School banking is gaining popularity among students, illustrated by total deposits in such accounts exceeding Tk 2,300 crore in July despite persistent economic hurdles such as rising inflation.
According to Bangladesh Bank, students deposited Tk 2,326 crore in the accounts in July this year, up 7 percent year-on-year.
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The number of school banking accounts rose 13.6 percent year-on-year to 31.89 lakh in July this year.
A number of banks have previously taken a series of measures to expand school banking under instructions from Bangladesh Bank, which has mainly given a boost to student financial inclusion, said a central bank official with extensive knowledge on the matter.
The number of accounts and outstanding balance under the school bank program would have increased manyfold if the coronavirus pandemic and ongoing economic crisis had not hit the economy, he said.
The financial situation of a large number of students’ parents is now critical due to the upward trend in inflation which has already eroded their income base.
Deposits in banks tend to decline in times of inflation, but things are different in school banking.
Additionally, educational institutions remained closed for much of 2020 and 2021 to mitigate the pandemic, adversely impacting schools’ banking operations.
“Against all odds, it is a positive sign that both outstanding deposits and the number of accounts under the school bank program have increased recently,” the official said.
The central bank introduced school banking in 2010 as part of its effort to expand financial inclusion and bring financial literacy to students.
The program aims to teach students the habit of saving and make them more efficient in managing money.
So far, 55 banks have introduced school banking schemes, allowing students aged 11 to 17 to open accounts.
The accounts offer a range of benefits such as: B. Waiver of fees and charges, free internet banking, low minimum balance requirements and the availability of debit cards at low cost.
Accounts can be opened with a minimum deposit of Tk 100.
Saiful Amin, head of City Bank branches, said they put more emphasis on expanding school banking in rural areas than in urban ones.
“City Bank aims to expand banking operations to create depositing habits among students and strengthen their knowledge of financial literacy,” he said.
“We’re trying to accelerate our financial inclusion program by undertaking various initiatives, including expanding our school banking operations,” he said.
The bank has already instructed all branches to place some emphasis on school banking, as with others, Amin said.
“We hope that City Bank’s school banking business will continue to expand in the coming days,” he said.
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