The central bank has introduced agent banking aiming to provide banking and financial services on a limited scale to the underserved population.
Agent banking is a new concept in Bangladesh, but practiced globally as an important distribution channel for financial inclusion through agents of the banks.
With prior approval from the central bank and agreements with a commercial bank, organisations ranging from NGOs to retail shops can perform banking transactions on behalf of the bank, without charging the customers.
Bangladesh Bank on Monday issued a guideline on agent banking to all commercial banks.
“Bangladesh Bank has decided to promote this complimentary channel to reach out to the poor segments of society as well as existing bank customers with a range of financial services, especially to geographically dispersed locations,” the central bank said.
Through agent banking, cash deposits can be collected in addition to cash withdrawal and fund transfers. However, the ceiling will be determined and revised by BB from time to time.
Other activities of agent banking will be inward foreign remittance disbursement, small value loan disbursement, recovery of loans and instalments, utility bill payment, cash payment under social safety net programmes, among other regular banking activities.
However, banking agents will not be allowed to give final approval on new bank account opening, issue bank cards/cheques, loan or financial appraisal, cheque encashment and dealing in foreign currency.
“It is not possible to open a bank branch in remote areas such as chars. Agent banking has been introduced to provide banking services in those areas,” said Mahfuzur Rahman, executive director of the central bank.
Those who can be eligible for agents are: nongovernmental organisations, micro-finance institutions, cooperative societies, post offices, courier and mailing service companies, agents of mobile network operators, offices of rural and urban local government institutions, union information and service centres, educated individuals capable of handling IT based financial services, agents of insurance companies, owners of pharmacies, chain shops and petrol pumps or gas stations.
Customers will not be charged directly by the agents for providing services.
Bank will pay reasonable fees or commissions to their agents. However, banks may charge commissions or fees or charges applicable to its customers.
The currency of transactions will only be the taka, according to the guideline.