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Agency Banking

Agency banking plays a key role in financial inclusion. It is a contact point for bank services, particularly for those in rural regions.

Basically, an agency is a business that provides services on behalf of another business.

Usually, the agency is smaller compared to the business(es) they represent. Hence, it is the extension of a bank’s services through agencies. The persons who work for these agencies are called agents.

To become an agent, one has to be verified by the bank. This arrangement opens up a cost-efficient structure for banks to extend their services to a wider audience.

Agency banking is not necessarily the same as an agent bank.

The structure of agency banking

There are three primary members of this structure:

  • Agency
  • Bank
  • Agents


The business which manages agents on behalf of the bank to extend its services. Sometimes, agencies are structured after a one-man business.


The host of the financial services to be offered by an agency.


A representative or owner of an agency. They get to offer the following services amongst others:

  • Money transfers
  • Deposit collection
  • Printing of statements
  • Peer-to-peer loans

Agency banking vs. Agent bank

Though used interchangeably, agent bank refers to an actual bank in some cases. An agent bank can be an intermediary between a business and potential partners in a country they seek to set up.

Key Points

  • Agency banking helps banks extend their services at a lower cost
  • Agencies can be led and manned by one person
  • It isn’t necessarily the same as an agent bank.

Learn more about finance

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