agent banking 2013
TRANSCRIPT
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Guidelines on Agent Banking for the banks
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GuidelinesonAgentBankingfortheBanks
1.0 Introduction
Agent Bankingmeans providing banking services to the bank customers through theengagedagentsunderavalidagencyagreement,ratherthanateller/cashier. It istheownerofanoutletwhoconductsbankingtransactionsonbehalfoftheconcernedbank.Globally these retailersare increasinglyutilizedas importantdistributionchannels forfinancial inclusion.BangladeshBankhas alsodecided topromote this complimentarychanneltoreachtothepoorsegmentofthesocietywitharangeof financialservicesspeciallyofthisgeographicallydispersedlocations.With a view to ensure the safety, security and soundness of the proposed deliverychannelAgentBankingGuidelineshavebeenframedbytheBangladeshBanktopermitbankstoengageagentssubjecttocompliancewiththeguidelines.
2.0 Authority
Bangladesh Bank is issuing this guidelines as per authority conferred to it by Article7A(e) of Bangladesh Bank Order, 1972 and Section 4 of Bangladesh Payment andSettlementSystemsRegulations,2009.
3.0 Purpose
Thepurposeoftheseguidelinesisto:I) Provide regulatory framework for Agent Banking which will create an
enablingenvironmentforofferingfinancialservicestothenewtargetgroup.II) EnsurecompliancewithAntiMoneyLaunderingandCombatingFinancingof
Terrorism(AML/CFT)standardssetbyAML/CFTrules,regulations,guidelinesandinstructionissuedbyBangladeshBank.
4.0Scope
Scheduledcommercialbanksoperating inBangladeshshouldabidebythe instructions,proceduresetclaiddownintheguidelines.
5.0AgentBankingServices
5.1ThefollowingserviceswillbecoveredunderAgentBanking:I. Collectionofsmallvaluecashdepositandcashwithdrawal(ceilingshouldbe
determinedbythebank);II. Inwardforeignremittancedisbursement;III. Facilitatingsmallvalueloandisbursementandrecoveryofloans,Installments;IV. Facilitatingutilitybillspayment;V. CashpaymentundersocialsafetynetprogrammeoftheGovernment;
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VI. Facilitatingfundtransfer;VII. Balanceinquiry;VIII. Generationandissuanceofminibankstatements;IX. Collectionandprocessingofdocumentsinrelationtoaccountopening,loan
application,creditanddebitcardapplicationfrompublic;,X. Postsanctionmonitoringofloanandadvancesandfollowupofloanrecovery.XI. OtherFunctionslikedepositcollection,paymentofinsurancepremiumetc.XII. Saleofcropandotherinsurances
The agent's activities would be within normal course of banking business of thecommercialbanksbutconductedatplacesotherthanbankpremises/ATMbooths.6.2.Agentsarenotallowedtoprovidethefollowingservicesonbehalfofthebanks:
I.Openingofbankaccountsandissuanceofbankcards/cheques;2.Conductingmoneychangingactivities
3.Dealingloan/financialappraisaland4.Encashmentofcheques.
6.0 EligibleEntities
Thebanksmayengagethefollowingpersons/entitiesasBankAgent:
I. NGO/MFIsregulatedbyMicrocreditRegulatoryAuthorityofBangladesh;II. CooperativeSocietiesformedandcontrolled/supervisedunderCooperative
SocietyAct,2001;III. PostOffices;IV. CompaniesregisteredunderBangladeshCompanyAct,1994excludingNonBank
FinancialInstitutions;V. AgentsofMobileNetworkOperators.VI. OfficesofruralandurbanlocalGovernmentinstitutionslikeUISCVII. EducatedIndividualscapabletohandleITbasedfinancialservices,agentsof
insurancecompanies,ownerofpharmacy,chaingroceryshopsandpetrolpumps/gasstations;
7.0AgentBankingModel
Anagentcanactagentofmorethanonebankatatimebutatthecustomerendpointaretailoutletorsubagentofanagentshallrepresentandofferbankingservicesofonlyfor a single bank. The written agreements between bank and the agent should becarefullydefinedand legallyvetted. The agreements should also contain clauses related to confidentiality/safety/ soundness and accuracy of all the transactions as well. Full financial disclosure, transparency and accountability of the agent must be ensured.
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Thebankshallassignoneofitsbranchestoberesponsiblefortheagentoperatinginthedesignatedareaofthebranch.The agents are to be equipped with IT device like point of sale (POS), card reader,mobile phone, barcode scanner to scan bills for bill payment transactions, PersonalIdentificationNumber(PIN)padsandmayhavePersonalComputers(PCs)thataretobeconnectedwith theirbank'sserverusingapersonaldialuporotherdataconnections.Clientsshallusemagneticstripebankcardormobilephonetoaccesstheirbankaccountorewalletrespectively.IdentificationofcustomersshallbedonethroughaPIN/biometrics.In thecustomerend the transactionshouldbeoperating through ICTdevices thatarecontinuouslyanduninterruptedly integratedtotheCoreBankingSolution (CBS)ofthebank. The transactions should be executed on real time basis. At the end point thecustomerwillget instantconfirmationoftheirtransactionthroughvisualbasis(screenbased)orpaperbased(debitorcreditslip).Thebankshallbrandagentbankingbusinessinsuchaclearmannerthatthecustomercanrealizethattheagentisprovidingservicesonbehalfoftheparticularbank.Theagentof the concernedbank shoulddeposita fixedamountofmoneyor shouldhaveacredit limitwiththebankanduptothat level itcanmaketransactionswiththeclients. Ifany transaction is triedbeyond that levelsystemwillautomaticallystop thetransaction.
8.0RegulatoryIssues
1.WithouthavingapprovalfromBangladeshBanknobankshallbeallowedtodosuchbusiness.
2. Bankswilling to launchAgentBankingBusiness shall seekprior approval fromBangladesh Bank, with full details of the services including tentativeimplementationschedule.
3.Banksshallhavetosubmitcopiesofagreement(s)/MOU(s)signedbetweenbanksandtheirAgentstoBangladeshbankbeforelaunchingtheproduct.
4.TheAgentsshallbeselectedbythebankandalistoftheAgentswiththeirnamesandaddresses shallhave tobe submitted to thePaymentSystemDepartment(PSD),BangladeshBankandwillbeupdatedonmonthlybasisincludingchanges,additionanddeduction,ifany.
5. The inward foreign remittance (credited toNostroAccountsofBanks) transferarrangement throughdesignated agentswillbeusedonly fordelivery in localcurrency.
6.Thesystemshouldnotbeusedforanycrossborderoutwardremittanceoffunds
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7. BanksshallsubmitoverallreportonAgentBankingannuallyto itsBoardaswellastoBangladeshBank
8.BangladeshBankmaywithhold,suspendorcancelapprovalforprovidingAgentBankingservicesifitconsidersanyactionbyanyofthepartiesinvolvedinthesystemdetrimentaltothepublicinterest.
9.0ChargefortheServices
Customersshouldnotbechargeddirectlybytheagents forprovidingservicestothem.Bankshallpayreasonablefee/commissiontotheiragents.However,bankmaychargecommission/feeasapplicabletoitscustomers.
10.0AntiMoneyLaunderingCompliance
1. Banks and its partners shall have to complywith the prevailingAntiMoneyLaundering (AML)/Combating the Financing of Terrorism (CFT) related laws,regulationsandguidelinesissuedbyBangladeshBankfromtimetotime.
2. Banks shall have to follow full KYC format issued by Bangladesh FinancialIntelligenceUnit(BFIU)ofBangladeshBankfortheagentsaswellascustomersandbankswillberesponsibleforauthenticityoftheKYCofallthecustomers.
3. Banks shall ensure that suspect transactions can be isolated for subsequentinvestigation.Banks shalldevelop an ITbased automated system to identifysuspicious activity/transaction report (STR/SAR) before introducing theservices.
4. Banks shall immediately report to AntiMoney Laundering Department ofBangladesh Bank regarding any suspicious, unusual or doubtful transactionslikelytoberelatedtomoneylaunderingorterroristfinancingactivities.
11.0RiskMitigation
1.Banksshallberesponsibleformitigationofallkindsofriskssuchasliquidity,operational,fraud,cheatingincludingmoneylaunderingandterroristfinancingrisks.Technicalrisksshouldbecoveredbythesolutionprovider.
2.Thebanksmustbearalltheliabilitiesthatarisefromanyimproperactiononthepartoftheirengagedagents.
12.0TechnicalAspectsandDataSecurity:
It is anticipated that the technology currently available is able to provide adequatesecurity fortransmitting information fromagenttoconcernbanksend.Concernbankwilldevelopmechanismwhichenablestheagenttoreportanytransactionasandwhenitoccurs.
13.0AgentSelectionCriteria
BankswillingtolaunchAgentBankingBusinessshallformulateanagentbankingpolicyandget itapprovedby theBoardofDirectorsunderwhich itcanappointagents.Thebanksshouldapplyduediligencetoselectandappointagents.
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Thefollowingissuesshouldbetakenintoconsiderationforselectionofagents:1.Competencetoimplementandsupporttheproposedactivities;2.Financialsoundnessandcashhandlingcapability;3.Abilitytomeetcommitmentsunderadverseconditions;4.Businessreputation;5.Abilitytooffertechnologybasedfinancialservices;6.Securityandinternalcontrol,auditcoverage,reportingandmonitoringcapacity.
14.0.AgencyAgreement
Banks intent toprovideagentbanking servicemust sign service levelagreementwiththe agents. The agreement in addition to other conditions shall at least cover thefollowingissues: Define the rights, expectations and responsibilities of the parties entered into
agreements; Setthescopeoffeestructurelogicallyandrationally; State that this financial services are subject to regulatory review and that
Bangladesh Bank inspecting officers shall be granted full and timely access tointernalsystems,documents,reports,recordsandinterrogatestaffsoftheAgents;
State that theAgentswillnotperformmanagement functions,makemanagementdecisions,oractorappear toact inacapacityequivalent to thatofamemberofmanagementoranemployeeofthecommercialbanks;
Specify that theAgentsmustensure safekeepingofall relevant record,dataanddocuments/files forat leastsixyears;oralternately,such record isshifted to thebankat regularprespecified intervalswhichwill thenensure safekeepingof thisrecordforatleastsixyears.
Statethatallinformation/datathattheAgentscollectsinrelationtoAgentbankingservices, whether from the customers or the commercial banks or from othersources, is thepropertyof thecommercialbanks,andbankswillbeprovidedwithcopies of related working papers/files it deems necessary, and any informationpertainingtothebanksmustbekeptconfidential;and
Incorporate a condition for changing the terms of the service contract andstipulationsfordefaultandterminationofthecontract.
15.0InternalAuditandMonitoring
The banksmust formulate internal audit policy tomonitor and control agents. Theyshouldvisittheagentsoutletofficesataregular intervaltoensurethattheagentsare
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working inaccordancewith the termsandconditionsof theagreementand followingtherules,regulationsandguidelinesissuedbytheregulators.
16.0CustomerProtection
I. Thebanksshallofferproductsandservicesapprovedbytheirboardkeepingconformitywiththeguidelines.Theagentsshouldnotintroduceanyfinancialproductorserviceattheirdiscretion.
II. Thereshouldbeclearidentification/logoandnameoftheBankswithcontactaddress/telephonenumberdisplayedinavisiblemanneronthepremisesoftheretailagents/agentsservicepremises.
III. The banks shall take necessary steps to ensure that the agents/retailagents/subagentsareknowntothepublicinaspecificarea.Thelocalbranchmanagermay introduce the agent/retail agentor sub agent to the public,theiractivities.Limitationsinclearmanner.
IV. Thefees/chargesforofferingtheservicesshallbepublishedintheformofabrochureandbeavailableintheoutletsoftheagents/retailersorsubagentsforclientsuseandconsumption.
V. The banks shall take necessary steps for creating awareness among thecustomers(inlocallanguage)onagentbankingwhichmaycontaintherightsofthecustomersandsafetymeasurestomaketransactionswithagents.
VI. The banks shall have business continuity plan to ensure uninterruptedservicestothecustomersincaseoffailureorterminationofagents.
VII. If any agentworks on behalf ofmore than one bank, it shall ensure thatthere are no amalgamations/overlapping/intermixing in the database ofcustomersofdifferentbanks.
17.0 DisputeResolution
Thebankneedstoensurethatadequatemeasuresforcustomerprotection,awarenessand dispute resolution are in place. The bankmust run a call centre to receive andprocessdisputes24hoursadayviatelephone,SMS,IVRandmail.Eachofthedisputesreceivedby the centremustbe resolvedwithin 3workingdays.Banksmanagementshouldensurethattheyaresufficientlyequippedpropercontrolsare inplacetokeeptrack/logofalldisputesand reviewstatusofeachdisputesand redressalof thesamewithin stipulated time. Banks should widely publicize about the disputes/grievancesredressalmechanismsthroughelectronicandprintmedia.Thebankswillsubmitreportsregardingdisputes/grievancesand redressalof the same to theBangladeshBankataregularinterval. .