Foreign banks operating in Bangladesh almost stopped opening new branches long ago. Following suit, the local banks are now prioritising digital services over traditional branches to provide the clients with financial services, signaling a significant shift in the banking sector.
In 2023, many reputed banks refrained from opening new branches and focused on introducing app-based services and launching new digital platforms. They increasingly installed cash recycling machines (CRM) for cash transactions, instead of conventional ATMs.
The banking sector insiders are considering it as a time-befitting banking strategy.
According to Bangladesh Bank data, the number of bank branches increased by 143 in 2023, a decline from the 200 and 268 new branches opened in 2022 and 2021, respectively. Earlier, there were only 103 new branches in the coronavirus stricken year of 2020.
In the aftermath, the banking sector registered a significant slow-down in recruitments of frew manpower. The new branches opened in the previous year mostly belong to the fourth-generation banks or those seeking to address their liquidity crisis by attracting deposits through expanded branch networks.
The old banks are not so interested in opening branches, though all want to attract new clients and business. Therefore, they are engaging sub-branches and agent banking outlets.
Mutual Trust Bank MD Syed Mahbubur Rahman
Bankers believe the branches lost their appeal in the process of reaching out to the clients, given the new reality of app-based services at fingertips. People can withdraw cash using their cards at booths of all banks. These digital services also require lower operational costs than traditional branches.