Agent Banking for Bangladesh
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VOL 20 NO 157 REGD NO DA 1589 | Dhaka, Thursday, March 28 2013 | http://www.fe-bd.com/index.php?ref=MjBfMDNfMjhfMTNfMV85Ml8xNjQ1NzA= | Bangladesh Bank mulls agent banking for financial inclusionM S Siddiqui
Agent banking is a financial service offered to customers by a third party on behalf of a financial institution (FI). An agent is an entity that is engaged by an FI to provide specific financial services on its behalf using the agent's premises.
It is an additional delivery channel that can enhance the convenience, the outreach of quality and affordable financial services, particularly to the underserved, in a more cost-efficient manner. Such an arrangement is a cheaper way for FIs to reach out to the underserved population.
The use of the term 'agent' is not necessarily a reference to an agent in the traditional legal sense of a party authorised by a principal to act on the principal's behalf and for whom the principal is liable with respect to activities taken by the agent within the scope of its agency relationship or contract. An agent is any third party acting on behalf of a bank, whether pursuant to an agency agreement, service agreement, or other similar arrangement. In most countries, the principal banker is liable under a law for the actions of its agents, whether such actions are explicitly or implicitly authorised. Liability for the actions of a non-agent entity acting on behalf of the bank may be different and will often depend on the contractual agreement. However, a bank's liability (whether by law or contract) for third-party actors will likely impact the bank's policies and procedures, which will in turn impact the superviser's oversight of the bank.
The Bangladesh Bank has many recent projects for inclusive financial packages to reach out to non-bankable citizens. Achieving financial inclusion therefore requires innovative business models that dramatically reduce costs for everyone and thus pave the way for profitable extension of
VOL 20 NO 157 REGD NO DA 1589 | Dhaka, Thursday, March 28 2013 | http://www.fe-bd.com/index.php?ref=MjBfMDNfMjhfMTNfMV85Ml8xNjQ1NzA= | Bangladesh Bank mulls agent banking for financial inclusionM S Siddiqui
Agent banking is a financial service offered to customers by a third party on behalf of a financial institution (FI). An agent is an entity that is engaged by an FI to provide specific financial services on its behalf using the agent's premises.
It is an additional delivery channel that can enhance the convenience, the outreach of quality and affordable financial services, particularly to the underserved, in a more cost-efficient manner. Such an arrangement is a cheaper way for FIs to reach out to the underserved population.
The use of the term 'agent' is not necessarily a reference to an agent in the traditional legal sense of a party authorised by a principal to act on the principal's behalf and for whom the principal is liable with respect to activities taken by the agent within the scope of its agency relationship or contract. An agent is any third party acting on behalf of a bank, whether pursuant to an agency agreement, service agreement, or other similar arrangement. In most countries, the principal banker is liable under a law for the actions of its agents, whether such actions are explicitly or implicitly authorised. Liability for the actions of a non-agent entity acting on behalf of the bank may be different and will often depend on the contractual agreement. However, a bank's liability (whether by law or contract) for third-party actors will likely impact the bank's policies and procedures, which will in turn impact the superviser's oversight of the bank.
The Bangladesh Bank has many recent projects for inclusive financial packages to reach out to non-bankable citizens. Achieving financial inclusion therefore requires innovative business models that dramatically reduce costs for everyone and thus pave the way for profitable extension of