Agent banking, which means offering limited financial services to unbanked people through hired agents, has taken banking services to the doorstep of rural people.

Many people who would not think of opening bank accounts have now come under banking services thanks to the introduction of agent banking in the country.

Saidul Islam, 40, who lives in a villager in Pabna district, told Bangladesh Post, “We had long been out of the reach of banking services. But agent banking has taken the service to us.”

Economists and bankers say agent banking is playing a crucial role in bringing unbanked people under banking services and developing the rural economy.

In agent banking operation, agents hired through agreements offer several banking services on behalf of the banks they work for.

The services include cash deposits, withdrawals, account opening, account inquiries, remittance disbursement, small-amount loan disbursement, loan recovery, fund transfer, and allowance disbursement under the government's social safety net programmes.

Agent banking was introduced in Bangladesh in 2013.

According to the Bangladesh Bank, 28 banks have taken licence for running agent banking and 24 of them have launched the service so far.

Saidul said most of the village people would not dare to carry money to and from the bank branches at towns for security reasons because they would face robbing and snatching.

Many people like Saidul Islam expressed their satisfaction with the availability of banking services at rural areas through agent banking.

Khajida Khatun, 56, a resident of Puruliya village in Natore whose family depends on remittance sent by her eldest son in Italy, told this correspondent, “I would face trouble to receive the remittance as the bank was far away from my home.”

She said the family would not get money within a short time of sending of the remittance even in emergency situation. “Now, we receive remittance instantly through agent banking.”

Economists and bankers say agent banking is playing a crucial role in ensuring the economic growth by expanding financial inclusion.

They say this new mode of banking transaction has become a blessing for the country's economy during the Covid-19 pandemic, when people are avoiding travel.

“Agent banking has plays a vital role in delivering banking services to remote areas across the country,” said Dr Atiur Rahman, a former governor of Bangladesh Bank.

He told Bangladesh Post that from the idea of Digital Bangladesh, agent banking is bringing a revolutionary change in the banking sector.

Because of its hassle-free services and low cost, agent banking has become popular among the people, especially expatriates, who can send their money home even in remote areas.

It also is helping to increase remittance by encouraging expatriates to send their hard-earned money through legal channels, instead of illegal ‘Hundi’, Dr Atiur said.

Md Arfan Ali, Managing Director and CEO of Bank Asia, said agent banking has generated huge jobs by creating young entrepreneurs and contributing significantly to uplift the rural economy.

The service is aimed at bringing the unbanked people under the formal financial umbrella, he said, adding that agent banking will play a facilitating role in bringing a large portion of the population, presently out of formal banking services, into this inclusive banking model.

“I hope this new distribution channel will equally be successful like those of the SME loans and mobile financial services by penetrating deep into rural economy,” Ali said.

Increases in corporate clients, salary payments, cash transfer, tuition fee payments in educational institutions, and shopping payments have boosted their transactions in recent months.

The amount of deposits stood at Tk 13,040 crore in September of the current year, up 111 percent from Tk 6,170 crore recorded in the same period of the previous year.

The disbursement of loans reached Tk 1,086 crore in September, which was 255 percent higher than Tk 306 crore in the same period of the last year.

The country is receiving a significantly large portion of the remittance through agent banking.

In September, the remittance inflow stood at Tk 38,335 crore, which was 221 percent higher than Tk 11,937 crore in the same period of the previous year.

Until September, the number of agent banking outlets stood at 10,163, up 16 percent compared to that in the same period last year.

The number of agent banking accounts crossed 82,000,000 in September, up 107 percent from 4,000,000 in the same period of the previous year.