Banks, telcos tie up to widen agent banking

Two top mobile operators have entered into a partnership with some leading banks for expediting agent banking in the country under a revenue sharing model, thus giving a boost to financial inclusion.

According to the plan, retailers and distributors of Grameenphone and Robi which are currently serving users of the two operators will also provide service to customers on banking issues and work as the representative of the respective banks.

The arrangement will be running under a revenue sharing model where mobile operators and their agents will share the earnings from the banking service.

Already Robi has signed separate agreements with four top banks, including Bank Asia, the market leader in agent banking. The service is expected to be rolled out within a few days. Md Arfan Ali, president and managing director of Bank Asia Ltd, confirmed the partnership with the mobile operators.

He said the industry needs to collaborate with each other, among government agencies, mobile operators and financial service providers, to help boost the economy.

“To accelerate the financial inclusion, we are trying to bring in new products and this partnership is one of them,” said Ali.

The partnership will bring the unbanked people under the banking network even in the remotest parts of the country and expand the banking network faster than ever, he said.

Through agent banking, Bank Asia disburses loans ranging from Tk 20,000 to Tk 20 lakh and has set a target to increase the loan portfolio to Tk 250 crore by this year.

Initially, Robi will introduce the service in 70 outlets as part of its plans to bring all of over 20,000 of its sponsored outlets under the arrangement within the next few months, said a senior executive of the second largest mobile operator in the country. A dedicated space in an outlet of the mobile phone operators will be allocated to run the agent banking service.

As per plan, the operation will be run by software provided by the banks and the mobile operators will later seek permission from the central bank to run it on mobile applications.

Digitalisation has ushered in a new ground and opportunity for collaboration between the banks and the mobile operators which, Robi believes, would benefit a wider consumer base of the country, said Shahed Alam, executive vice-president and head of regulatory affairs at Robi. 

Traditional banks face challenges to reach out to their customers. The rural customers also have to travel extensively to visit branches. Expanding and operating traditional bank branches are often not so cost-effective.

“Partnership with banks in order to deliver agent banking services will offer conveniences to the consumers and bring more unbanked population under the banking network,” Alam said. “Robi and our partner banks are in discussion and exploring partnership opportunities to bring synergy and consumer benefits.”

The operators said they would not control the banking service and rather their agents will act as a banking representative for this particular operation. The banks have received permission from Bangladesh Bank in this regard. Last week, Grameenphone and Robi applied to Bangladesh Telecommunication Regulatory Commission for consent.

Under the agent banking service, customers can have services such as cash deposits, withdrawals, remittance disbursement, small value loan disbursement and recovery of loans, as well as cash payments under the government's social safety net programmes.

The latest financial indicators of the central bank showed that agent banking is on the right track: deposit collection through the service stood at Tk 2,013 crore in April-June, up 23.19 percent from a quarter ago.

Grameenphone and Robi together have more than 50,000 outlets across the country.