AKM Zamir Uddin

Along with deposit mobilisation and loan disbursement, banks’ agent banking outlets are increasingly becoming the key point in distributing remittance in the remotest part of the country.

Remitters now opt for the platform largely because the beneficiaries can withdraw funds without visiting any bank branches, which are usually located far away from their homes.

Between July and September, agent outlets disbursed Tk 38,335 crore in remittance, up 43.84 per cent from three months earlier and 221 per cent year-on-year, data from the central bank showed.

There are two reasons for the surge in remittance flowing through the agent banking, said Md Anwarul Islam, general manager of the financial inclusion department of the central bank.

First, the agent booths are usually located adjacent to the houses of the recipients. Second, the 2 per cent cash incentive provided by the government has attracted people, he said.

In the past, a good number of expatriate Bangladeshis preferred hundi, an illegal cross-boundary financial transaction system, to send their hard-earned money to allow their near and dear ones to receive it smoothly sidestepping the complex fund withdrawal process in the banking system.

But the recipients can now withdraw the fund easily from the agent outlets, which are expanding across the country, pushing the hundi channel aside.

As of September, the total number of agent outlets stood at 14,016 in contrast to 9,391 one year earlier.

The government has been providing the 2 per cent cash incentive against remittance from July last year to encourage the Bangladeshi diasporas to send fund through the formal channel.

In some cases, banks are offering one per cent additional cash incentive along with the two per cent if the remitters send the money through the agent banking outlets.

Islam hoped that there is no doubt that more remittance would be channeled through the agent banking in the days ahead. Migrant workers remitted $2.11 billion last month, way higher than $1.64 billion flown to the country in the same month a year ago.

Brac Bank has decided to embrace the branchless banking model riding on the agent banking method, said its Chairman Ahsan H Mansur.

“We have a plan to set up agent outlets in every village to bring the unbanked people under the financial umbrella,” he said.

The bank has disbursed 50 per cent of the total outstanding loans of Tk 1,086 crore given through the agent banking by all lenders.

Nineteen banks now operate agent banking. The central bank issued the agent banking guidelines in 2013 as part of its effort to bring the unbanked population under the banking network to widen the financial inclusion.

Deposit mobilisation and loan disbursement have received a momentum on the back of the window.

Deposit collection soared 111 per cent year-on-year to Tk 13,040 crore at the end of September. Loan disbursement grew 255 per cent to Tk 1,086 crore.

Bank Asia has taken several initiatives to speed up loan disbursement through agent banking, said its Managing Director Md Arfan Ali.