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Agent banking comes as a trailblazer in driving financial inclusion in Bangladesh, showing strong business growth, but entrepreneurs feel it is increasingly getting under strain from regulatory and operational challenges.
Starting off over a decade ago to serve unbanked and underbanked segments of the country's population, agent banking has significantly expanded rural banking and remittance services, contributing to progress towards the Sustainable Development Goals (SDGs) set by the United Nations for its member-nations with greater goal of balanced global progress.
It is an innovative banking model operated by scheduled banks, using technology to deliver basic financial services to millions of people, particularly in rural areas of Bangladesh. However, recent developments indicate that network expansion has slowed, even as transaction volumes continue to increase.
More than 25 million agent -banking accounts had been opened by September 2025 through 20,488 outlets operated by 15,321 agents of 30 scheduled banks, according to the central bank's latest statistics. A year earlier, the number stood at over 23 million accounts, served by 21,367 outlets run by 16,011 agents of 31 scheduled banks.
Agent banking continues to grow in Bangladesh, with services currently offered by one state-owned commercial bank, 21 private commercial banks, and eight Islamic banks.
New regulatory measures issued by Bangladesh Bank (BB), along with the suspension of agent- banking operations by state-run Agrani Bank, have led to a decline in both the number of outlets and agents. The central bank has already directed all scheduled banks to maintain 1:1 in outlet opening in expectation of accelerating active participation of women entrepreneurs in this on-spot banking to the bankable unbanked.
In this connection, Bangladesh Bank Governor Dr. Ahsan H Mansur is reported to have said half of all agents under agent-banking services will be women, as part of the government's push to ensure greater financial inclusion for the womenfolk.
Some banks have already taken initiative to encourage women -- particularly in rural areas -- to engage in agent banking by deploying their officials at the grassroots level, according to market insiders.
They also say banks are continuing efforts to increase women's participation in agent banking, although the initiatives have yet to deliver significant results.
On the other hand, Agrani Bank halted its agent- banking operations indefinitely on June 21 last year, officially citing 'unavoidable reasons.' Market operators, however, claim the suspension came after the bank ended its contract with Doer, the technology-and network-management provider for its agent network.
Meanwhile, agent banking is fostering partnerships between banks, technology providers, and the government to create a coordinated approach toward achieving the SDGs. The SDGs consist of 17 goals and 169 targets, outlining both quantitative and qualitative objectives to end poverty, protect the planet, and ensure peace and prosperity for all.
Actually, agent banking is also playing a key role in delivering financial services to rural women, small business owners, and remittance recipients.
A report on state of agent banking, prepared for the July-September 2025 period by the central bank of Bangladesh, shows the loan-to-deposit ratio in the agent-banking system nearly 67 per cent although it was 78.28 per cent on average in traditional banking. In the last quarter, the ratio was 63.61.
"Increase in loan-to-deposit ratio compared to the last quarter indicates that investment through agent outlets is gradually gaining momentum," the central bank said in its latest report on agent banking.
On the other hand, the loan-deposit ratio in rural areas was 51.71 which was 49.32 in the last quarter. This ratio indicates that the rural people are still getting less loan facility against their deposit compared to those in urban areas.
The gradual rise in the loan-to-deposit ratio shows that agent banking is increasingly providing financing for entrepreneurship alongside deposit collection.
Overall, the model is playing a crucial role in delivering financial services to rural women, small business owners, and remittance recipients.
Taking into account the loan-to-deposit ratio and the share of lending to women and entrepreneurs, the central bank has been advising banks to provide CMSME loans, women entrepreneurship loans, and refinance schemes for marginal groups through agent banking.
However, agent banking is playing a key role in bridging branch-network gaps and advancing financial inclusion across the country.
The central bank is closely monitoring the progress and emphasizing disbursing loans to rural people to stimulate the rural economy.
Currently, customers may avail a range of services like deposits, loans, overseas and local remittances, payment services, and receiving government social -safety-net benefits through agent-banking outlets.
However, raising customer awareness about these transactions is essential to minimize potential financial risks.
The central bank introduced agent banking by issuing guidelines on December 9, 2013. Just over a month later, on January 17, 2014, Bank Asia became first bank to launch this novel mode of banking services in the country by opening the 'Joyinsar' outlet at Sirajdikhan in Munshiganj, aiming to reduce social inequality by empowering small- and vulnerable- income groups.
Agent- banking operations are carried out under the central bank's 2017 prudential guidelines, governing agent approval, permissible services, and the obligations of both banks and agents.
The guidelines also cover anti-money laundering and combating the financing of terrorism (AML/CFT), as well as customer protection and business continuity, to ensure the safe and effective expansion of agent banking across Bangladesh.
All scheduled banks have been permitted to operate agent-banking services to boost rural economic activity, offering alternate delivery channel (ADC) services through modern financial technology (FinTech) to people living in remote and hilly areas of Bangladesh.
ADC covers ATMs, point-of-sale (POS) terminals, internet banking, mobile financial services (MFS), and other digital platforms on the money-market annex.
Fintech is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services by way of using smartphones or the internet.
Despite its progress, agent banking continues to face challenges such as infrastructure gaps, low financial literacy, security concerns, operational risks, and limited awareness, which may limit its contribution to financial inclusion.
Addressing these challenges will require a coordinated effort from financial institutions, regulators, and other stakeholders to build a robust, inclusive, and sustainable agent-banking ecosystem in Bangladesh.
Agent banking has emerged as a key channel for financial inclusion in Bangladesh, but changing regulations and market dynamics are reshaping its path. Its future will depend on balancing expansion with regulatory compliance and innovation, while sustaining last-mile access, particularly for women and rural communities.
siddique.islam@gmail.com