Agent banking deposits grow nearly 10% in three months

Banks' deposit mobilisation through their agent banking wings rose to Tk22,261 crore at the end of September this year, up from Tk20,379 crore three months ago – meaning the deposit balance in agent banking increased by 9.24% in the first quarter of the current fiscal.   

At the end of September last year, bank deposits mobilised through agent banking channels stood at Tk13,040 crore. From this count, total deposits so far collected through this form of banking grew 70.71% in a year, according to the Bangladesh Bank's quarterly report released on Thursday.

Industry insiders say during the Covid-induced lockdowns across the country, many people, considering the health safety issue, felt comfortable taking services at the nearest agent banking outlets. This caused a marked rise in the number of accounts opened through the agent banking wings of banks. At the same time, deposits collection as well as loan disbursement through the channel also increased significantly.

In addition, agent banking, the service that takes banking to the unbanked, is attracting more and more marginalised men and women towards banking services as many banks are now providing services through their agent branches at a very marginal level.

According to the latest updated data from the central bank, at the end of June this year, the number of customer accounts in agent banking was 1,22,05,358. At the end of September, the number increased to 1,29,11,541.

Even though women normally shy away from formal banking services, the introduction of agent banking has led to a significant increase in their participation in the banking system. Currently, 46.80% of the total agent banking accounts are held by women while men hold 52.29%.

Banks have also increased loan disbursement through the agent banking channel in the wake of the coronavirus pandemic. Total loans disbursed through agent banking stood at Tk3,997 crore at the end of September this year, up by 25.46% from the amount disbursed as of June.

In the past one year, banks' loan disbursement through their agent banking wings increased by 267%. At the end of September 2020, loans disbursed through the channel stood at Tk1,869 crore.

Remittances earned through agent banking increased by about 10% in the July-September quarter compared to the previous quarter. In the first quarter of this fiscal, banks received Tk6,871 crore in foreign remittance.

The Bangladesh Bank has introduced agent banking in the country through issuing a guideline in 2013. The main purpose of this move is to provide a safe alternate delivery channel of banking services to the under-privileged, under-served population who generally live in geographically remote locations that are beyond the reach of the traditional banking networks.

Banks can deliver a variety of banking services including savings, loans, remittance disbursement, and various payment services (such as utility bills, taxes, government transfer benefits) to the customers through an agent.