Banks are turning to machines instead of branches

Foreign banks operating in Bangladesh have almost stopped opening new branches long ago. Now local banks are also walking the same path. Because banks are now choosing digital medium instead of branches to provide services. As a result, the infrastructure of banking services is changing.

Many good banks also did not open any new branches in 2023 However, they continue to introduce app-based services and new digital infrastructure to enhance services and customers For example, these banks have installed new cash recycling machines (CRMs) instead of ATMs for cash deposits and withdrawals. At present, this is the right way to be considered by those associated with the banking sector.

According to Bangladesh Bank, the number of bank branches increased to 143 in 2023. Earlier, 200 new branches were opened in 2022 and 268 in 2021. Earlier in 2020, 103 branches were opened due to the Corona outbreak. As a result, recruitment of new manpower has decreased in banks. Most of the banks that opened branches last year are fourth generation, i.e. new banks. Besides, some banks facing liquidity crisis are trying to attract deposits by increasing their branches.

Bankers say the need to open branches to reach customers has reduced. Customers can take service through the app at home. If you need cash, you can withdraw money from any bank booth using the card. If the service is provided through these channels, the cost of the banks is much lower than the cost behind the branch. All in all, branch opening will decrease further in the coming days. Then banks will insist on setting up sub-branches, CRM devices in different areas to make their presence known.

Banks now offer branches as well as sub-branches, account opening through agent banking, cash deposits and withdrawals, loans and other services. Also, cash can be deposited and withdrawn through the card at ATMs and CRM machines. Apart from this, many customers are now doing banking transactions through online banking and apps.

According to the data of the Central Bank, the total number of domestic and foreign bank branches in the country was 10,568 in 2019, which increased to 10,671 in 2020. In 2021 it increased to 10 thousand 939 and 11 thousand 139. In 2022. And in 2023, the bank's branches have increased to 11 thousand 284.

It is observed that Prime Bank, The City Bank, Eastern Bank Limited (EBL), BRAC Bank, Mutual Trust Bank (MTB) have not opened any new branches in 2023. However, the number of sub-branches and deployment of CRM tools has increased. . Prime Bank had 146 branches in 2022, which remained the same. City Bank branches, now 133, have also not increased. As of 2022, MTB has 119 branches and BRAC Bank has 187 branches.

Islami Bank also did not increase any branches in 2023. The bank now has 394 branches. However, last year the bank increased the number of sub-branches from 228 to 249. Besides, the number of agent banking services increased from 2 thousand 694 to 2 thousand 771.

Dutch-Bangla Bank opened 5 branches last year due to different business models. Bank branches have increased to 243. Also, this bank is leading in agent banking services and ATM/CRM devices. Pubali Bank opened 6 branches last year, increasing their branches to 504. Apart from this, state-owned Sonali Bank has opened 3 branches, Agrani Bank 6 branches and Janata Bank 6 branches. New banks are opening branches though.

The Managing Director (MD) of two new generation private banks told Prothom Alo that all departmental and big district cities cannot work without bank branches. People don't know about banks. For this they are not looking at the option of opening a branch yet. But this is not applicable to old banks.

Mutual Trust Bank (MTB) MD Syed Mahbubur Rahman told Prothom Alo, 'The old banks are not very interested in opening branches. But all banks are keen to grow new customers and business. For this sub-branch and agent banking is being used. Banks like us are trying to grow their business by taking on financial technology companies. It is possible to provide service with 3 skilled manpower instead of 10 people. There is no compromise on service fees.

A different picture is digital infrastructure

While banks have been slow to open branches, growth in digital infrastructure has seen just the opposite. Every bank has launched digital products by 2023. Some banks have launched services to open accounts, make deposits, submit loan proposals from home through apps. Some banks have also started the process of opening letters of credit (LC). Banks are turning to ATMs as well as CRM tools Because, it has the facility of depositing and withdrawing money in one device. Already some banks including Pubali, Dhaka, City, Islami Bank have started the process of converting ATM booths into CRM booths. For this, all banks are gradually shutting down Cash Deposit Machines (CDM).

In 2022, there were 13 thousand 367 ATMs in the country, increasing to 13 thousand 436 by the end of 2023. At the same time, the number of CRM devices increased from 2,489 to 4,35. There were 1,940 CDM devices in 2022, up from 263 at the end of last year. Customers can deposit and withdraw money using one bank's card at another bank's machine

Syed Mahbubur Rahman said, 'Now all banks are seeing good potential in CRM tools. Because deposit and withdrawal facilities are combined in one device. This will reduce the pressure on the bank branch. Dependence on bankers for banking services will decrease in coming days. And many more services will be available in the machine.