Question (Q) : Agent banking is now being considered as a cost-effective banking approach, particularly in the least developed areas. Could you please explain the journey of agent-based banking service of your bank?
Answer (A): The journey of agent-based banking services in Bangladesh reflects a transformative effort to promote financial inclusion and bridge the gap between rural communities and formal banking. Introduced under the regulatory framework of the Bangladesh Bank in 2013, agent banking was designed to provide essential banking services to underserved and unbanked populations, particularly in remote and rural areas. By deploying agents-individuals or entities acting on behalf of banks-this model has enabled account opening, cash deposits and withdrawals, remittance services, and bill payments without the need for traditional bank branches.
Prime Bank's Agent-Banking journey began with recognizing the need for accessible financial services in underserved areas. We launched the service on 31st December 2020 providing only essential Banking services like deposits, withdrawals, and transfers. After successful trials, we expanded the network, upgraded our technology, and diversified services. Agent Banking has become a key driver of financial inclusion, offering cost-effective banking solutions to remote communities while reducing operational costs.
Q: Please share with us the difference between traditional and agent banking affairs.
A: Traditional Banking operates through physical Branches, offering a wide range of services with higher operational costs. It requires customers to visit branches for transactions. However, in Agent banking, uses local Agents (e.g., shopkeepers) to provide basic Banking services like deposits, withdrawals, and transfers. This model is more cost-effective, as it eliminates the brick-and-mortar model and makes banking more accessible to underserved populations.
Q: How many agent-banking outlets does your bank have so far and their urban-rural ratio?
A: By leveraging local Agents, we aimed to offer essential services making banking more accessible and affordable for a wider customer base. As of December 2024, there are 149 agent banking outlets across the country, with a distribution ratio of 30% in urban areas and 70% in rural areas.
Q: Do you really think agent banking services help expand commercial banks' service network among the unbanked people in a faster and low-cost way? Please answer with an example of your bank?
A: Yes, Agent Banking services play a crucial role in expanding commercial Banks' service networks among unbanked populations in a faster and cost-effective manner. For example, our Bank's Agent Banking model has enabled us to reach remote areas where building traditional branches would be expensive and time-consuming. By partnering with local Agents, we can offer basic banking services. This approach has significantly increased our reach, allowing us to serve unbanked communities quickly and at a lower cost, promoting financial inclusion.
Q: Many people term agent banking a key deposit-mobilisation platform in the banking sector. Could you please share the performance of your bank's agent banking outlets in terms of deposit collection and credit disbursement in recent years?
A: Prime Bank Agent Banking outlets have significantly boosted deposit collections (300%+), particularly in rural areas, where access to branches is limited. The network has also facilitated the disbursement of micro-loans and helping us to reach Agri Loan and small businesses.
Q: Please, tell us the growth in advances of your bank through agent banking along with the account numbers of male users and female users.
A: Through Agent Banking, our bank has experienced significant growth in advances, particularly in reaching underserved communities. In terms of account distribution, we have a diverse user base. As of the latest data, the number of male users benefiting from advances through agent banking is 18 thousand, while female users account 14 thousand. This shows that our agent banking services are effectively reaching both men and women, contributing to greater financial inclusion and access to credit for all.
Q: Please, tell us about growth in deposits and advances in agent banking and their contributions to your bank's entire deposit and lending portfolios.
A: Agent banking has driven significant deposit growth in 2024. Its contribution to Prime Bank's overall deposit portfolio has been remarkable. Despite facing various challenges, agent banking has achieved a 300%+ increase in deposits.
Q: What are the major challenges that need to be overcome for smooth operation and expansion of agent banking across the country?
A: As Bangladesh moves forward in 2025, addressing key challenges in the agent banking sector is essential to sustain its progress in financial inclusion. One pressing issue is the lack of reliable infrastructure, particularly power shortages in remote areas, which hinders the seamless operation of banking services. Security remains another critical concern, with the need to strengthen measures against fraud and ensure robust safeguards for customers and agents alike. Building trust is equally vital, as customer confidence in agent banking services forms the backbone of its success. Additionally, efficient cash management must be prioritized to ensure agents have sufficient liquidity to meet customer needs. Overcoming these challenges will require a collaborative effort from policymakers, financial institutions, and technology providers to ensure agent banking continues to thrive as a key driver of economic empowerment in Bangladesh.
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