Agent banking transactions see robust growth
Funds transacted through agent banking accounts rose 14.3 per cent year-on-year to Tk 32,523 crore in July as more and more people are joining the financial system using the new window, Bangladesh Bank data showed.
This is compared to Tk 28,454 crore in July last year.
Since 2013, the central bank has awarded 28 agent banking licences with the aim to provide a secure alternative delivery channel of banking services to the underprivileged and under-served population who live in remote locations.
Agent banking accounts totaled 1.24 crore at the end of July, up about 62 per cent from 76.86 lakh in the same month a year ago.
The number of agents across the country stood at 13,086 at the end of July, which was 9,180 in the same month last year. Agent banking outlets rose to 17,332 from 12,861 during the period.
In July, 66.42 lakh males had agent banking accounts, up 60 per cent from 41.62 lakh, year-on-year. Female customers owned 52.66 lakh accounts, which was 33.7 lakh in the same month last year, an increase of 56.26 per cent, according data from the central bank.
In Bangladesh, 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.
Apart from offering basic banking services such as cash deposits, cash withdrawals, and receipt of remittances, banks have started disbursing loans through their agents.
"Agent banking is another factor that is contributing to total deposit growth," said the central bank in a report.
The deposit balance was Tk 20,671 crore as of July, doubling from Tk 10,788 crore in the same month in 2020.
Banks disbursed Tk 109.9 crore in loans through the agent banking system, up from Tk 94.9 crore in the same period last year.
Utility bills amounting to Tk 88.9 crore were paid through agent banking accounts in July. It is, however, down from Tk 93.7 crore in July last year. Remittance to the tune of Tk 1,949 crore was channelled to the beneficiaries, a decrease of 41.42 per cent from Tk 3,327 crore a year ago, central bank data showed.
Twenty-four banks have rolled out the service as of September last year.
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 are among the lenders with a significant presence in the agent banking segment.
Transactions through agent banking more than doubled to Tk 393,932 crore in the last fiscal year. Md Arfan Ali, managing director of Bank Asia, which pioneered agent banking in Bangladesh, has high hopes about the new window.
"Agent banking will work as an effective channel to disburse loans in the long run. Now, our employees provide banking services. But in the future, the agents will provide all the services on behalf of banks."
According to the noted banker, agent banking had already expanded the footprint of banks.
"Its growing use will bring down the cost of services. As a result, people will get loans at lower interest rates and other services at lower costs," Ali said.