Agent Banking for Bangladesh

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VOL 20 NO 157 REGD NO DA 1589 | Dhaka, Thursday, March 28 2013 | | Bangladesh Bank mulls agent banking for financial inclusionM S Siddiqui

Agent banking is a financial service offered to customers by a third party on behalf of a financial institution (FI). An agent is an entity that is engaged by an FI to provide specific financial services on its behalf using the agent's premises.

It is an additional delivery channel that can enhance the convenience, the outreach of quality and affordable financial services, particularly to the underserved, in a more cost-efficient manner. Such an arrangement is a cheaper way for FIs to reach out to the underserved population.
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First, agent banking minimises fixed costs by leveraging existing retail outlets and reducing the need for financial agent banks to invest in their own infrastructure. Second, acquisition costs are lower for bank-enabled agents and bank wallets.

The advancement in information and communication technology (ICT) has brought with it the tremendous innovation in the banking industry. Currently, agent banking is an integral part of modern banking in many countries. Banks in Bangladesh are offering services for transfer of money from overseas to any remote area of the country. The payment of different utility bills through mobile bank outlets is very common. The agent banking will provide much more services to the clients.

Whether a client accesses his bank account at the agent's outlet or in a branch or at an ATM does not make any difference. Technology can enable banks and their customers to interact remotely in a trusted way through the existing local retail outlets. Customers can be issued bank cards with appropriate personal identification number (PIN)-based or biometric security features and the local store-the banking agent can be equipped with a point of service (POS) device controlled by and connected to the bank using a phone line or wireless or satellite technology. Infrastructure requirements can be further reduced by using mobile phones both to hold "virtual cards" for customers and as a POS device at the
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