Agent bank accounts keep growing

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Transactions through agent bank accounts increased by 43% year-on-year to Tk 5,64,844 crore in FY 2021-22 as more people now use the new bank teller, Bangladesh Bank data showed.

In the financial year 2020-2021, the amount flowing through these accounts, opened through agent banking services, was Tk 3,94,068 crore.

However, the transaction amount growth between what was in FY 2019-20 and FY 2020-21 was 106%.

Agent banking was introduced in Bangladesh in 2013, with the central bank awarding 28 agent banking licenses with the aim of providing a secure alternative delivery channel of banking services to the disadvantaged and underserved population who live in remote locations .

In line with the central bank’s directive, Bank Asia introduced the country’s first agent banking services in January 2014.

In addition to the strong growth in transactions, the number of agent bank accounts, i.e. accounts opened by agents, also increased year-on-year.

The number of agents across the country stood at 14,300 in June 2022, compared to 12,930 in the same month a year earlier. The number of bank agent outlets increased to 19,738 from 17,147 during the period.

In addition to the strong growth in transactions, the number of agent bank accounts, i.e. accounts opened by agents, also increased year-on-year.

The total number of agent bank accounts stood at 1.6 crore in June 2022, up about 31% from the same month a year earlier. However, there was a 54% growth in the number of accounts in June 2021 compared to that of the same month of the previous year.

According to Bangladesh Bank data, 79.80 lakh men had opened agent bank accounts by June 2022, a year-on-year increase of about 20%.

In the case of women, it was a 52% year-on-year increase to 78.73 lakh in June this year.

The agent banking industry has grown rapidly as an alternative to the branch-based banking model in Bangladesh, especially in rural areas, where setting up full fledged offices is not commercially viable due to their low volume of activity.

As of June 2022, out of a total of 19,738 bank agent outlets, 17,005 were in rural areas while the rest in urban areas while 12,115 agents out of a total of 14,300 were in rural areas. rural areas, central bank data showed.

Regarding the number of transactions, more than 1.85 crore of Tk out of a total of 2.25 crore of transactions took place in rural areas.

Usually, basic banking services such as cash deposits, cash withdrawals and receipt of remittances are provided through banking agents. Apart from this, banks have also started issuing loans through their agents.

According to BB data, the deposit balance was Tk 27,754 crore in June 2022, compared to Tk 20,218 crore in the same month of 2021.

Banks disbursed Taka 671 crore in loans through the agent banking system through June this year, compared to Taka 456 crore in the same period last year.

Till June 2022, Tk 155 crore was paid in utility bills through agent banking, which was Tk 108 crore in the same month last year.

However, remittances through the agent banking channel declined year-on-year.

As of June 2022, Tk 2,272 crore has been channeled to beneficiaries compared to Tk 2,855 crore in the same period of the previous year.

At least 24 banks have deployed the banking agent service. Among them, five opened 90.20% of agent bank accounts in March.

Bank Asia opened the most accounts, 5,154,261, or 33.92% of total accounts, according to central bank data.

In deposit collection, Islami Bank leads the list with 38.63% (9,722 crore Tk) of total deposits, followed by Dutch-Bangla Bank with 14.71%.

In case of lending, five banks account for 98.49% of total lending in March 2022.

Brac Bank tops the list with Tk 4,061 crore or 63.24% of the total amount lent through agent banking.

“Agent Banking brings a new area into our palm which was not in our territory before,” said Nazmur Rahim, Head of Alternative Banking Channels at Brac Bank.

Instead of using SME units, the bank can reach new customers through banking agents. New customers and SME entrepreneurs are also not shy about using banking channels due to the presence of agents.

“So we can understand which areas deserve a sub-branch to promote SME lending,” he said.

On the surge in transaction growth in FY21, Rahim said people prefer to go to agents for their banking needs instead of going to branches amid the coronavirus pandemic. .

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