Pandemic has buffed and shined great potential of Agent banking
The ongoing pandemic, no doubt, has been a sucker punch to both lives and livelihoods like no other in recent memory. But, amidst the catastrophe, there are a few bright spots. And one such bright spot has been the lenders’ agent banking window, which has been in operation since 2016. If harnessed well, the digital banking channel — thanks to its reach to the remotest parts, where banks have not set their foot in yet — can make it an important cog in the wheels of the economic locomotive that would pull the country out of the ongoing crisis. It could help lenders give out loans and mobilise deposits in tandem in the days ahead. As of March, accounts in the agent banking platform, where 22 banks now give banking services to people, stood at 64.97 lakh accounts, which is more than double that from a year earlier, according to data from the central bank. Deposits soared 129 per cent year-on-year to Tk 8,535 crore at the end of March, while loan disbursement grew 306 per cent to Tk 853 crore. The central bank issued agent banking guidelines in 2013 as part of its effort to bring the unbanked population under the banking umbrella to widen the financial inclusion. Before that, the Bangladesh Bank took a wide range of financial inclusion programmes to take banking services to farmers, marginal people and the extreme poor. They were allowed to open accounts with an initial deposit as low as Tk 10. As of March, the total number of accounts, which could be opened with deposits ranging from Tk 10 to Tk 100, under the programme stood at 2.13 crore and aggregate deposits Tk 2,385 crore. By 2021, the lender hopes to disburse at least Tk 2,000 crore in loans through the window. Agents are also encouraged to expand their business as banks provide them with a hefty amount of commission for their services. For lending, agents enjoy a commission of 1 per cent of the sum; for bringing in deposits, they get 2 per cent the sum; and for remittance, they get Tk 50 for per payment. Branch-led banking will lose its importance gradually due to the growing popularity for virtual banking, said Abul Kashem Md Shirin, managing director of Dutch-Bangla Bank (DBBL). Lenders have to spend at least Tk 5 lakh to 7 lakh per month to operate a branch. Besides, banks now spend less amount of funds to collect deposit through the agent banking window than their branches. This is applicable for lending as well.
Banking sector dominates the turnover chart
Stocks broke the five-day losing streak on Monday as the buoyant investors showed their buying binge on major sectors’ issues at the lowest possible prices amid the floor price system. The market opened on positive note and remained upbeat throughout the session as investors showed buying spree on sector specific stocks after five-day price fall. DSEX, the key index of the Dhaka Stock Exchange, went up by 19.50 points or 0.48 per cent to settle at 4,050, after losing 49 points in the past five straight sessions. Two other indices also edged higher. The DS30 index, comprising blue chips, advanced 8.04 points to finish at 1,364 and the DSE Shariah Index rose 5.06 points to close at 944. Market operators said investors showed buying appetite on the selective issues riding on optimism owing to gradual reopening of the economy and revival of some specific sectors’ activity. Turnover, another important indicator of the market, remained low and amounted to Tk 2.40 billion on the country’s prime bourse, which was 2.56 per cent higher than the previous day’s turnover of Tk 2.26 billion. The banking sector dominated the turnover chart, grabbing 25 per cent of the day’s total transaction, followed by general insurance with 20 per cent and pharmaceuticals 18 per cent. Most of the shares remained stuck at the trading. Of the issues traded, 203 remained unchanged while 113 issues advanced and 17 declined on the DSE floor. The Chittagong Stock Exchange also ended higher with its All Shares Price Index (CASPI)-advancing 62 points to close at 11,577 and the Selective Categories Index – CSCX -gaining 37 points to finish at 7,016. Of the issues traded, 66 gained, 15 declined and 97 remained unchanged on the CSE. The port city bourse traded 2.13 million shares and mutual fund units with turnover value of Tk 63 million.
India to reduce number of state-owned banks to five
India is looking to privatise more than half of its state-owned banks to reduce the number of government-owned lenders to just five as part of an overhaul of the banking industry, government and banking sources said. The first part of the plan would be to sell majority stakes in Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank, leading to an effective privatisation of these state-owned lenders, a government official said. The government is working on a privatisation plan to help to raise money by selling assets in non-core companies and sectors when the country is strapped for funds due to lack of economic growth caused by the coronavirus pandemic. Several government committees and the Reserve Bank of India have recommended that India should have not more than five state-owned banks. India expects bad loans at its banks could double after the crisis brought the economy to a standstill. Indian banks already had 9.35 trillion rupees ($124.38 billion) of soured loans, equivalent to about 9.1% of their total assets at the end of September 2019.
National Fisheries Week begins today
The National Fisheries Week will begin in the country today (Tuesday) with the aim of conserving and developing the country’s fisheries resources and creating awareness among mass people to boost fish production. Prime Minister Sheikh Hasina is scheduled to officially inaugurate the programme by releasing fishes at a lake of Ganabhaban tomorrow (Wednesday), the second day of the fisheries week. The slogan of this year’s fisheries week is “Machh Utpadon Briddhi Kori, Sukhi Somriddho Desh Gori” (Let’s Increase Fish Production, Build a Happy and Prosperous Country), according to a statement of the Ministry of Fisheries and Livestock. On the occasion, the ministry has chalked out different programmes at central, district and upazila level. District, hill district and upazila committees have been formed to implement the field-level programmes. To mark the week, government will decorate important street islands of Dhaka city with banners and festoons. The fisheries week will end on July 27.
Prime Bank wins Euromoney award
Prime Bank Limited has earned international recognition as Asia’s one of the best in its proactive response to COVID-19 pandemic. London-based reputed media publication, Euromoney, has conferred ‘Excellence in Leadership in Asia 2020 Award’ to Prime Bank in recognition of the bank’s large scale initiative to safeguard interests of the customers and safety of the employees in the wake of COVID-19. Euromoney’s Awards for Excellence are the awards that matter to the banks and bankers who matter. More than 1,000 corporate organizations from five continents vie for the international accolade.
EBL to get $40m from German, Dutch lenders
Eastern Bank Ltd (EBL) has recently signed a term loan agreement for $40 million with German Investment Corporation – DEG and Netherlands Development Finance Company – FMO. DEG-FMO will fund EBL in foreign currency to provide financing to corporate, green businesses and SME customers at competitive pricing, the bank said in a statement. The funds will be routed through EBL’s offshore banking. EBL as a leading bank in Bangladesh continues funding infrastructural, sustainable and environment focused projects nationwide through strong support from major development finance (DFI) partners, including DEG andFMO.