Comprehensive guideline on agent banking

The central bank has formed a committee to prepare a comprehensive guideline to make the agent banking service easier. A  comprehensive guideline is needed urgently as there are risks to agent banking such as choosing the right agent and liquidity management in remote areas.

The Bangladesh Bank (BB) decided to promote this complimentary channel to reach the poor segment of the society as well as existing bank customers with a range of financial services, especially to geographically dispersed locations. It had issued the agent banking guideline in 2013 but it was not until last year that banks rolled out their full-fledged operations.

The growing popularity of agent banking, a new form of banking service aimed at those living in remote areas across the country reflects the public interest on availing of financial services at doorsteps. About 0.3 million agent banking accounts were opened in the first half of the year -- an increase of 60.18 per cent. The visible popularity of such banking services paved the way for some banks for giving higher priority to developing their agent banking infrastructure than to building their mobile banking platform. At the end of June, the total number of agent banking accounts stood at 0.87 million, in contrast to 0.54 million at the end of December last year, according to data from the BB.

This channel is increasingly becoming the medium of choice for migrant workers to send money home because there is no additional fee to withdraw money from accounts. In contrast, there is a 2.0 per cent charge for taking money out from mobile banking accounts.

Between the months of January and June, Tk 8.9 billion of remittance was sent, which is almost treble that in the preceding six months.Subsequently, banks are fast buying into this concept.

In the first six months of 2017, seven banks have signed up for agent banking licence to take the tally to 17. Of the 17 banks, 12 are already running their own agent banking operations, with one in the process of rolling out their service.

The banks that are providing agent   banking services are: Dutch-Bangla, Bank Asia, Al-Arafah Islami, Social Islami, Modhumoti, Mutual Trust, NRB Commercial, Standard Bank, Agrani Bank, Midland Bank, First Security Islami Bank and City Bank.

Of them, Dutch-Bangla is the market leader with its 1,454 agent outlets and 0.57 million agent banking accounts. It is followed by Bank Asia, which has 1,238 agent outlets and about 0.2 million agent banking accounts.

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