Agent banking has become a blessing for the country's economy, playing a key role during the Covid-19 pandemic while making a significant contribution to the rural economy over the past few years.
Agent banking has so far been instrumental in bringing underserved and unbanked rural people under banking services, market analysts said.
Thus, the easy and convenient mode of money transaction has been playing a crucial role to ensure the economic growth sustainable by expanding financial inclusion, they added.
Because of its hassle-free services at minimum costs, agent banking has become popular among the people, especially Bangladeshi expatriates, who can send their money home even in remote areas, they mentioned.
Agent banking refers to providing financial services to the underserved population across the country, especially in remote areas through engaging agents who conduct banking transactions on behalf of the bank.
It conducts banking transactions such as cash deposit, cash withdrawal, account opening, account inquiries, remittance disbursement, small-amount loan disbursement, loan recovery, fund transfer, and allowance disbursement under the government safety net programmes.
Md Sirajul Islam, Bangladesh Bank Executive Director and spokesperson, said the coverage of banking services in the country has increased by formulating policies and utilizing technology.
He said banks are spreading in remote areas of the country through inclusive banking services including mobile banking, agent banking and sub-branches.
At the same time, banks have placed great emphasis on technological advancement, he mentioned.
As a result, the economy of Bangladesh is gradually being transformed into a 'cashless' society.
Sirajul said, “We have benefited from technological advancement in the banking sector in the Corona epidemic.”
Customers have been getting uninterrupted banking facilities for six months during the crisis, he said adding, customers have been able to avail the service without going to the bank during the shutdown.
Dr Atiur Rahman, former governor of Bangladesh Bank, said, “About the change in banking services in a decade, technology was modernized in the country's banking sector from the idea of Digital Bangladesh.”
The implementation of the World Bank-funded Central Bank Strengthening Project (CBSP) created a platform for digital banking, he added.
Standing on it, we launched Mobile Financial Services in 2011, he said adding, the initiative was taken to put mobile phones in everyone's hands.
As a result of the introduction of agent banking, banking services have reached remote areas of the country, he mentioned.
At the time, the investment made in the development of technology played a role in keeping the banking system of the country normal in the Corona epidemic, he informed.
In the future, the banking system needs to be enriched with more modern technology, he said.
Agent banking services have played a role in delivering banking services to remote areas of the country.
This service was launched in 2013 with the approval of Bangladesh Bank.
The service has gained huge popularity in seven years.
As of June, 28 banking agents in the country have received approval from the central bank to launch banking services.
The number of accounts in agent banking has increased by 115 percent in the last one year.
At the end of June, a total of 73,58,190 customers opened bank accounts through agents.
Md Arfan Ali, MD and CEO of Bank Asia told Bangladesh Post that agent banking has been able to provide fruitful solutions to financial inclusion by leveraging on the low-cost operation for agent banking.
The amount of money needed to open an agent banking account is very nominal, Ali said, adding that as a business model, it is viable for the commercial banks.
He said, “The agent banking service will create new employment and contribute significantly to uplift the rural economy.”
This service is aimed at bringing the unbanked people under the formal financial umbrella, he said, adding that agent banking will play a facilitating role in bringing a large portion of the population, presently out of formal banking services, into this inclusive banking model.
“I hope this new distribution channel will equally be successful like one of SME loans and mobile financial services by penetrating deep into rural economy,” Ali said.
