In many parts of Bangladesh, agent banking has become the face of formal finance. But behind convenience lies a growing problem: supervision on the ground has not kept pace with the system’s rapid spread, leaving customers exposed to fraud, misinformation and weak accountability.
At thousands of agent outlets across the country, banking transactions now take place far from traditional branches and direct bank oversight. While rules require regular monitoring by bank officers, field-level supervision is often irregular or absent.
Several agents and banking officials admit that this gap has created space for operational lapses and, in some cases, outright deception of customers.
Agent banking operates through local entrepreneurs appointed by banks under contractual arrangements. These agents recruit their own staff based on demand and are expected to follow bank-prescribed procedures.
In theory, nearby branches are responsible for oversight and bank officers are supposed to visit outlets regularly. In practice, such supervision is frequently limited, allowing outlets to function with minimal scrutiny.
The risk is not abstract. Bankers and agents say most problems arise not from system failures but from human behaviour at the outlet level. Dishonest employees have, in some cases, persuaded customers to hand over money with promises of higher returns, diverting funds instead of depositing them into bank accounts.
Customers who do not check transaction confirmations are particularly vulnerable. Account opening through agent banking follows the same formal requirements as branch banking. Customers must submit photographs and national identity cards for themselves and their nominees.
Farmers can open accounts with as little as Tk10, while others typically need a minimum deposit of Tk100.
Once opened, accounts allow access to nearly all routine banking services, except cheque-based cash withdrawal directly from the agent outlet.
Transactions are designed to be transparent. Deposits and withdrawals generate printed receipts and confirmation messages are sent instantly to customers’ mobile phones and, where applicable, email addresses.
Customers can also withdraw funds using ATM cards or cheques from any branch of the bank. M Sana Ullah Nizami, in-charge of the Zorarganj agent outlet of Islami Bank Bangladesh PLC in North Chattogram, said customers of a particular bank can withdraw money from any agent outlet of that bank using biometric verification.
They can also access regular services through branches and ATMs. Agents earn income through commissions on a wide range of services, including deposits, remittance payouts, RTGS transactions and card-related fees.
Deposit-related services generate the largest share of earnings, with commission rates generally ranging between one and two percent, depending on the bank.
Banks say safeguards are built into the system. Hasan Shaif Uddin, in-charge of the Sadhur Bazar agent banking outlet of BRAC Bank PLC said customers receive instant SMS alerts and printed receipts for every transaction.
Once deposited, he said, money moves directly into the bank’s system and does not remain with the agent.
Agents are also required to maintain capital, often between Tk10 lakh and Tk20 lakh, in a master account with the bank. When a customer deposits money the equivalent amount is instantly deducted from that account, limiting the scope for misuse.
Yet safeguards on paper have not eliminated risk in practice. Several agents acknowledge that weak and infrequent monitoring has led to inefficiency, arbitrary practices and in some cases, misappropriation.
Regulations require each outlet to be overseen by two bank officers, but banks rarely station their own staff at agent locations.
As agent banking becomes the primary point of contact with the financial system for millions, the cost of weak supervision is rising. What began as a solution to distance and exclusion now demands far stronger oversight.
Without strong supervision, the very system designed to bring banking closer to people risks undermining trust at the last mile.
