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The country's agent-banking transactions witnessed a 12.94-percent decline in September this year compared to the previous month, according to the central bank, indicating a slowdown in economic activity and a cumbered flow of funds.
Besides, the number of transactions decreased by 9.03 per cent in September compared to August.
Other key banking indicators, such as deposit growth, loan disbarment and crucial remittance, all nosedived in September, according to the latest data from the Bangladesh Bank (BB).
With deposit collections hovering at Tk 345.334 billion, September marked a 0.70 per cent decline in deposit growth compared to August's Tk 347.77 billion.
Currently, 31 scheduled banks are offering agent banking facilities to provide a safe alternative channel of banking services for people in rural and remote areas.
Loan disbursement through this alternative banking channel declined by 20.36 per cent in September this year to over Tk 6.71 billion from August's more than Tk 8.43 billion.
In agent banking, the total number of accounts reached 20.68 million in September while the number of accounts up to August was 20.45 million.
But the crucial remittance inflow took a massive 19.02 per cent hit to plummet to over Tk 16.60 billion from August's more than Tk 19.77 billion.
The outstanding balance as of September 2023 is over Tk. 81.24 billion, of which Tk 23.38 billion is in urban and Tk 57.85 billion is in rural areas. The urban-rural outstanding ratio is 1:2.47, which indicates that disbursement is more than twice in rural areas compared to cities.
Micro-credits are disbursed more preferably through agent banking outlets compared to traditional banking systems.
Agent banking services were formally introduced in Bangladesh in 2014, spearheaded by Bank Asia and Agrani Bank. Subsequently, other banks have extended these services to the union level, broadening their accessibility and impact across the country.
Zafar Alam, managing director and CEO of Social Islami Bank Limited, said the ongoing economic challenges might have contributed to the decrease in both transactions and deposits.
He called for curbing informal hundi transactions to boost remittance inflow.
The banker said that due to the current fluctuations in foreign exchange reserves, many individuals might have held the greenback.
According to the central bank data, some 15,539 agents were deployed with 21,448 outlets in September, while it was 15,671 agents were deployed with 21,559 outlets in August.
In September, there were 2,485 agents operating in urban areas and 13,054 agents in rural areas. This marked a decrease from August when there were 2,465 agents in urban areas and 13,206 agents in rural areas.
In September, agent banking services facilitated the payment of electricity, gas, and water bills amounting to Tk 1.18 billion, compared to Tk 1.36 billion in August.
It is observed that agent Banking business is higher in Dhaka and Chattogram divisions than in other divisions.