Agent banking has firmly established itself as a vital conduit for financial inclusion across Bangladesh, successfully bridging the traditional divide between formal banking institutions and unbanked populations. According to the latest quarterly report released by Bangladesh Bank, the sector recorded substantial growth by the end of June, propelled largely by robust participation from rural communities.

The central bank’s data reveals that total deposits in agent banking reached 51,128 crore BDT at the close of the June quarter. Demonstrating the profound impact of this model on grassroots savings, an overwhelming 82 per cent of these deposits originated from rural areas, amounting to 42,053 crore BDT. In stark contrast, urban deposits accounted for 9,075 crore BDT, meaning that rural deposits are now nearly five times higher than those collected from urban centres.

Concurrently, credit disbursement and overall transaction volumes registered marked increases. Total loans distributed through agent outlets climbed to 12,374 crore BDT by June, up from 11,906 crore BDT at the end of March—representing a quarterly expansion of 468 crore BDT. Aggregate quarterly transactions rose by 3,564.63 crore BDT to stand at 146,188 crore BDT, compared to 142,623 crore BDT in the preceding quarter.

Expansion of Services and Account Growth

A total of 30 commercial banks were actively operating agent banking networks as of June. The total number of appointed agents increased by 239 over the three-month period to reach 15,423. Total customer accounts expanded by 758,878 to hit 27,223,081. Notably, gender parity remains a defining hallmark of this platform: female account holders numbered 13,561,507, representing almost half of the total customer base.

However, the rate of new outlet establishment experienced a mild slowdown. The total outlet count rose to 20,597 by the end of June—a modest quarter-on-quarter increase of 1.3 per cent and a marginal year-on-year growth of 0.2 per cent.

Commenting on this trend, Md Firoz Chowdhury, Head of Agent Banking at South Bangla Agriculture and Commerce (SBAC) Bank, noted that while network expansion experienced a brief deceleration due to central bank directives regarding gender representation in outlet ownership, regulatory flexibility has since been reintroduced. He expressed optimism that expansion would regain momentum, particularly as new entrants such as Citizens Bank and Community Bank join the market.

Structural Impact and Service Capabilities

Initially conceptualised following the issuance of regulatory guidelines by Bangladesh Bank on 9 December 2013, agent banking was formally launched in 2014, with Bank Asia operating as the pioneer. Dutch-Bangla Bank currently holds the leading position in the sector, followed closely by Bank Asia and Islami Bank Bangladesh.

For financial institutions, agent banking offers a low-cost operational framework compared to setting up full-fledged brick-and-mortar branches. This cost-effective model allows banks to mobilize low-cost deposits from remote regions while channeling credit into rural enterprises, thereby enhancing liquidity and accelerating rural economic growth.

Customers utilize agent outlets for a wide range of basic financial services, including:

• Opening new savings and term deposit accounts

• Cash deposits, withdrawals, and fund transfers

• Inward foreign remittance payouts

• Utility bill payments and loan disbursements or repayments

• Receipt of government social safety net allowances

Despite these extensive capabilities, operational boundaries remain clearly defined. Agents are strictly prohibited from issuing chequebooks or payment cards, clearing third-party cheques, or facilitating foreign trade transactions. Their primary revenue model relies entirely on transaction-based commissions paid by the partner banks.