Bangladesh Bank yesterday set the maximum transaction ceiling at Tk 25,000 for agent banking customers, it said in a notice. An agent banking customer will be able to make a maximum of four transactions a daytwo withdrawals and two deposits. Besides, each bank has to maintain a current account with the agent and the balance on that account may not cross Tk 10 lakh, it said. However, the limit on the transaction value will not be applicable for withdrawal of inward remittance, it added. Agent banking is a new concept in Bangladesh, but practised globally as an important distribution channel for financial inclusion through agents of the banks. BB introduced agent banking guidelines for all commercial banks in December, aiming to provide banking and financial services on a limited scale to the underserved population. Cash deposits can be collected in addition to cash withdrawals and fund transfers through agent banking. However, the ceiling will be determined and revised by BB from time to time. Other activities of agent banking include inward foreign remittance disbursement, small value loan disbursement, recovery of loans and installments, utility bill payment, cash payment under social safety net programs, and other regular banking activities. With approval from the central bank and agreements with a commercial bank, nongovernmental organizations, retail shops, micro-finance institutions, cooperative societies, post offices, and courier and mailing service companies can perform banking transactions on behalf of the bank, without charging the customers. Customers will not be charged directly by the agents for the services but banks will pay reasonable fees or commissions to their agents. However, banks may charge commissions or fees or charges applicable to its customers. All transactions need to have an insurance policy and be in only takas, according to the guideline. Agent banking transaction must take place outside the metropolitan, city corporation or municipality area.
Published: 12:00 am Tuesday, March 25, 2014
Analysis of the News: Agent Banking means providing banking services to the bank customers through the engaged agents under a valid agency agreement, rather than a teller or cashier. It is the owner of an outlet who conducts banking transactions on behalf of the concerned bank. With a view to ensure the safety, security and soundness of the proposed delivery channel Agent Banking Guidelines have been framed by the Bangladesh Bank to permit banks to engage agents subject to compliance with the guidelines. The purpose of these guidelines is to provide regulatory framework for Agent Banking which will create an enabling environment for offering financial services to the new targeted group, basically the people in the remote area. It will also ensure compliance with Anti-Money Laundering and Combating Financing of terrorism set by Bangladesh Bank. Recently Bangladesh Bank has given some directives for operating Agent Banking. It is said that every agent must have a current account with the bank concerned where maximum available deposite will be tk 1.0 million. A customer can deposit or withdraw maximum Taka 25,000 in cash each time and such withdrawal and deposit can be made maximum twice in a single day. This requirement is basically done for combating the money laundering. But this limit will not be applicable in case of withdrawal of inward remittance. No "bank related people" will be appointed as agent and agent banking will have to be conducted in rural area out of the preview of Metropolitan, City Corporation and Pourashava. The people of remote and geographically separated areas would be the target of agent banking, as the regular banking is not yet possible in that areas considering business aspects. Banks must submit sample copy of agreement to be signed with agents, business plan about agent banking including business continuity plan and guidelines approved by the board of directors about agent baking. Bangladesh Banks Payment System Department will give banks approval letters under which banks will be able to appoint agents as per its policy. For supervising the agent banking operation, the list of agents and copies of agreement and other relevant papers must be sent to Green Banking and CSR Department of the central bank. Customers should not be charged directly by the agents for providing services to them. Bank will pay reasonable fee or commission to their agents. However, the bank may charge charge commission or fee as applicable to its customers. Rational for agent banking is that reaching poor clients in rural areas is expensive for financial institutions since transaction numbers and volumes do not cover the cost of a branch. The bank, agent and client are benefited with this agent banking.