Online Desk: Agent banking in August this year witnessed a remarkable surge in loan disbursement compared to the previous month, while two other key banking indicators – deposit collection and remittance inflow – did not fare well, reflecting economic constraints mostly in rural Bangladesh and the price pressure village people are now facing.

Loan disbursement through agent banking surged by 24.12 per cent in August this year to over Tk 8.43 billion from July’s Tk 6.79 billion, according to the latest data of the Bangladesh Bank (BB).

With deposit collections hovering at Tk 347.77 billion, August registered a mere 1.5 per cent uptick in deposit growth compared to July’s Tk 342.64 billion.

But the crucial remittance inflow took a massive 36.44 per cent hit to plummet to Tk 19.77 billion from July’s over Tk 31.09 billion, according to BB data.

Syed Mahbubur Rahman, the managing director and chief executive officer (CEO) of Mutual Trust Bank (MTB) Limited, highlighted the challenges faced due to the current economic scenario, where people struggle to make deposits due to financial constraints.

This situation, he said, has affected the growth of deposited funds in agent banking.

Regarding lower inward foreign remittances, the MTB CEO suggested that the government should focus on strengthening law enforcement measures to curb money transactions by Bangladeshi migrants through illegal hundi.

Agent banking services were formally introduced in Bangladesh in 2014, spearheaded by Bank Asia and Agrani Bank. Subsequently, banks have extended these services to the union level, broadening their accessibility and impact across the country.

The MTB CEO said while banks are seen as entities collecting money from people, the real impact comes from providing loans through agent banking.

According to Syed Mahbubur Rahman, by curbing money transactions by migrant workers through informal channels, the flow of legitimate remittances could be increased, benefiting the overall economy.

According to the central bank data, some 15,671 agents were deployed with 21,559 outlets in August, while it was 15,574 agents with 21,399 outlets in July.

In August, there were 2,465 agents operating in urban areas and 13,206 agents in rural areas. This marked an increase from July when there were 2,418 agents in urban areas and 13,156 agents in rural areas.

In August, there were 18,486 outlets in rural areas and 3,073 outlets in urban areas, reflecting an increase from the previous month when there were 18,400 outlets in rural areas and 2,999 in urban areas.

The total number of accounts up to August was 20.45 million while they were 20.15 million in July.

In August, the number of female accounts reached 10.15 million while male accounts totalled 9.98 million. This shows an increase from July when there were over 10 million female accounts and more than 9.84 million male accounts.

In August, agent banking services facilitated the payment of electricity, gas, and water bills amounting to Tk 1.36 billion, compared to Tk 1.13 billion in July.