Agent banking going places
Transactions through agent banking more than doubled to Tk 393,932 crore in the last fiscal year as the new window has taken financial services to the doorsteps of people.
The volume rose 106 per cent in FY2020-21, data from the Bangladesh Bank showed, against Tk 191,225 crore in the previous fiscal year.
In June, transactions surged 75 per cent to Tk 38,672 crore, the highest on record. It stood at Tk 22,057 crore in June last year.
The volume of deposits was Tk 20,179 crore as of June, doubling from Tk 10,117 crore in the same month last year.
The central bank has awarded 28 agent banking licences since 2013.
The aim is to provide a secure alternative delivery channel of banking services to the underprivileged, under-served population who live in remote locations that are beyond the reach of the traditional banking network.
Twenty-four banks have rolled out the service as of September last year.
The banks with a notable presence include Bank Asia, Islami Bank Bangladesh Ltd, Dutch-Bangla Bank Ltd, Brac Bank, City Bank, Mutual Trust Bank, Al-Arafah Islami Bank, Agrani Bank, NRB Commercial Bank, and Modhumoti Bank.
Loan disbursement through the agent banking window rose 444 per cent to Tk 2,659 crore in FY21, which was Tk 488 crore in FY20.
Transfer of incoming foreign remittance rose 112 per cent to Tk 27,524 crore in the last fiscal year.
In Bangladesh, agent banking accounts totalled 1.22 crore at the end of FY21, up 65 per cent compared to 73.57 lakh at the end of FY20.
Male customers owned 65.98 lakh accounts and female clients 51.54 lakh accounts.
There were 12,995 agents at the end of June, up from 8,812 agents a year ago, an increase of 47.5 per cent, BB data showed. The number of outlets stood at 17,215.
Expert and bankers say agent banking has emerged as an alternative to the branch-based banking model in the areas where setting up full-fledged offices is not commercially viable because of lower business volume.
The window is allowing banks to mobilise deposits at lower costs, he said.
Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said a significant portion of remittance was channelled through agent banking during the pandemic.
"This has given a boost to the transaction volume."
Agent banking is helping banks expand their reach in remote areas, he said.
"It costs a lot if we set up a full-fledged branch in remote areas in keeping with our standard. But agents are helping us expand the footprint and bring the costs down."
Agent banking is already playing a crucial role in accelerating financial inclusion in Bangladesh, said Zahid Hussain, an economist.
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