Prudential Guidelines for Agent Banking Operation in Bangladesh

Agent Banking: 

In exercise of the powers conferred to Bangladesh Bank in Section 45 of the Bank-Company Act, 1991 (Act no. XIV of 1991), the following guidelines are hereby made:



  1. Short Title These guidelines may be called as the “Prudential Guidelines for Agent Banking Operation in Bangladesh”.
  2. Interpretations As used in these Guidelines, the following terms shall have the meanings indicated below unless the context clearly indicates otherwise:

2.1. “Agent” means master agent, and/or unit agent.

2.2. “Agent Banking” means the business of providing banking services through agent’s network.

2.3. “Agent Banking Outlet” means an entity which will work independently as unit agent or under the supervision of a master agent and run the agent banking activities in a specific location at the customer end point.

2.4. “Bank” means a bank-company as per section 5(Y) of the Bank-Company Act, 1991.

2.5. “Banking Services” means services that a bank may offer as per section 5(Z) and 7 of the Bank-Company Act, 1991.

2.6. “Juristic Person” shall refer to an entity (other than a natural person) created by law as a legal entity having distinct identity, legal personality, duties and rights.

2.7. “Master Agent” means an entity having branch offices or outlets, either owned or otherwise engaged legally by it, that has been contracted by a bank to provide the services in a manner specified in the Guidelines.

2.8. “Outlet” means an agent banking outlet.

2.9. “Support Service Provider” means an entity contracted by a bank for providing technological solutions and/or other support services (Liquidity Management, Transportation and Security) to its agent banking services.

2.10. “Unit Agent” means an entity that has been contracted by a bank to provide the banking services in a single agent banking outlet in a manner specified in these Guidelines.

2.11. Other terms used in these Guidelines will assume the same meaning as in the BankCompany Act, 1991.

  1. Application The Guidelines shall apply to the banks and any other entities engaged in agent banking in Bangladesh.



  1. Purpose Agent banking is a system of providing limited scale banking services to the underserved population through engaged agents under a valid agency agreement, rather than a teller/cashier. Bangladesh Bank has decided to promote this complimentary channel to reach out to the unbanked and underserved segments of the society as well as existing bank customers with a range of banking services especially to geographically dispersed locations. With a view to ensuring the safety, security and soundness of the proposed delivery channel, “Prudential Guidelines for Agent Banking Operations in Bangladesh” have been framed by Bangladesh Bank to facilitate banks to engage in agent banking. The purposes of these Guidelines include:

4.1. Establish agents as a channel for delivering banking services in a cost effective manner;

4.2. Outline activities which can be carried out by an agent as well as provide a framework for offering branchless banking services;

4.3. Increase outreach of the banking services and promote financial inclusion within a safe and sound financial system environment; and

4.4. Serve as a set of minimum standards of data and network security, customer protection and risk management to be adhered to the branchless banking services.


  1. Engagement in Agent Banking Activity

5.1. Banks willing to offer banking services through agent banking operation shall obtain prior approval from Bangladesh Bank. Banks also have to take prior approval for new agents and agent banking outlets separately. Banks shall ensure that all policies and procedures relating to its agent banking activity are in place.

5.2. Banks having license for Islamic Shariah based banking services will be allowed to provide Islamic Shariah based banking services through their agent network.

5.3. Bangladesh Bank will assess the bank’s overall performance as well as specific performance, valuate the bank’s capacity to conduct agent banking, financial inclusion priorities and do due diligence before giving the approval.

5.4. Banks shall commence its agent banking operation within 3 (three) months of getting approval from Bangladesh Bank. Bangladesh Bank, considering the application of the bank, if any, may extend the commencement time for another 3 (three) months. Banks shall notify commencement of services to Banking Regulation and Policy Department (BRPD) and Financial Inclusion Department (FID) of Bangladesh Bank.

  1. Letter of Application Banks intending to start agent banking operation shall conduct a prior study and shall apply for approval (as per Annexure-
  2. A) to General Manager, Banking Regulation and Policy Department (BRPD), Bangladesh Bank, Head Office, Dhaka in its letter head pad along with Annexure-B & C. While applying for approval of new agents and/or agent banking outlets, banks shall furnish data about the proposed agents/outlets (as per Annexure-C), on business performance (Annexure-D) and expansion plans on agent banking and facts describing the status of compliance of the instructions of these Guidelines.
  3. Documents Required Following documents and reports are to be submitted along with the application:

7.1. A report assessing the risks associated with agent banking operation and the measures to be adopted to mitigate the risks;

7.2. A report containing the opinion of an independent audit team regarding the adaptation of internal control policy for agent banking operation;

7.3. A tentative implementation schedule with full details of the services; and

7.4. Policy for agent banking operation approved by the board of directors of the applicant bank. The policy should address the following areas:

7.4.1. Policies related to agent selection, management and training; as well as monitoring operations, compliance, conduct and quality of the services provided;

7.4.2. Customer due diligence, customer protection measures including regularly initiated mass awareness and financial education strategies;

7.4.3. Infrastructure to support agent banking including system and technological requirements;

7.4.4. Internal controls and monitoring to ensure compliance with relevant legislation and regulatory requirements;

7.4.5. Business Continuity Plan (BCP) and contingency arrangements, with specific timeframe, to ensure continuity of agent banking services in the event of disruption;

7.4.6. Internal audit and monitoring manual for agent banking operation as approved by the board of directors;

7.4.7. Business plan for agent banking operation as approved by the board of directors;

7.4.8. Detailed information (organizational history, financial strength, IT infrastructure, management structure, planned geographical and economic service areas) of agents;

7.4.9. Draft of agreement(s) between bank and agent. The draft must be vetted by the legal retainer of the bank;

7.4.10. Anti-Money Laundering/Combating Financing of Terrorism policies and procedures;

7.4.11. Agent training manual;

7.4.12. Proposed financial literacy and education activities by the banks; and

7.4.13. A feasibility study of the global view of future operations and development of the agent banking operation for a minimum period of 3 (three) years from the date of the application including: Geographical and economic service areas of the proposed agents; Total population and economically active population of the areas where they will operate; Analysis of the relevant market over the past 2 (two) years, along with an estimate of the proposed agents’ volume of transactions in the banks’ delivery channel strategy; Financial projections on the share of the proposed agents in the banks’ business; and Security management manual for agent premises: Provided that Bangladesh Bank may withhold, suspend or cancel approval for providing agent banking services if it considers any action by any of the parties involved in the system is detrimental to the public interest or contradicts any Law/Regulation of the country. Banks that are currently conducting agent banking operation with approval from Bangladesh Bank shall also prepare/update the documents stated herein and submit a copy to BRPD within 6 (six) months of the issuance of these Guidelines.

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Prudential Guidelines for Agent Banking Operation in Bangladeshguide line of agent bank ref BB

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