School banking: Pragmatic initiative to develop savings habit of learners

Md Khairul Hasan In our childhood we hoarded paisa or Taka in earthen bank, little pot, pillow, bamboo hose and any other secret place. We used to save a little amount of money by cutting our tiffin cost and educational expenses. We were sometimes given money as gift on various occasions like Eid, puja, boishaki fair and birthday celebrations. We saved a little portion of that money for our own belongings. We were not acquainted with today's modern banking system to save our little income. The school banking programme was launched in our country with a view to bringing our kids under banking net to help them contribute to economic activities through little savings. The scheme not only plans to help students and parents with a sizeable amount of savings after a certain period, it also aims to encourage the savings habit of students from their early age. The scheme will teach kids money management skills that may be useful for the rest of their lives. Through the programme, kids can do banking at school, with a hands-on banking experience in a simple way. School banking is not new in Bangladesh. Some banks, including Muslim Bank, introduced a school banking programme in the 1960s, but it did not last long. It was some time before AB Bank (formerly Arab Bangladesh Bank) launched the service in Sunshine Grammar School in Chittagong in 2003. But, that too did not work. Finally, school banking got renewed impetus when the central bank issued the formal circular in late 2010. Now, 21 banks have already introduced school banking. Another 24 are in the pipeline to open the scheme soon. Any student, aged between 5 and 17 years can open an account with any bank supporting the service. The account can also be opened at ease with two copies of photographs of the account holder and one copy of photograph of parent of legal guardian, one copy passport sized photograph of each nominee, photocopy of student's ID card duly attested by the head of the institution and photocopy of last paid pay slip of tuition fees. This is basically a joint account of the student and the guardian. There are some advantages of opening this account, such as waivers of fees and charges, free internet banking, a waiver of minimum balance requirement, debit card at lower costs etc. In connection with the school banking, a few banks have introduced education loan for students for helping them in perusing higher education. Bangladesh Bank asked all commercial banks in Bangladesh by a circular to boost up school banking activities to broaden the area of financial inclusion and divulge financial literacy among the mass people. Till now, 49 banks have launched the school banking scheme. In the first three months, about 54,000 school banking accounts were opened depositing Tk 170 million. Out of the total school banking accounts, Islami Bank Bangladesh Ltd (IBBL) stood first. Bangladesh Bank (BB) in collaboration with other commercial banks organised School Baking Conference-2013 in Dhaka, first of its kind in Bangladesh. CEOs of commercial banks presented their school banking report and future planning in the conference. BB Governor Dr. Atiur Rahman handed over prize and crest to the CEOs of those banks who performed better in School Banking. Bangladesh Bank is going to add an extra link in its official website highlighting the facilities of school banking. The website will be enriched with features, stories and video games related to school banking for attracting the kids. BB governor said that special programme will be introduced on TV, radio and other mass media for popularising this banking scheme. Bangladesh Bank has established Taka (coin) museum in its Training Institute, Mirpur, Dhaka and is planning for setting up a school banking corner at the museum only for students who can visit the place at any day. A lion's share of our population is students who are the future of our nation. If this segment of population can be brought under the banking network, it will be a pragmatic initiative in Bangladesh. Our future generation will be savings minded and the country will progress towards a strong economy. The writer is a banker and can be reached at [email protected]