Agent banking boosting rural economy

Anisul Islam Noor

17 September, 2019 12:00 AM printer

-   Women lead in new account opening -
-   Tk 52.64bn deposited in 3.4m agent banking accounts -
-   Tk 92.49bn remittance handled -
-   Tk 2.37bn loans disbursed -


Since the introduction of agent banking the rural economy saw a boost due to the growth in bank deposits and spiraling economic activities in the countryside.

Bank Asia is seen as the pioneer in the country’s agent banking system as the financial institution not only helped strengthen the rural economy, but also made bank products popular which saw a rise in deposits instead of stashing cash in the homes of the rural masses.

Rural people do not take bank loans as much as the urban depositors do, so the bank has been investing the money in productive sectors to ensure optimum utilisation of the deposits and in turn contributing in strengthening the national economy.

Economic analysts said agent banking was bringing the rural community under the banking umbrella to accelerate financial inclusion, which was earlier mainly driven by the non-governmental orgsanisations (NGO).

Bangladesh Bank spokesperson and executive director Sirajul Islam told the Daily Sun that anybody in the remote areas can make transactions through agent banking at any time.

 “Agent banking is also cost-effective, safe and secure,” he added.

Agent banking service already prides of having 3.4 million customers till June this year with the amount of deposit reaching Tk 52.64 billion so far.

According to the central Bangladesh Bank data, commercial banks were providing agent banking service through 8,671 outlets across the country.

Banking activities are also taking place in schools, local bazaar and agro-product business hubs, which are attracting the people who were remained out of mainstream banking services.

Besides, the allowance under the social protection schemes is also easily available in villages through agent banking services. Many banks are also expanding such services to the union level under the a2i project of the Prime Minister’s Office (PMO).

The women are ahead of men in both opening accounts and depositing money in the agent banking system, a report released by Bangladesh Bank said.

Over the last three months (April to June 2019), the volume of deposits by women increased by 60 per cent while the same by men soared by 34.75 per cent. Similarly, account opening by women grew by 20.36 per cent while men’s account opening increased by 16.33 per cent under agent banking system, the central bank sources said.

Inward remittance is also reaching out to the beneficiaries in rural areas thanks to the agent banking services. Offering this service also safeguards the banks from liquidity crisis.

According to BB data, Dutch Bangla Bank is the top agent banking service provider. The bank has more than 1.5 million clients under the agent banking service. Bank Asia holds the second position in agent banking. It has 1.64 million customers. Islami Bank Bangladesh Ltd launched the service recently and currently serving 2.30 lakh agent banking customers.

Managing Director and CEO of Dutch-Bangla Bank Abul Kashem Md. Shirin said mainstream banking was being facilitated through agent banking services.

 The account opening ratio of agent banking was five times higher in rural areas than urban though the service has remained in both areas, he said.

According to a BB report, Bank Asia has the highest number of agents and outlets. The bank has 2,960 outlets, Dutch Bangla Bank has 2953 and NRB Commercial Bank has a total of 499 outlets.

Under the agent banking system, Al-Arafah Islamic Bank received the highest amount of deposits, followed by Dutch Bangla, Bank Asia and Islamic Bank.

Meanwhile, seven banks distributed loans worth Tk 2.37 billion through agent banking. Bank Asia alone distributed disbursed Tk 2.1 billion followed by City Bank’s Tk 150 million.

According to a report of Bangladesh Bank, remittance of Tk 92.49 billion was handled through agent banking till June 30 this year. Of this, Dutch Bangla received Tk 30.5 billion, Bank Asia Tk 2.7 billion, Al-Arafah Islami Bank Tk 13.7 billion and Islami Bank Bangladesh Ltd Tk 11.1 billion.

The Bangladesh Bank introduced agent banking 2013, giving the first license to Bank Asia. So far 21 commercial banks received the license from the central bank to operate agent banking. Of those banks, 19 banks are operating agent banking network across the country.

These banks are -Bank Asia, Dutch Bangla Bank, Al-Arafah Islamic Bank, Social Islamic Bank, Madhumati Bank, Mutual Trust Bank, NRB Commercial Bank, Standard Bank, Agrani Bank, First Security Islamic Bank , Midland Bank, City Bank, Islami Bank Bangladesh Limited, Premier Bank, United Commercial Bank Limited, AB Bank, NRB Bank, BRAC Bank and Eastern Bank.