June 13, 2024, 7:35 am

Staff Correspondent

2021-09-29 18:24:00 BdST

School banking sees growth in accounts, deposits

Students’ deposit with several banks have increased by nearly 18 percent to Tk 2,147 crore in Fiscal Year 2020-21 even amid the pandemic, according to the Bangladesh Bank data.

On the other hand, the number of accounts under the school banking window also increased to 29.76 lakh in FY21, which was 24.31 lakh in the previous fiscal.

As per the data, Private Commercial Banks (PCBs) have the largest share -- 70.42 percent of the total school banking accounts and 81.18 percent of the overall school banking deposits amounting to Tk 1,743.56 crore.

The State-owned Commercial Banks (SOCBs) rank next to the PCBs with 24.51 per cent of the total accounts and 13.67 per cent of the total deposits.

Of the nine Foreign Commercial Banks (FCBs) operating in Bangladesh, seven have offered school banking so far. The number of accounts opened by the FCBs is 0.09 per cent only.

An official of the Financial Inclusion Department of Bangladesh Bank said that the banks have been asked to intensify the activities to increase the financial inclusion of school children even though the school activities were closed during the corona period.

The BB data also reveals that as of June 2021, banks have opened 29,76,643 school banking accounts, of which 54 percent are in urban areas and 46 percent the rural areas.

Dhaka has the largest share of 31.15 percent school banking accounts having 44.86 percent of the total deposits.

Chattogram ranks next to Dhaka with 21.02 percent share of the total school banking accounts and 23.81 percent of the total deposits.

The accounts are slightly inclined to male students holding 54 percent while female students 46 percent.

Top performing five banks in school banking activities

Dutch-Bangla Bank Limited (DBBL) tops the school banking operation with 5,80,922 accounts covering around 20 per cent of the total as well as holding a Tk 578.67-crore deposit. The bank covers 27.01 per cent of the total deposits in school banking accounts.

Islami Bank Bangladesh Limited (IBBL) remains the second highest in terms of the number of school banking accounts covering 12.92 per cent of the total accounts.

Amongst the state-owned commercial banks, only Agrani and Rupali Bank Limited hold their position in the list of top five performers.

Commenting on the increase in bank accounts and deposits of school students during the pandemic, former Bangladesh Bank governor Atiur Rahman said it is a great achievement of financial inclusion. The school banking was introduced to inculcate the habit of savings among the account holders.

The savings will benefit the students as well as the banking sector, he said, adding that when the learners will go to higher education, they will be able to spend from here, and if someone opts to be a small entrepreneur, they can also spend from there.

The former BB governor posited that the advantage of the banking sector is that the savings can be invested in the long term.

“The banks do not have stability in the amount deposited in other accounts, but they can invest the full amount of this account in the long run if they want so,” observed Atiur.

The Bangladesh Bank issued directive for the banks to introduce school banking in November 2010, and later framed a comprehensive policy in October 2013.

The students can convert their school banking accounts to general savings accounts once they reach the age of 18.

In the light of the existing school banking policies, banks can open student accounts with a minimum deposit of Tk 100 attaching no service charges.

Moreover, these accounts offer attractive interest rates, debit card facilities and financial education programmes.

55 banks operating in Bangladesh have so far offered school banking.

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