'Islami Bank has a strong legacy in agent banking'

Agent banking channel has become the fastest growing markets. Islami Bank dominates agent banking industry with a 45% market share and around Tk 5,200 crore in fresh deposits, says Md Omar Faruk Khan, Managing Director Islami Bank Bangladesh PLC

FE Team | Published: Wednesday, 21 January 2026

While explaining the benefits of agent banking during an interview with the FE, Md Omar Faruk Khan, Managing Director, Islami Bank Bangladesh PLC, said the primary focus of agent banking services is to bring unbanked populations -- particularly in remote and underserved areas. It creates savings habits among the mass people. If the velocity of savings circulates within the banking channel it contributes to capital formation which helps the development of industries and employment generation. The another reason for acceptability of it to the mass people and banks is doing business by cost-effective way. Agent banking services enable banks to optimize operational efficiency while significantly reducing operational costs.
By prioritizing of customers needs and practical considerations, the journey of agent banking services of Islami Bank started in the Mid 2017 through the launching of a pilot outlet at Birulia, Savar.
On the difference between traditional banking and agent banking, he said the ultimate objectives of agent banking services involve more people in the remote areas where usual bank branches can't do business due to huge operational cost and communication etc.
There are several difference between traditional and agent banking affairs. Traditional bank provides banking services through physical infrastructure with a branch at a large. On the other hand, agent outlets provide limited scale of services with a small space. Traditional banking affairs render huge facilities with a large volume through its own recruited manpower. Whereas agent outlets facilitate the services with a confined volume through agent owner requited manpower. Banks supervise and monitor the agent outlets. All customers are treated equally by the bank in terms of respect and service.
He said Islami Bank has a strong legacy in agent banking. After Bangladesh Bank issued its first agent banking policy 2013, Islami Bank received approval to launch five pilot outlets. In compliance with regulatory guidelines, we opened first agent banking outlet in July 15, 2017 at Birulia, Savar. After successful piloting the bank started commercial operations from December 2017.
"The agent banking service of Islami Bank was launched with a view to bringing the underprivileged people under the ambit of banking services. We believe that every person must have at least one savings account so that he can access the banking services such as deposits and withdrawals of money, receiving foreign remittance, different types government allowances like-Widow allowance, Elderly allowance and paying utility bills at the doorstep of customers through technology-based modern services (such as the Cellfin app, biometrics), which are easy and safe to access for the marginalized people," he said.
When asked about the expansion of agent banking by the Islami Bank, he said since its inception, the agent banking service of the IBBPLC has experienced strong and sustainable customer response. Within short time we are holding 45 per cent share of the market through expanding to 477 Upazilas with 2,788 outlets. As our focus is to bring the underprivileged people to the banking service we concentrate consciously to the rural areas. That's why most of our agent outlets (94%) are in remote areas which equate 94:6 in urban-rural ratio.
On the contribution of agent banking to financial inclusion at low cost, he said unlike traditional branch banking, agent banking significantly reduces infrastructure and operational costs. In this regard, Islami Bank capitalizes on established local businessmen as agents, allowing efficient and cost-effective service delivery to underserved communities.
Instance-Islami banks Agent banking is a faster, more affordable way to reach unbanked communities compared to traditional branches banking affairs. By bringing secure, modern technology directly to the customer's doorstep, our agent banking services are successfully bridging the gap between formal finance and the public. This model significantly reduces the time and cost of banking, allowing customers to spend less time on transactions and more time on productive work and economic growth.
Driven by widespread popularity, agent banking has enabled Islami Bank to rapidly expand modern banking services to nationwide through a network of 2,788 agent outlets. In 2025, the number of agent banking account has increased by 7.59 lakh totaling 57.97 lakh and our total deposit in this sector has stood at Tk 22,000 crore with an increase Tk 5,200 crore in the year 2025. Investment portfolio of our Agent Banking on December 31, 2025 has stood at Tk 1,731.
Asked about the growth of investment of Islami Bank through agent banking along with the account numbers of male users and female users, he said "We have collected total 11 lakh accounts last year the growth of account opening is 14% among which the male account holders are 6 lakh and female account holders are 5 lakh."
The process of opening a bank account has been simplified to promote savings habits among individuals. However, availing investment facilities involves adherence to established rules and principles, and entrepreneurs who fulfill these conditions qualify for investment support. Islami Bank remains dedicated to supporting entrepreneurs through its investment facilities. Total number of investment accounts stood at 62,807 with the investments facilities Tk 1,731 crore. The growth of investment is 11% with the number of male clients of investment holder are 6,523 and female 56,284.
At the end of 2025 our total deposit has reached to Tk 1,823,060 million with a growth of 14.20% over previous year. Fresh deposit of Tk 220,849 million was mobilized in 2025. The contribution with a growth of 29 per cent of agent banking channel is Tk 5,200 into the bank's entire deposit in the year of 2025 whereas total general investment of the bank was increased by 19.81% in 2025 compared to 2024.
Highlighting his bank's plan regarding agent banking in the next two or three years, he said by 2030 through agent banking channel, the plan is to open one crore accounts and mobilize Tk 60,000 crore in deposits. Simultaneous actions are in progress to improve service quality and technologize remittance services, with a special focus on expatriate customers.
On major challenges that need to be overcome for smooth operation and expansion of agent banking across the country, Khan said agent banking channel in Bangladesh has reshaped financial inclusion, yet its smooth function and extensible growth continue to face key challenges.
Weak infrastructure, low financial literacy, unprofessional operational activities with cash management, cybersecurity risks, limited service offerings are the challenges of agent Banking.
To overcome these challenges, banks must upgrade digital and network infrastructure, strengthen cybersecurity measures, conduct continuous agent training and supervision, streamline operational and regulatory processes, and focus on financial literacy programs -- particularly in rural areas -- to drive trust and efficiency.
Asked about the extent of NPL in agent banking, he said, "Our records show that investments disbursed through the agent banking channel have achieved an outstanding recovery success rate of 99%. As a result, Non-Performing Investments (NPI) are not expected to pose a threat to the expansion of investment facilities.
In this regard, Islami Bank has decided to gradually expand its CMSME investment activities through agent outlets by deploying its own manpower in a phased manner.