Bank Asia's agent banking to be double in 2 years
In a recent interview with The Business Standard’s Tonmoy Modak, Bank Asia’s Managing Director Sohail RK Hussain discusses the bank’s strategic direction for 2025 as well as its long-term vision
Currently, Bank Asia's outstanding deposit under agent banking stands at Tk6,000 crore. The bank now aims to increase this figure to Tk20,000 crore within the next two years.
At the same time, it plans to expand its agent banking customer base from the current 7–8 million to 16–20 million over the next 2–3 years. The bank also intends to increase the disbursement of small loans through its agent banking channel. Furthermore, it plans to prioritise the retail and SME sectors within its lending portfolio.
What is the reason behind your strong deposit growth?
Whether it's deposits or loans, banks need to build a supportive ecosystem—through staff training, knowledge-sharing, and a robust compliance culture—that earns the trust of customers. At Bank Asia, we maintain governance and transparency at the highest level. Of our board's 11 members, 5 are highly qualified independent directors, exceeding the requirements of the central bank. Our management team is equally committed to compliance.
Keep updated, follow The Business Standard's Google news channel
Moreover, entities such as the SEC, Bangladesh Bank, rating agencies, and auditors closely monitor our financial health. This layered oversight reinforces our governance structure, which distinguishes us from the 10–12 banks that have failed to maintain similar standards, resulting in a trust deficit and the subsequent shift of deposits to foreign banks.
In 2024, Bank Asia was honoured with an award from the globally respected International Finance Corporation (IFC), a testament to our governance and transparency. Despite last year's volatility in the banking sector, we retained intact lines for LC confirmations and borrowing from foreign correspondent banks. Once these foundational aspects are stable, everything else—product features, staff training—naturally follows.
Our agent banking network is the largest in the country, comprising approximately 5,039 agent outlets and 32,000 micro-agents. This network facilitates monthly transactions worth Tk250–300 crore. Beyond supporting transactions, it also generates employment.
Any educated business person who meets Bangladesh Bank's conditions can open an agent outlet and earn Tk30,000–40,000 from the beginning. Even when conventional bank branches are closed, agent banking continues serving customers, showcasing the immense potential of this channel.
Do you have any targets for agent banking this year?
Agent banking is critically important to us. We aim to quadruple our agent banking portfolio over the coming years. As mentioned, we plan to raise deposits from Tk6,000 crore to Tk20,000 crore within the next two years. This is a realistic goal, provided we expand our agent network and enhance our digital offerings.
We also plan to boost small loan disbursements through agent banking. Over the past 3–4 years, we've made significant progress in this area. The structure we've implemented has proven highly effective.
The Non-Performing Loan (NPL) ratios for small loans are considerably lower than those for corporate or other types of loans. These loans are typically linked to deposits. We're placing a strong emphasis on SMEs in this segment and aim to establish long-term customer relationships.
Currently, we have 7–8 million agent banking customers. We aim to increase this to 16–20 million within the next 2–3 years. For those customers who wish to transition to full-fledged banking services, we are fully prepared to support them. Presently, we operate 131 branches, along with several sub-branches, and we are continuing to expand this network.
The central bank has advised banks to increase the number of female agents in agent banking. What's your stance on this?
Developing women entrepreneurs is not only socially impactful but also commercially viable for any bank aiming to tap into new markets. At Bank Asia, we don't follow trends—we lead them. Women represent 50% of the country's population, making this a crucial market segment.
Already, 62% of remittances are disbursed through agent banking, and of this amount, 62% goes directly to women. We're actively exploring new initiatives targeted at this demographic.
We're also considering offering free insurance to remittance recipients via agent banking, and this benefit will be extended to SME customers served through our branches as well.
I want to launch a training programme specifically designed to empower women entrepreneurs, and our board is highly supportive of this initiative. Last year, the board resolved that within three years, 50% of our portfolio would be allocated to the retail and SME sectors.
Currently, our loan portfolio stands at Tk32,000 crore, with a significant portion in the corporate sector. While we will continue lending to corporates, our growth focus lies squarely in the retail and SME segments.
Our card division is undergoing a major transformation. We are working on 62 projects to introduce features currently unavailable in the market. We are also actively integrating mobile financial services (MFS).
Our cash management team is among the best in the market. Over the past 7–8 months, it has attracted substantial deposits by offering connectivity solutions to major corporates and NGOs. In just the first two months of this year, deposits grew by approximately Tk2,000 crore. We are targeting 25% deposit growth this year.
Liquidity is a critical indicator of a bank's stability. Our Advance-to-Deposit (AD) ratio is 62—one of the best in the private banking sector—indicating a strong liquidity position.
Our Capital Adequacy Ratio stands above 16%, which is very respectable. Over the past three years, we have not defaulted on a single LC commitment—not even for a single day.
That's why we hold the largest LC line among private banks. Just a few days ago, we borrowed $35 million from the International Finance Corporation (IFC) for a term of 3–4 years. We are also expecting another $100 million from DFID—this will be the first such arrangement in the country.
What is the current state of your foreign liquidity?
Our Net Open Position (NOP) is currently positive by $50 million. Very few banks in the country can make the same claim. Our bank's LC openings have not declined; we continue to issue all types of LCs—sight, deferred, and forward.
Our offshore banking portfolio currently stands at $250 million, and we plan to increase this to $500 million by the end of the year.
Our strong relationships with a wide range of foreign correspondent banks enable us to access external funding as needed. We are also in the process of opening accounts for foreign institutions. However, this has become significantly more challenging in recent months.
The main reason for these difficulties lies in the downgraded credit rating of Bangladesh over the past 7–8 months. This is a consequence of mismanagement in the past. However, I believe that the ongoing reforms—both by Bangladesh Bank and ourselves—will pave the way for a sustainable recovery.
