Oct registers downswing in deposits

SAJIBUR RAHMAN | Published: December 29, 2023 23:12:02

School banking account deposits continued to drop in October of the outgoing calendar year 2023, suggesting stagnation in the growth of these accounts.
The volume of deposits stood at Tk 22.02 billion in October, while it was Tk 22.32 billion in September, according to the central bank data.
In August, a total of Tk 22.85 billion was deposited in 3.90-million school banking accounts under the scheduled banks across the country.
However, the number of accounts rose to 3.95 million in October. It was 3.93 million in September this year.
In a bid to enhance financial literacy and foster widespread financial inclusion, the Bangladesh Bank introduced the school banking initiative in 2010.
School banking deposits saw 20-per cent growth in one year during the Covid-19 pandemic, disclosed the data.
Fifty-five banks have so far embraced this programme empowering students aged 11-17 to open accounts.
This scheme aims to cultivate a culture of savings among pupils while honing their money-management skills.
These specialised accounts offer multiple benefits, including fee waivers, complimentary internet banking services, reduced minimum balance prerequisites and affordable access to debit cards.
Notably, these accounts can be activated with a modest initial deposit of Tk 100 only.
School Banking activities encourage students (below 18 years) to develop their savings behaviour.
According to the BB data in October 2023, there are considerably more male student accounts than female student accounts.
A total of 2.06 million accounts belong to males, whereas 1.89 million accounts belong to females.
Zafar Alam, managing director and CEO of Social Islami Bank Ltd, said inflationary pressure on fixed and lower-income groups could potentially lead to a decrease in deposits in school banking.
Additionally, he highlighted that many banks faced challenges in executing their campaigns as anticipated towards the end of the year.
Mr Alam, however, expressed optimism that there would be a positive upswing in the deposit trend for school banking in the upcoming days.
Furthermore, his bank has posted an increased deposit trend in this sector, attributed to the introduction of new and innovative products 'SIBL EduPay'.
The bank launched the service for collecting tuition fee and other fees of educational institutions (school, college, university, madrasa, coaching centre and any other educational entity), added Mr Alam.
Dr Mustafizur Rahman, a Distinguished Fellow at the Centre for Policy Dialogue (CPD), said school-banking growth might experience an upturn once the ongoing inflation is tamed in the near future.
Banks' sustained and intensified efforts across the country might contribute to maintaining steady growth in the school-banking sector, he observed.
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