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Bank Asia eyes agent banking-driven expansion

A massive change has happened in the banking sector.Based on the theme of financial inclusion and all banks are now thinking of working for the masses.Being a pioneer of agent banking. Bank Asia has established the largest agent banking network with over 3,200 outlets opened across the country in the last five years.

The bank now wants to expand its business using this huge network. It wants to shift from branch banking to agent-based banking in the next five years. The mini-banking concept will help the bank minimise maintenance costs of traditional branches.And provide low-cost financial services to people in the remote areas.

“In the next five years, we want to expand our banking business based on the agent banking network,” Md Arfan Ali, managing director of Bank Asia, told The Business Standard in an interview marking the bank’s 20-year journey.

Bank Asia introduced agent banking in 2014, and has started making profits on a small scale since the beginning of this year.They have set a target to earn Tk5 crore in profits from agent banking this year. And they explored the full potential of agent banking. It will not only be used for deposit collection but also for lending.

Agent banking is a very effective, useful and low-cost banking service.The bank did its experiment with small-scale lending. So now they are planning to go for lending on a big scale through the agent banking network.

Agent banking would be the main driving force to expand the rural banking business. They are recruiting more people who have experience in micro-finance to shift to rural banking business from corporate banking.

Agent banking was introduced in Bangladesh in 2013 through a guideline issued by the Bangladesh Bank. The purpose of introducing agent banking was to provide a safe and secured alternative delivery channel for banking services to the under-privileged, under-served population who generally live in a geographically remote location and beyond the reach of the traditional banking network.

This has allowed the banks to expand their business and accelerate financial inclusion using intermediaries as agents. A limited number of banking services is provided to the customers through an agent of a bank and this method is gaining popularity as a cost-effective delivery channel to the bank as well as a convenient way of getting banking services to the customers.

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