What is Agent Banking?

An agent bank acts in some capacity for an alternate bank. Agent banking means giving,
saving money administrations to the bank clients through the captivated executors under a
legitimate office understanding, instead of a teller/ cashier. It is the holder of an athlete who
behaviors, managing an account transaction in the interest of the concerned bank. It can
mean any of three sorts of bank:

The bank in a credit syndicate that informs other taking part banks regarding
developments taken and changes in premium rates for an outside or down home
brewer
A bank that takes part in the MasterCard project of an alternate bank by issuing
MasterCard and performing different obligations (barring financing card receivables)
A remote bank working together in an area for its parent bank, performing such
assignments as issuing worldwide letters of credit, however not tolerating stores

Why Agent Banking?

One of the essential abstractions for giving monetary administrations to the poor through
extensions and other bank-based conveyance channels is the high expenses characteristic
in these customary saving money systems. The measure of cash consumed by money
related administration suppliers to serve a poor client with a little adjust and leading little
transactions is essentially excessively incredible to make such records practical. Also, when
monetary administration suppliers don't have branches that are near the client, the client is
less inclined to utilize and transact with their administration. On the other hand, we see the
development of new conveyance displays as an approach to definitely change the
commercial concerns of managing an account per person. By utilizing retail focuses as many
dealers (characterized here as agent banking), banks, telecom organizations, and different
suppliers can offer sparing administrations in an economically suitable path by lessening
settled expenses and urging clients to utilize the administration more regularly, accordingly
giving access to extra income sources.

Benefits of Agent banking:

Profits of Agent Banking to Agents (retail outlets):

Expanded pay through commission: Bank executors are typically recompensed

commissions at whatever point they perform transactions for the benefit of the bank.
These commissions are chiefly honored when some person stores money, withdraws
money, and when someone opens a ledger through the executor. This is a pleasant
method for creating additional salary for a retail outlet
Expanded client movement henceforth more business to the retail outlet:
Bank operators generally direct their ordinary organizations notwithstanding being
bank executors. For example a tool store those demonstrations as a bank executor
will keep leading its principle business (offer of equipment materials) notwithstanding

being a bank operator. The expanded activity realized by clients performing saving
money exercises additionally means more individuals getting to know your business
thus more deals.

Benefits of Agent Banking to the Customer:

Ease of access: With bank agents almost everywhere, you no longer need to travel
long distances to visit your bank. Your nearest retail shop could be operating a KCB
Mtaani or a Co-op Kwa jirani as they are locally known
Flexible hours: Most banks close their doors by 4pm, but with bank agents, for as
long as the business premise remains open, you can do your transactions. This has
proven to be very convenient, especially for people who are busy during the day
Cost-effective: Transacting through bank agents has proven to be cost-effective,
especially for people who live in rural areas that are far away from a ban

Benefits to the Parent Bank:

Cutting Costs: Banks are thinking that it's less expensive to set up executors
instead of opening a limb where they will because additional expenses of staffing,
rent, power and so on. With executor managing an account, the operator causes
just about all the expenses
Expanded Product entrance: Agent saving money has made it work for bank
items and administrations to enter ranges that right away appeared outlandish.
With operator keeping money banks have even arrived at the most modest of
towns
Wide client base: Bank operators pay commissions when they sign up new
clients and this has prompted a build in the amount of clients for banks. Banks
are thinking that it's powerful to expand their client numbers in this way rather
than utilizing sales representatives

Current status of Agent Banking in Bangladesh:

Bangladesh Bank offered consent to two banks to provide agent-banking services, taking the
banking sector to one stride ahead in monetary incorporation in May 29, 2014. Bank Asia
can name 30 executors and NRB Bank 20 operators to stretch out present day, keeping
money administrations to customers, as per the national bank choice. On the off chance that
the activity to give benefits through executor saving money is actualized effectively, a lot of
people little and medium ventures will feel urged to begin organizations in rustic regions. It
will goad business era and the inclination of the rustic populace to move to urban regions
will diminish. In the interest of the banks, the executors can transact money, appropriate
settlement, accumulate data for ledgers, acknowledge credit applications, transactions and
recuperate credits and accept applications for credit and check cards. Bank operators can
likewise accept service bills and international ID charges and disseminate government aid
under social security net projects. On the other hand, if the executor confers any
discontinuity, the bank will need to manage obligation, Bangladesh Bank said in an

announcement. In operator managing an account, an outsider consents to an arrangement

with the bank and gives some keeping monetary benefits straightforwardly to the customer
for the bank. As opposed to setting up extensions, the executor saving money framework
has been acknowledged in numerous nations as a method for monetary consideration, as
indicated by the announcement. Operator saving money has gotten main stream in
numerous creating nations in Asia, Africa and Latin America. Prior, Bank Asia dispatched
operator managing an account under a pilot extend by naming eight executors in
Sirajdikhan upazila, one in Louhajang and two in Srinagar in Munshiganj region. The
operators have given keeping money administrations to more than 2,000 customers.
Agent banking is an answer for giving, saving money administrations to unbanked
individuals, bring mass provincial individuals under monetary consideration, include ICT
developments, catch information through bio-metric innovation and upgrade green
engineering. A greater part of individuals live outside the formal saving money, organize and
are hence deprived of essential financial/banking services in our country. Presently, with
executor managing an account Solution, unbanked individuals can make financial balance,
make installments, store cash, gather settlement and profit each saving money office
according to Central Bank's rule. Hence, contributing more people and therefore more
money into the formal financial system which lead to overall economic growth, development
and increased stability in Bangladesh economy is the main concern of agent banking.

Strategy of national bank with respect to Agent Banking:

Bangladesh Bank is working steadily to understand the vision of "comprehensive account" to
make saving money administrations accessible for un-served and under-served family units
and undertakings. In this association, Bangladesh Bank has as of late taken one more
activity to dispatch operator managing an account and issued rules on executor putting
money on 9 November 2013 according to power presented to it by Article 7a (e) of the
Bangladesh Bank Order, 1972 and Section 4 of Bangladesh Payment and Settlement
Systems Regulations, 2009. The principle issues of these rules might be ordered under any
particular criteria and those are shown cry:

Agent banking and its charge: According to this rule the banks can give the
offices of accumulation of little esteem money store, money withdrawal, internal
remote settlement dispensing; little esteem vloan payment and recuperation of
credits, service bills installment, money installment under social wellbeing net project
of the Government, trust exchange, equalization request, era and issuance of scaled
down bank explanations, gathering and preparing of records in connection to record
opening, credit application, credit and platinum card application from open, post
assent observing of advance and advances and catch up of credit recuperation,
different capacities like store accumulation, installment of protection premium, offer
of yield and different protections and so forth to their clients. At the same time, then
again the operator is not permitted to give the administrations like the opening of
ledgers and issuance of bank cards/ checks, leading cash evolving exercises,
managing advance/ budgetary evaluation and encashment of checks. For the
qualified administrations of the executor banks clients ought not be charged
specifically by the executors for giving administrations to them. Rather, the bank

should pay sensible charge/ commission to their operators. Then again, bank may
charge commission/ expense as appropriate to its clients.
Qualified substances and their determination criteria: The NGO/ Mfi's,
Cooperative Societies, Post Offices, Non Bank Financial Institutions, Agents of Mobile
Network Operators, Offices of provincial and urban neighborhood Government
organizations like UISC, Educated Individuals proficient to handle IT based fiscal
administrations, Agents of insurance agencies, holder of the drug store, chain staple
shops and petrol pumps/ corner stores will be considered as the qualified elements as
Bank Agent. The banks ought to apply due tirelessness and a few issues, i.e.
capability, monetary soundness and money taking care of ability, business notoriety,
innovative information of fiscal administration, security, inside control, review scope,
reporting and checking limit, capacity to meet duties under unfriendly conditions
ought to be thinking seriously about for determination of executors.

Agent banking model: The rule for the executor managing an account has
recognized a standard model for numerous kinds of executor managing an account
criteria. For moderate the org issue, it is detailed in the rule that the composed
understandings between the bank, and the executor ought to be painstakingly
characterized and lawfully verified. According to this model operator can act an
executor of more than one bank at once, however, at the client end point a retail
outlet or sub operator of an operator might speak to and offer keeping money
administrations of just for a solitary bank. The bank might mark operator keeping
money business in such an agreeable way, to the point that the client can
understand that the executor is giving administrations for the specific bank. The
executor of the concerned bank ought to store an altered measure of cash or ought
to have an acknowledged limit for the bank and up to that level it can make
transactions with the customers. In the event that any transaction is attempted past
that level framework will naturally stop the transaction. The executors are to be
outfitted with IT gadget like purpose of the offer (POS), card spectator, cellular
telephone, scanner tag scanner to output bills for bill installment transactions,
Personal Identification Number (PIN) cushions and may have Personal Computers
(PCs) that are to be associated with their bank's server utilizing an individual dialup
or other information associations. Customers might utilize the attractive stripe bank
card or cellular telephone to get to their financial balance or ewallet individually, and
the recognizable proof of clients should be carried out through a PIN/ biometrics. In
the client end the transaction ought to be working through ICT gadgets that are
persistently and uninterruptedly incorporated into the Core Banking Solution (CBS) of
the bank. The transactions ought to be executed on a constant premise. At the end
point the client will get the moment affirmation of their transaction through visual
fundamental (screen based) or paper based (charge or credit slip.
Administrative issues: Without having an endorsement from Bangladesh Bank no
bank might be permitted to do executor saving money and Bangladesh Bank has the
power to withhold, suspend or drop support for giving Agent Banking administrations
whenever in the event that it considers any movement by any of the gatherings
included in the framework adverse to general society premium. Banks ready to
dispatch Agent Banking Business might look for earlier regard from Bangladesh Bank,

with full points of interest of the administrations including speculative usage plan.
The Agents should be chosen by the bank and an arrangement of the Agents with
their names and locations might need to be submitted to the Payment System
Department (PSD), Bangladesh Bank and will be overhauled on month to month
premise. Notwithstanding this the duplicates of the agreement(s)/Mou(s) marked in
the middle of banks and their Agents likewise must be submitted to Bangladesh bank
before propelling the item. At last banks might need to submit general investigate
Agent Banking every year to its Board and in addition to Bangladesh Bank. On
account of internal remote settlement (credited to Nostro Accounts of Banks)
exchange, the framework ought not be utilized for any cross fringe outward
settlement of trusts and course of action through assigned executors will be utilized
just for conveyance as a part of nearby money.
Anti money laundering compliance and risk mitigation: Banks and its
accomplices might need to follow the predominating Antimoney Laundering (AML)
/Combating the Financing of Terrorism (CFT) related laws, regulations and rules issued
by Bangladesh Bank every now and then and should need to instantly show up for
Antimoney Laundering Department of Bangladesh Bank in regards to any suspicious,
abnormal or dicey transactions identified with government evasion or terrorist
financing exercises. The banks additionally need to take after full KYC arrangement
issued by the Bangladesh Financial Intelligence Unit (BFIU) for the executors and
clients. According to the rule will be in charge of alleviation of various types of
dangers, for example, liquidity, operational, misrepresentation, tricking including IRS
evasion and terrorist financing dangers and must bear all the liabilities that emerge
from any inappropriate activity from their captivated executors. Then again
specialized dangers ought to be secured by the resultant supply.
Specialized perspectives and information security: In the rule it is expected
that the innovation right now accessible can give satisfactory security for
transmitting data from operator to concern bank's end clients. Yet, according to the
regulation concern banks need to create an instrument which empowers the executor
to report any transaction as and when it happens.
Office Ascension: Banks goal to give the executor keeping money administration
must consent to the administration level arrangement with the executors. The
assertion ought to blanket some real issues, i.e. the rights, desires and obligations,
expense structure of the gatherings entered into understandings. In the agreement it
ought to additionally be defined that operators are not permitted to perform
administration capacities and the money related administrations by they are liable to
administrative survey. Consequently executors must guarantee safekeeping of all
significant records, information, and archives/documents for no less than six years; or
on the other hand, such record is moved to the bank at general prespecified
interims. Be that as it may, all data/information that the operators gathers in
connection to executor managing an account administrations, whether from the
clients or the business banks or from different sources, will be considered as the
property of the business banks, and any data relating to the banks must be kept
secret. Notwithstanding the above criteria the assumption ought to likewise
consolidate a condition for changing the terms of the administrative contract,
stipulations for default and end of the agreed.
Inside review and checking: according to the rules of Bangladesh bank the banks
must define inner review approach to screen and control executors. They ought to

visit the operator's outlet work places at a consistent interim to guarantee that the
operators are working as per the terms and states of the understanding and after the
standards, regulations and rules issued by the controllers.
Client Protection: The operator keeping money confronts numerous difficulties and
dangers i.e. absence of privacy and security, issues of extortion and so on. Keeping in
mind the end goal to ensure the client from those troubles Bangladesh Bank has
recognized some significant client assurance issues in their rule. For the client
insurance the banks might offer items and administration's sanction by their board
keeping congruity with the rules and the executor won't be permitted to make any
fiscal item or administration at their watchfulness. The banks should make
fundamental moves to guarantee that the executors/retail operators/sub operators
are known to general society in a particular range. There ought to be clear
distinguishing proof/logo and name of the Banks with contact location/phone number
showed in an unmistakable way on the executor's administration premises. The
nearby limb chief may additionally present the operator/retail/sub executor to
general society. The banks should have business coherence plan to guarantee
continuous administrations to the clients in the event of disappointment or end of
operators and if any operator deals with the benefit of more than one bank, it might
guarantee that there are no covering in the database of clients of diverse banks.
Then again the expenses/charges for offering the administrations should be
distributed as a leaflet and be accessible in the outlets of the executors for
customer's utilization and utilization.
Debate determination: The bank needs to guarantee that sufficient measures for
client assurance, mindfulness and question determination are set up. The bank must
run a call focus to accept and methodology debate 24 hours a day through phone,
SMS, IVR and mail. Each of the debate gained by the middle must be determined
inside 3 working days. The banks have submitted reports in regards to
debate/grievances and Redressal of the same to the Bangladesh Bank at a normal
interim and additionally need to advertise it through electronic and print media.

References:

http://www.erainfotechbd.com/agentbanking.php
http://www.thedailystar.net/business/bank-asia-nrb-bank-get-approval-for-agentbanking-26341
https://www.google.com.bd/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=0CD4QFjAF&url
=http%3A%2F%2Fwww.infosys.com%2Ffinacle%2Fsolutions%2Fthought-papers
%2FDocuments%2Fagency-banking-newfrontiers.pdf&ei=mbCtU_DsHIq4uASMsILYDQ&usg=AFQjCNEfcc8fEeiU_9PhEuzgh3SzyamEA&bvm=bv.69837884,d.c2Ewww.punchng.com/business/ambusiness/taking-advantage-of-opportunities-of-agency-banking/
https://docs.gatesfoundation.org/Documents/agent-banking.pdf

 http://www.kenyaplex.com/resources/5846-benefits-of-agent-banking-in-kenya.aspx
http://www.bangladeshbank.org/aboutus/regulationguideline/psd/agentbanking_banks_v13.pdf
http://www.investopedia.com/terms/a/agent-bank.asp
http://dblsecurities.com/business-news/agent-banking-allowed-by-bangladesh-bank
https://docs.gatesfoundation.org/Documents/agent-banking.pdf
http://www.punchng.com/business/am-business/taking-advantage-of-opportunities-ofagency-banking/