In the first quarter (July-September) of the current fiscal year, the number of poor, extremely poor or no frill account (NFA) holders, excluding the school banking, street children and working children accounts, has increased while deposits in those accounts decreased.
The trend shows negative growth in holding deposits at the NFAs for the extremely poor.
Economists and bankers say that deposits in the poor's bank accounts kept declining due to the current inflationary pressure and other economic crises.
“It is because poor people were struggling amid rising commodity prices that might force them to withdraw savings to meet daily household expenditures,” they explained.
According to the central bank's data, the number of accounts for the extremely poor reached 3,554,128 as of September 2022. This number is 8.98% higher than that of the previous quarter and 3.43% higher than that of the September 2021 quarter.
Meanwhile, deposits in the accounts for the extremely poor decreased by 1.98% compared to the previous quarter and 8.33% compared to the September 2021 quarter.
Bangladesh Bank's latest data shows that the cumulative deposits in these accounts declined to Tk34,364.48 crore, which was 1.15% lower than the previous quarter (April-June) or Q4 of FY22.
In Q4 of FY22, the total amount of deposits was Tk3,476.33 crore. But compared to July-September (Q1) of FY22, it is 33.57% higher.
On the other hand, the total depositors stand at 25,856,214, which is 2.29% higher compared to the previous quarter.
In Q4 of FY22, this category's number of account holders was 25,276,832.
Data analysis also revealed that the number of accounts has grown. The number of Tk10 accounts for the farmers remains the largest component of the NFAs, contributing to 38.23% of the total Tk10/50/100 accounts.
On the other hand, the number of accounts for the beneficiaries of the social safety net (SSN) program constitutes 37.60% of the total NFAs in the reporting quarter, which increased by 0.15% over the previous quarter.
The no-frill accounts for Readymade Garments (RMG) workers constitute 2.70%.
However, no-frill accounts play a significant role in the distribution of foreign inward remittances. In the September 2022 quarter, these accounts received Tk147.27 million as foreign remittances.
What is a no-frill account?
Bangladesh Bank has taken various initiatives to ensure financial inclusion, offering services for people in all segments of society. As part of these initiatives, the central bank has issued directives for the banks to open accounts for marginalized people with an initial deposit of Tk10/50/100.
These accounts require neither a minimum balance nor any service charge or fee. On the contrary, relatively higher interest rates than the existing savings rates are offered in these accounts to augment the welfare of the low-income. Generally, these accounts are referred to as no-frill accounts (NFAs).
The target for these accounts include farmers, RMG workers, the extremely poor, the beneficiaries of the Social Safety Net (SSN) program etc.
NFAs also include school banking accounts (SBAs), where students under 18 years old can open bank accounts with an initial deposit of Tk100 only.