Appropriate policy support and necessary actions are required to give further impetus to agent banking services in the country, despite their significant growth since inception in 2014, according to a study.
According to it, the services grew tremendously by 1,798.2 per cent in 2015 and 384.3 per cent in 2016 comparing to the corresponding period.
Since establishment and operational costs of a bank branch in a remote area is not viable in many cases, alternative services like agent banking can be an appropriate answer to meet the need of the huge unbanked people in the country, it added.
The findings of the study - 'Agent banking: effectiveness in financial inclusion' - was presented at a session of the day-long Research Almanac 2018, organised by Bangladesh Institute of Bank Management (BIBM) at its conference room in the capital.
On behalf of the research team, Assistant Professor of BIBM Tanweer Mehdee presented the study findings at the session.
President and Managing Director (MD) of Bank Asia Limited Md Arfan Ali, two supernumerary professors of BIBM Helal Ahmed Chowdhury and Md Yasin Ali, and former MD of Sonali Bank limited S A Chowdhury also spoke at the session.
According to the study, enormous opportunities are waiting for agent banking, as there are numerous unbanked people, growing demand for digital payment system, and thriving micro, small and agro-based industries across the country.
The study suggested that the commercial banks may categorise their agents under different groups depending on their capacity and demand in specific areas.
Terming monitoring a 'crucial task', the study said: "Bangladesh Bank (BB) has mentioned in its guideline that the banks must be held fully liable for monitoring their agents."
It suggested conducting more financial literacy programmes, making technical assistance and the government support available in the initial stage to help the agent banking system flourish properly.
Speaking on the occasion, Mr Arfan Ali said the country's people did not have faith in agent banking during its initial stage. However, there are more than 1.0 million (agent banking) accounts at present.
He also said agent banking is crucial for ensuring marginal people's access to formal financial services.
Md Yasin Ali said despite huge popularity, mobile financial services (MFS) cannot meet all the banking needs of a person.
MFS do not offer loan products, while the cash-withdrawal charge is as high as Tk 20 for Tk 1,000, he also said.
"In these circumstances, agent banking is the best solution, which has a better future in the coming days."
He further said the central bank should pay attention to lower the cash-withdrawal charge of MFS.
Two other study - 'Home loan of banks: trend and impact' and 'Loan takeover in Bangladesh: is it a healthy practice?' - were also presented at the session.
Quoting the government data, the study on home loan said the lack of housing finance is one of the biggest hurdles in ensuring housing for lower- and middle-income families.
Mortgage debt to GDP ratio, a widely-used indicator to measure the depth of housing finance sector, still remains as low as 3.23 in Bangladesh in 2015, which is lower comparing to other Asian countries.
The rate is 8.0 per cent in India, 17 in China, 19 in Thailand, 37 in Malaysia, 37 in Japan and 54 per cent in Singapore.
In his speech, S A Chowdhury suggested that the government or the banks may offer home bonds to make housing finance available.
Evaluating the overall banking sector, he said it needs to restore the people's confidence.
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