The amount of money transacted through agent banking exceeded the Tk 50,000-crore mark for the first time in January 2022 as the service has managed to expand its reach in the country’s rural areas.
The Bangladesh Bank gave agent banking licence in 2014 with a view to bringing the unbanked people under the formal banking channel by taking the services to the remote locations of Bangladesh.
After the formation of agent banking guidelines in 2013, Bank Asia launched the service in January 2014.
The central bank has so far issued licence to 28 banks to run agent banking service. Of them, 26 banks are providing the service to the customers.
Transactions through agent banking accounts reached Tk 52,172.8 crore in January 2022 from Tk 49,139.3 crore in the previous month.
The transaction was Tk 34,078.6 crore in January 2021 and Tk 18,584.2 crore in the same month a year ago.
Of the transactions, transactions in the rural areas stood at Tk 41,415.9 crore, accounting for 79.38 per cent of the total transactions through agent banking wing.
On the other hand, transaction in the urban areas was Tk 10,756.9 crore, which is 20.62 per cent of the total transactions made through the agent banking.
Along with the surge in transactions through agent banking wing of the banks, the number of agent banking accounts in the country reached almost 1.5-crore mark with the number stood at 1.44 crore in January 2022.
In January 2021, the number of agent banking accounts was 1.01 crore.
Of the accounts, 77.83 per cent or 81.91 lakh accounts were opened in the rural areas while the remaining 22.17 per cent or 23.33 lakh accounts were opened in the urban areas.
In terms of holding customer accounts, Bank Asia is leading all other banks while Dutch-Bangla Bank, Islami Bank Bangladesh Limited, Al-Arafah Islami Bank and Agrani Bank are following suit.
Following the Covid outbreak in the country, agent banking has become more relevant as a concept as the banks opted to refrain from opening branches during the outbreak to stay cost efficient.
The number of agents and outlets of the banks also grew sharply in the last couple of years after the Covid outbreak.
The number of agents of the banks rose by 76.45 per cent in the last two years to reach 14,081 in January 2022 from 7,980 in the same month of 2020.
Besides, the number of bank outlets increased by 69.83 per cent or 7,975 to 19,396 in January this year from 11,421 in the same month of 2020.
Bankers said that the agent banking service was much effective during the pandemic when the banks were very busy with implementing the stimulus packages.
Besides, the cost involved in agent banking is far lower than opening a branch and that’s why agent banking allows banks to gain a foothold in areas where it would not become viable for the banks to have a presence by opening a branch, they said.
Besides, a segment of people do not get effective services from the branches due to their low transaction volumes and agent banking plays a vital role in fulfilling the needs of these people, they said.
Alongside gaining a foothold in the rural areas through agent banking, the service allows the banks to strengthen their presence even in the urban areas, the bankers said.
Though the transaction through agents reached new height, the banks’ lending through agent banking dropped to Tk 455.5 crore in January 2022 from Tk 552.4 crore in the previous month.
The lending, however, in the last two years increased significantly from Tk 70.6 crore in January 2020.
Of the lending made in January, the banks disbursed Tk 287.8 crore for the rural areas against their disbursements of Tk 167.7 crore for the urban areas.
Apart from the loan disbursement, the agent banking wings have also emerged as a cost-efficient way of deposit mobilisation for the banks with the volume of deposit collection through agent banking reached Tk 24,003.0 crore in January 2022 from Tk 7,725.8 crore in the same month two years ago.
-With New Age input