Transaction limit raised for agent banking

Bangladesh Bank has bumped up the daily cash deposit limit for agent banking accounts to Tk 6 lakh from Tk 1 lakh with the view to promoting banking services across the country.

The change was made in the new guideline for agent banking operations, which was issued on Monday.

Agent banking is a system of providing banking and financial services on a limited scale to the underserved population of Bangladesh by way of agents under an agreement rather than a teller.

The central bank has decided to promote this complimentary channel to reach out to the unbanked and underserved segments of the society as well as existing bank customers with a range of banking services, especially to geographically dispersed locations.

In the new guideline, the cash withdrawal limit for business accounts has been set at Tk 5 lakh and fund transfer limit Tk 15 lakh.

The minimum capital of agents must be Tk 2 lakh and that an agent cannot enter into contract with more than one bank.

Moreover, defaulters, bankrupts, convicts or anyone being investigated on criminal charges cannot provide agent banking service.

“This will accelerate agent banking operations across the country,” said Arfan Ali, president and managing director of Bank Asia.

He said the guideline has set criteria for the agents, helping banks shape the service.     But Abul Kashem Md Shirin, managing director of Dutch-Bangla Bank, the market leader in agent banking, said the new guideline will raise the cost of agents as they will have to comply with various security measures.

The agent banking activities are limited to 13 kinds of services.

They are: cash deposit and cash withdrawal; inward foreign remittance disbursement; disbursement and repayment of loans; bill collection; payment of insurance premium, retirement and social benefits, and of salaries; fund transfer; balance enquiry; generation of mini bank statements; collection of loan application forms, credit and debit card applications; monitoring and recovery of loans and advances sanctioned by the bank.

About 3.3 lakh agent banking accounts were opened in the first half of the year, an increase of over 60 percent from the preceding six months, thanks to the growing popularity of this new form of banking services aimed at those living in remote areas.

At the end of June, the number of agent banking accounts stood at 8.73 lakh in contrast to 5.45 lakh at the end of December last year, according to data from the BB.

Seven banks got agent banking licence in the first six months this year, taking the tally to 17.

Of them, 12 are already running agent banking operations and one is in the process of rolling out the service.

The 12 are: Dutch-Bangla, Bank Asia, Al-Arafah Islami, Social Islami, Modhumoti, Mutual Trust, NRB Commercial, Standard, Agrani, Midland, First Security Islami, and City.

Dutch-Bangla Bank has the highest tally of agents and accounts: 1,454 and 5.75 lakh respectively. It is followed by Bank Asia, which has 1,238 agent outlets and about two lakh agent banking accounts.