School banking thrives amid pandemic

Highlights

• Over 1.02 lakh school baking accounts opened during April-June
• Deposit increased by Tk38 crore
• Current number of accounts: 2,431,602
• 60.82%  of accounts opened in urban areas, 39.18% in rural ones
• 55 banks have so far offered school banking
• Private commercial banks opened 69.05% of the total accounts
• Schools have been shut down. But the students have not stopped saving money in the banks. 

During April-June this year, students opened over 1.02 lakh bank accounts.

This brought the total number of school banking accounts to 2,431,602, according to the Bangladesh Bank data. 

And 60.82% of the accounts were opened in the urban areas and 39.18% are in the rural ones.

The State Bank of Pakistan introduced school banking in 1961 under the programme "National Publicity Campaign to Develop Banking Habit and Savings." 

And the reintroduction of the school banking programme in 2010 has been quite successful to encourage young students to develop saving habits. 

Banks can open a student account with a minimum deposit of Tk100 but cannot charge any fee for that, according to the current school banking policy.  

There are other advantages of opening this account including attractive interest rates, debit card facility and financial education programmes.

Of the 60 banks operating in Bangladesh, 55 have so far offered school banking.

Md Serajul Islam, executive director and spokesperson of the central bank, told The Business Standard, "Students have to pay academic fees through the banking channel amid the pandemic. So, those who do not have a student account are feeling like having one now."

The number of such accounts in the rural and urban areas grew by 6.04% and 3.37% during April June this year.

Male students held 56.71% of the total school banking accounts and female ones 43.29%. 

And total deposit in school banking marked a 2.21% rise in the June quarter – to Tk1,763 crore – from Tk1724.63 crore in the March quarter.

And the number of school banking accounts grew by 4.40 % during the quarter. 

Due to the Covid-19 pandemic lockdown measures, the growth in school banking accounts and deposits slowed down in June compared to the previous quarter, the central bank officials said. 

Since mid-March, all academic activities have come to a halt. The government extended the time of educational institution closure until October 3 this year to contain the spread of Covid-19.

However, the year-on-year comparison showed significant growth in school banking. 

The number of accounts and amount of deposits increased by 435,572 or 21.82% and Tk268.42 crore or 17.96% in June 2020 compared to June 2019. 

Private commercial banks have the largest share of school banking accounts and deposits. 

They opened 1,678,889 accounts – 69.05% of the total school banking accounts – and collected deposits of Tk1,466.12 crore – 83.17% of overall school banking deposits. 

Dutch-Bangla Bank Limited has topped the list in school banking operations with 518,363 accounts – 21.32% of the total accounts – and a total deposit of Tk513.20 crore.