Agent Banking and Its Prospects in Bangladesh

Agent Banking and Its Prospects in Bangladesh

Now-a days the banking process is becoming faster, easier and wider throughout the world. At the same time banking sector is modernizing and expanding its area in different financial events every day. In recent years banks have diversified their services by their different products and services and also new subsidiaries are created so that they perform additional services to the customer or by merging with other types of financial institutions.

Modhumoti bank ltd (mmbl) started its operation as a commercial bank in Bangladesh at 10th September, 2013 after obtaining license from Bangladesh Bank. The Bank’s vision is to lead the new generation of local commercial banks by excelling in customer delivery through insight empowered employees, smart use of technology and a full scale of highest quality products and services.

Modhumoti bank ltd has recently introduced a new devastating and special product and service in our country which is Agent Banking. This bank has launched the Agent banking service in their recent 2nd anniversary which is currently established in their Shakhipur Branch.

This report is all about Agent banking and its prospects in Bangladesh. Agent banking service is new to this country and before Modhumoti bank there are two other banks only that who have launched this service in Bangladesh. Agent banking service is kind of new to this country and it’s still not that spread across the country. The main purpose of agent banking is to bring and introduce the banking services to the people of rural areas through an agent where the physical structure of a bank cant established there.


Agent banking is a unique and new service system to the banking sector and many people do not fully understand the systems of agent banking. Agent banking is a which provides to customers a limited scale banking and the various types of financial and transactional services to people who doesn’t get any opportunity or services from banking sector in their area and it will be provided through an agent who will be the representative of a certain bank and provide all the possible banking services they can get.

Agent banking services is banking services which are provided through engaged agents under a valid agency agreement, service agreement or a similar agreement. It is the owner of an outlet or branch who conducts banking transactions on behalf of a structural bank. These retailers globally square measure being progressively used as necessary distribution channels for money inclusion. Bangladesh Bank has additionally determined to push this complimentary channel to achieve to the poor phase of the society additionally as existing bank client with a variety of monetary services particularly to geographically spread locations. With a read to making sure the security, security and soundness of the planned delivery channel Agent Banking pointers are framed by the Bangladesh Bank to allow banks to be engaged in agent banking. (Agent Banking)

The following services will be covered under Agent Banking:

  • Receiving of small value cash deposits and cash withdrawals
  • Inward foreign and local remittance disbursement
  • Facility of small value loan disbursement
  • Recovery of accounts, cards, loans, instalments to customers
  • Facility of utility bill payment and other bills
  • Cash payment under the Government social safety net programmer
  • Facilitating fund transfer from account to account
  • Balance inquiry and information
  • Collection and processing of forms/documents in relation to account opening, loan application, credit and debit card application from public
  • Post sanction monitoring of loans and advances and follow up of loan recovery.
  • Receiving of clearing and issuing cheque.
  • Other functions like collection of insurance premium etc. (Agent Banking)

Required Qualification for performing as Agent:

  • Agent must have a permanent resident and authorization
  • Must have enough guidelines and knowledge for conducting Agent banking.
  • Agent should be financially self-dependent & have the ability to cash transaction.
  • Ability to meet commitment with customer.
  • Agent should have knowledge and ability to handle technology and its financial services.
  • All transaction’s with the customers which are recorded should be preserved for internal audit with enough securities
  • Agent cannot be engaged with any personal and unauthorized activities.
  • Agent should have ability to perform the given responsibility accurately
  • Agent must be concerned about the reputation of the institution and its well being.

(Bank Asia- Agent Banking manual)

Agent banking is a unique service and it has been introduced in the different areas of Bangladesh where traditional and structural banking and its products and services has not yet reached. From Jan 19 two banks have started recruiting agents at the grassroots level and offer banking services which is Bank Asia and Dutch-Bangla Bank. Later another two banks – South Bangla Agriculture and Commerce Bank, and NRB Commercial Bank launched the service. And recently Modhumoti bank got license from Bangladesh bank and introduced their agent banking operations in Shakhipur to begin operation.

The central bank issued licenses to the five banks for running agent banking, under which financial services would be offered through agents instead of branches. Bangladesh Bank officials said Bank Asia had already appointed 49 agents in 32 upazilas under 17 districts and Dutch-Bangla recruited six agents. Bank Asia recruited more than 20 agents on Bogura, Shirajgonj, Rajshahi, Nouga and Rangpur. The central bank had issued a circular on Dec 9, 2013 approving agent banking in the rural areas where banks have no branches. In another circular on Jan 6 this year, the central banks endorsed agent banking also in the urban areas not covered by traditional banking system.

According to Bangladesh Bank, customers won’t need to pay any charge for the services that they’re going to receive through the agents. Little amounts of cash may be deposited or withdrawn besides receiving remittent through agent banking. The agents will pay out little credit and collect loan installments and utility bills. The policy on agent banking stipulates that customers will receive government help from social safety programmers and deposit premium through the agents. They’ll conjointly transfer cash from one account to a different and check account balance. Anyone will collect info concerning gap of checking account from the agents and apply for loans, and credit or debit cards through them. The agents, however, cannot build payment on any cheque, open any account, issue cheque books or bank cards, and interact interchange. AN agent has got to have the qualifications determined by the financial organization and provides a deposit of Tk 100,000 for appointment. They’re going to get a definite commission on transactions. The policy says NGOs, micro-credit agencies, cooperatives, post offices, companies, mobile-phone operators’ agents, union info service centers, regime establishments and anyone capable of providing money services supported info technology may be appointed agents.

Organizational Overview

Modhumoti Bank limited (MMBL) started its operation as a commercial bank in Bangladesh on 10th September 2013 after obtaining license from Bangladesh bank, the central bank of Bangladesh with a strong capital base of BDT 1370 million contributed by some preeminent investors who include lawyers, industrialists and businessmen in diverse fields of the country. The banks vision is to lead the new generation of local commercial banks by excelling in customer delivery through insight empowered employees, smart use of technologies and a full usage of highest quality products and services.

MMBL’s focus is on delivery of a comprehensive range of customer centric financial products and services to meet requirements of various products and services to meet requirements of various customers of different types, ranging from rural areas to corporate houses in cities through obtaining high standard of ethics and customer service.

The bank introduced commercial banking, consumer banking and cash management, treasury and services to its customers. It has been strong individuals, corporate, government organizations, small and medium enterprises and through its network of offices in the various locations of the country and utilizing information technology and talented human services.

MMBL believes in financial inclusion concept and has introduced alternative delivery channel, such as agent banking to reach the masses. The bank will continue opening branch offices in the near future to increase its presence in the country. Balance sheet of the Bank is growing steadily and key business indicators are also showing positive performance.

The year 2014 was a challenging year for the Bank. It began to mobilize both deposits and loans as the country’s political situation began to improve and economic activities began to improve and economic activities began to pick up. The management of the bank expanded business in slow and steady manner during the year. At the end of the year, the bank’s total deposits stood at BDT 9,838 million, which is an increase of 485.71 per cent from BDT 1,679.70 million as on December 2013. (Modhumoti Bank)

The mission of MMBL is –

  • Fast and reliable customer service
  • Maintain and balance sustainable growth
  • Follow strong rules and regulations and business ethics
  • Offer customers quality financial products and services with latest technology
  • Provide smooth come back on shareholder’s equity
  • Attract and retain qualified human resource
  • Maintain company social responsibility
  • Explore un-banked areas

The vision of MMBL is –

Is to steer the new generation of native business banks by excelling in client delivery through insight, empowered staff, sensible use of technology and a full vary of highest quality product and services. (Modhumoti Bank)

Findings and Recommendations

Findings: During my internship I have found some information and some important aspects regarding Agent banking which include different news and information, and interviews from the customers, employees and executive officers from MMBL.

The findings of Agent banking that I found is-

  • Modhumoti Bank limited recently has introduced Agent banking on their 2nd anniversary this September by obtaining license from Bangladesh Bank.
  • Executive officers of MMBL suggested having a physical structure of Bank (branch) near to agent banking coverage area.
  • Agent Banking targeted areas need to cover more rural areas and its peoples for the maximum service.
  • Executive officers of MMBL think that people need more idea of agent banking activities.
  • Bank Asia and NRB bank are the other two banks who has the license from Bangladesh bank for Agent banking and currently their agent banking service is running.
  • Agent banking is becoming popular in North Bengal now-a-days.
  • New customer, transactions are increasing day by day through agent banking.
  • This year from June to now on Bogura, Shirajgonj, Rajshahi district has recruited more than 10 agents to their rural areas.


  • Bangladesh bank should have more training seminar for the agents.
  • The proper ideas and information about the service of agent banking should be elaborated and discussed to the customers.
  • Proper advertising, seminar and events should held for the customer attention and increase the popularity of unique services of agent banking.
  • Bangladesh bank should give more permission and license to other banks to start agent banking which will be a great help for the rural areas.
  • If more agent banking is established then the rural area people can learn more about the banking products and services which will be helpful for the country.
  • Agent banking needs to target and cover up more areas where the banking services and physical structure of a bank cannot established well.
  • Agents should be trained and experienced well enough for the agent banking services because the customer of rural areas can get the maximum service they can have from a bank itself.
  • Proper banking services and products should be available on agent banking.
  • Agent banking should be more organized and resourceful enough to replace a bank and through this Bangladesh can become financially developed as more customers are being covered.
  • Gaining customer trust is very important for agent banking as they need to transact their savings and more traction facility should be available for the customer.
  • More agents should be recruited for the agent banking service
  • More agents should be placed for more rural areas for the maximum coverage and more facility for the villages.


A banking service that can bring rural people to more financially advance and to be treated like all the customer of a bank and have facility like a Bank is actually an Agent banking is all about. Agent banking is a very special and unique service that can provide very important transaction facility to rural people. Though it’s a new service in this country yet customer are increasing day by day are taking services and dealing a lot of transaction through agent banking. Rural people are very satisfied by the attempt of this unique banking service which is very useful to them as they can savings their money and even transfer money from one place to another easily through creating an account by agents are representing a bank itself. Now the total 5 banks has the license of agent banking which is NRB bank, Bank Asia, Dutch-Bangla Bank, South Bangla Agriculture and Commerce Bank and Modhumoti Bank. Expect the Modhumoti bank the other four banks already have their agent banking service running and MMBL has recently introduced it and open their agent banking and individual branch is being established in Shakhipur. I hope MMBL will do great in the agent banking service similar to their existing branches. Agent banking is becoming very popular and will lead a strong financial outcome in the country and the people will be benefitted highly through the agent banking.