The monthly loan disbursement by banks through their agent banking windows exceeded the Tk 100-crore mark in August after seven years of the launch of the service.
Bangladesh Bank officials said that the central bank’s pressure on banks to attach equal importance to credit issuance as they were deploying for deposit mobilisation through the windows in the rural areas contributed to the growth.
As per BB data, banks disbursed Tk 107.4 crore to their customers through the agent banking service in August. The amount included Tk 61.2 crore in the rural areas and Tk 46.2 crore in the urban areas.
The disbursed amount is Tk 12.5 crore higher than the Tk 94.9 crore released in July.
Banks’ credit issuance through their agent banking windows was only Tk 17.8 crore in August, 2019.
Bangladesh Bank general manager (financial inclusion) Md Anwarul Islam told New Age that it was a good sign that banks had started raising credit issuance through their agent banking windows.
It’s vital not to limit the agent banking windows only to deposit mobilisation for banks rather the banks should also use the arms for issuance of credit, Anwarul said.
Resources would flow towards the urban areas if banks remain reluctant to issue credit to people in the rural areas through their agent banking windows, he said.
Taking the issue into consideration, the central bank has recently instructed banks to emphasise credit issuance by their agent banking windows, the BB official said, adding that banks were also using the windows to bring women in the rural areas under the financial network.
Though the loan disbursement increased in the last couple of months, the percentage of credit issuance still remained as low as 8.83 per cent of the total deposit collection through the windows.
Besides the BB pressure, banks have been putting extensive focus on cost-efficient business model, leading them to focus on agent banking, among others, said bankers.
The outbreak of coronavirus by early this year also diverted their focus from branch-centric operation model, they said.
In August, banks collected Tk 1,215.9 crore in deposits from agent banking.
It takes around seven years for the banks to reach Tk 100 crore in monthly credit issuance after the launch of the service in 2013 by the central bank.
Bank Asia was awarded the first agent banking licence in the country and the central bank has so far issued licences to 28 banks to run the service.
Of the banks, 23 are providing the service to their customers while the rest three are yet to launch their agent banking operations.
Since the launch of the service, the banks which have launched the service have fetched Tk 12,004.1 crore in deposits from their customers.
Of the deposits, Tk 9,046.5 crore, representing 75.36 of the total deposits, was collocated from the rural areas while the rest Tk 2,957.6 crore, representing 24.64 per cent of the total deposits, was mobilised from the urban areas.
In terms of deposit collection, Islami Bank Bangladesh held the highest share followed by Dutch-Bangla Bank, Bank Asia, Al-Arafah Islami Bank and Agrani Bank.
The number of agent banking accounts stood at 79.19 lakh in August. Of the accounts, 61.31 lakh accounts were in the rural areas and another 17.88 lakh in the urban areas.
The BB data also showed that the number of agents of the banks increased to 9,627 across the country while the number of outlets increased to 13,394 as of August.
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