Allows banks to appoint individual, NGO, MFI as agent for underserved population
Bangladesh Bank on Monday issued a guideline on the agent banking allowing a bank to appoint any individual or NGO or microfinance institution as its agent for providing limited-scale banking services, especially to the poor people. The BB in its guideline said that the agent banking meant providing limited-scale banking and financial services to the underserved population through engaged agents under a valid agency agreement, rather than a teller or a cashier.
To this end, the BB issued a circular to managing directors and chief executive officers of all scheduled banks asking them to take prior approval from the central bank if they wanted to launch the agent banking.
Non-governmental organisations or microfinance institutions regulated by the Microcredit Regulatory Authority of Bangladesh will be able to play as an agent of a bank, the BB guideline said.
Cooperative societies formed and controlled or supervised under Cooperative Society Act, 2001, post offices, companies registered under Bangladesh Company Act, agents of mobile network operators, offices of rural and urban local government institutions like union information service centre, educated individuals capable to handle IT-based financial services, agents of insurance companies, owner of pharmacy, chain shops and petrol pumps, and gas stations will able to act as an agent of a scheduled bank.
According to the guideline, an agent can act as agent of more than one bank at a time but at the customer-end point retail outlet or sub agent of an agent shall represent and offer banking services of only for a single bank.
The written agreement between bank and the agent should be carefully defined and legally vetted. The agreement should also contain clauses related to confidentiality, safety, soundness and accuracy of all the transactions as well.
An agent bank will be able to collect small value cash deposit and cash withdrawal (ceiling should be determined by the bank), disburse inward foreign remittance, facilitate small value loan disbursement and recovery of loans, instalments, facilitate utility bills payment and cash payment under social safety net programme of the government.
The clients will also get facilities of fund transfer, balance inquiry from an agent bank.
The guideline said an agent’s activities would be within normal course of banking business of the scheduled banks but conducted at places other than bank premises and ATM booths.
Agent must provide the services in the designated business premises.
The guideline said an agent bank would not be allowed to open bank accounts, issue bank cards and cheques, encashment of cheques, dealing in foreign currency, dealing with loan and financial appraisal.
Customers will not be charged directly by the agents for the services and banks will pay reasonable fee and commission to their agents, the guideline said.
It, however, said the banks might charge commission and fee as applicable to its customers.
According to the guideline, the banks will assign one of its branches to be responsible for the agent operating in the designated area of the branch.
The agents will to be equipped with IT devices like point of sale (POS), card reader, mobile phone, barcode scanner to scan bills for bill payment transactions and personal identification number (PIN) pads and will have personal computers that are to be connected with their bank’s server using a personal dialup or other data connections, it said.
Banks will have to submit copies of agreement signed between them and their agents to the BB before launching the product.
The banks must formulate internal audit policy to monitor and control the agents and they will have to visit the agents’ outlet offices at a regular interval to ensure that the agents follow guidelines on agent banking.
An agent will have to keep of all relevant financial records, data and documents or files for at least six years; or alternately, such record is shifted to the bank at regular pre-specified intervals which will then ensure safekeeping of these records for at least six years.
The guideline said that the banks would have to ensure adequate measures for customer protection, awareness and dispute resolution are in place.
The banks must run a call centre to receive and process disputes 24-hour via telephone, SMS, and mail.
Each of the disputes received by the centre must be resolved within three working days, the guideline said.
-With New Age input
