The purpose of introducing ABS is to provide a safe and secured alternative delivery channel for banking services to the under-privileged, under-served population, who generally live in a geographically remote location and beyond the reach of the traditional banking network, Finance Ministry sources said.
The deposit growth in the agent banking accounts was mainly because of expansion of the service in the grassroot rural areas where people are deprived of banking service. Availability of mobile phones and internet facilities in rural areas has made it easier for the ABS account holders, BB officials said.
Central Bank launched agent banking in 2013 by giving license to Bank Asia. A total of 28 commercial banks have already taken licenses from Bangladesh Bank while 23 banks are running their activities across the country. As of September, the number of agents increased by 82.02 per cent comparing a year ago. Also the number of agent bank outlets also increased to 11,550 from 7,278 in the same period, they added.
According to the latest data of BB, the number of accounts with agents increased to 73,58,190 till September this year while 26,13,335 was at the end of January 2019, according to them.
The agent banking operators offer several services such as inward remittance, money transfers, different deposit schemes, and payment of utility service bills, experts said. The ABS is providing all sorts of banking services except encashment of cheque by the client and strictly dealing of foreign currency. However, recently some banks are providing Points of Sale (POS) machine in the ABS to withdraw the money instead of cheque, they said.
Biometric digital finger print is the key point of security of the ABS and it is very essential for withdrawal of money.
ABS account holders can easily accept the ATM/VISA card to use in the ATM booth in convenient places and they can also use the same for various payments against purchasing goods and services where the POS is available, they added.
Clients are allowed to have deposits and withdraw cash through the outlets operated by agents without visiting a bank branch. Nowadays, many services are available at rural level, whereas people had to go to towns, earlier, for these purposes, they said.
According to the BB data, deposit mobilisation by the banks through their agent banking operations has increased to Tk 10,220.21 crore as of June this year, up by 19.74 per cent from Tk 8,535.04 crore three months ago, according to the Bangladesh Bank’s quarterly report on agent banking.
According to a research paper titled, “Alternative delivery channel: Opportunities and challenges of the new banking environment” by Bangladesh Institute of Bank Management (BIBM), agent banking has become popular because of its benefits for both the banks and clients, while the country’s economy is also being benefited through financial inclusion.
According to the paper, the banks have been able to increase customer volume, improve financial appearance, lower operating costs, expansion of business, increase deposit collection, improve banks’ branding and widen their spreads.
According to a study of 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.
ABS is much better than mobile banking services but presently most of the unbanked peoples are confused about agent banking and some of them consider it as like some NGO or multipurpose co-operative society working in grassroots level. ABS is a new concept in banking industry but have a big challenge and also a high potentiality.
NRB Global Bank Managing Director Syed Habib Hasnat said “Some 28 banks have received the agent banking licences as they allow to reach the customers’ doorsteps at lower expenses.’
Agent banking plays a vital role in reaching the unbanked people, he said, adding that the inclusion of those unbaked people could play a vital role in increasing the circulation of money.
‘The rising trend of agent banking services amid the coronavirus pandemic signifies the huge opportunity to bring the mass rural unbanked people under the umbrella of formal banking services,’ he said.
“Agent banking is growing robustly owing to its cost-effectiveness and availability. Beside deposit collection, lending through agent banking also are increasing, which is good for rural economy,” said Md Arfan Ali, Managing Director of Bank Asia.
Md Sirajul Islam, Bangladesh Bank Executive Director and spokesperson, said “Banks are spreading in remote areas of the country through inclusive banking services including mobile banking, agent banking and sub-branches. As a result, the economy of Bangladesh is gradually being transformed into a cashless society.”