Mir Mahmudul Haque Chowdhury :
Agent banking is the form of banking that includes limited scale of banking and financial service through persons or agent under a valid agency agreement across the country, specially in remote areas. An agent is a third party owner of an outlet who conducts banking transactions such as cash deposit, cash withdrawls, account opening, account inquiries, small amount loan disbursement, loan recovery, fund transfer, and paying bills under the government safety net programs on behalf of a bank.
The idea of agent banking has come from several developing countries in the different locations of the world like Brazil, Columbia, Peru, Malaysia, Kenya, India, Pakistan, Philipines and so on. Among the countries, Brazil is recognized as a pioneer of agent banking. In Bangladesh, The full-fleged agent banking operations started in 2016. It is started off with 10 banks and now 17 commercial banks operates agent banking activities, while 20 commercial banks have taken the licenses of agent banking from Bangladesh Bank. Agent banking is operated in our country according to Bangladesh Bank agent banking guideline 2013.
Agent banking became popular at the very beginning of operation of the business. Record shows that 5,44,536 accounts was opened with initial deposit of Tk. 380.68 crore at the first quarter of operation of business in October-December,2016. This service of banks was cordially accepted by the people and most of the cases these people were unbanked. This number of accounts and deposits are more than doubled by one year which is exhibits in Bangladesh Bank data. The number of accounts reached to 12,14,367 with deposits of Tk. 1399.39 crore at the end of Dec,2017 quarters. At the end of June 2018, the agent banking deposit come at Tk. 2012.77 crore where number of accounts also gets at 17,77,400.
A large portion of the total population of our country is still out of banking services. Agent banking has been introduces to bring them under banking service. It has facilitated customers by providing all banking services at their doorsteps in the remote area. The bank have been able to increase customer volume, improve financial appearance, lower operating costs, expansion of business, increase deposit collection etc, overall improve banks branding and widen the network of the bank to rural community of the country.
Agent banking gaining its popularity for being simple in nature to the clint and cost effectiveness for the bank. It is benefited for both banks and clients which helps its rapid growth of popularity. Agent banking also creates a height of familiarity to the Bangladeshis living abroad because of its easy availability, convenient and cost concise nature. It is also develop the country’s economy through financial inclusion of unbanked and under privileged people.
For receiving foreign remittance, agent banking made it easy and convenient to the people of remote area. Inward remittance of Tk. 2,673.99 crore was channeled through agent banking across the country upto March 31,2018. The figure of foreign remittance increases to Tk.3514.22 crore in June 30, 2018. By analyzing the records, it is found that the foreign remittance increases 31percent from March quarter 2018 to June quarter 2018, while at the same period the number of accounts and amount of deposit increases by 21percent and 23percent respectively.
There are more than 87,000 villages in Bangladesh. Where as, the total bank branches of all 57 banks are 10000 and among those branches most of the branches are located in district and upazila level. As per record of Bangladesh bank, at the end of June quarter, the total agent banking outlet increased to 5351, which was 4905 at the end of March,2018 quarter. The number of agent also increased to 3588 from 3216 in that period. So, there is scope of increasing agent banking to 86,000, under which every villages gets a bank for financial services. It would be highly effective for financial inclusion of the people.
This mode of banking becomes more popular to the lower income people. A major portion of agent banking accounts are fall into this income level like rickshaw-puller, CNG drivers, garments worker, daily labours who are not used to general banking procedure. In our country ‘hundi’ system have been minimized large extent after starting agent banking since it is easy and place convenient. It is assumed that the services of agent banking will be increased by the passage of times like other countries of the world.
The record shows that 86percent of total market share of agent banking holds by two banks namely Bank Asia Limited and Dutch Bangla Bank Limited. If all the banks are participated in agent banking proactively, the agent banking network will dissipate all over the country within the shortest period of time. The financial inclusion of every people at root level will be possible through agent banking mode. Bangladesh Bank should formulate specific policy where every bank would bound to operate agent banking as per given ration and guidelines. Thus, true financial inclusion of every people would be possible.
(The writer is a banker and researcher).
