Brake pressed on agent banking

The fast-growing agent banking will now be regularly monitored as the central bank of Bangladesh issued a circular revising the rules to ramp up watch on such outlets of banks.
In the wake of spontaneous spread of agent banking across the country -- now down to union level -- the Bangladesh Bank issued Thursday the 'Prudential Guidelines for Agent Banking Operations in Bangladesh'.
Signed by general manager Ms. Maksuda Begum of the Banking Regulation Policy Department of the BB, the guidelines provide that the banks have to ensure two-factor authentication (TFA): the use of a photo ID, personal identification number (PIN), biometric fingerprint, or any other secret code or message during transactions.
"Quarterly or monthly physical visits by the banks' staff or authorized persons are necessary to ensure that agents operate strictly within the requirements of the law, guidelines, and contract," the circular says.
Besides, "the branch manager or branch-nominated officials shall closely monitor the agent-banking activities of the outlet linked to the branch".
It says, "No agent shall relocate, transfer, replace or close its agent-banking outlet without prior written consent of the bank. Banks have to take prior approval from BRPD for relocation of outlet and transfer or replacement of outlet ownership."
However, no such approval will be required in case of closure of the outlet.
Banks have to submit a quarterly report to Financial Institutions Division (FID) of the Ministry of Finance providing information on financial irregularities, fraud, forgeries, scams, accidents etc that occurred while conducting agent-banking operations and actions taken by the respective bank.
The report has to be submitted within seven working days after the end of each quarter as per the annexure attached with the guidelines.
Amidst the covid-19 pandemic that upset normal order and activity, agent banking in Bangladesh continued to grow in all dimensions in the quarter ending last December.
The number of accounts opened through agent banking reaches 14.047 million, nearly 48 per cent belonging to female customers. And 12.12 million or more than 86 per cent belong to customers in the rural areas.
The number of accounts opened through agent banking had grown by nearly 9.0 per cent over the previous quarter having ended in September 2021.
Central bank quarterly says the persistent positive growth in agent-banking accounts amidst the covid-19 pandemic indicates the surging demand for agent-banking services across different segments of population.
As of December 2021, 29 banks carried out agent-banking activities through 19,247 outlets operated by 13,952 agents.
The number of agents had grown by 3.58 per cent while the number of outlets grown 6.47 per cent over the previous quarter.
At the end of December 2021, the amount of deposits accumulated in the agent-banking accounts was Tk 242.94 billion.
The amount of loan disbursement through these accounts is Tk 53.47 billion and the cumulative amount of inward remittances disbursed reaches Tk 823.43 billion.
The amount of inward remittances distributed by the agent outlets has increased over 10 per cent.
This remarkable increase in remittances channelled through agent banking seems to be a positive outcome of the government policy on 2.5-per cent cash incentives coupled with some banks' announcement of additional cash incentives on the remittances.

jasimharoon@yahoo.com