The scheme teaches kids useful skills which will guide them about money management effectively
School banking accounts and their deposits rose by nearly 14% in September over the same period of last year, according to the latest data of Bangladesh Bank (BB).
The scheme teaches kids useful skills which will guide them about money management effectively. As part of the program, kids can bank at school, with a hands-on banking experience in a simple way, experts say.
The rise of student banking
The BB data stated that the amount was deposited through 1,609,961 school banking accounts at 56 scheduled banks.
During the July-September period of the current fiscal year, deposits rose by Tk173.91 crore to Tk1,428.14 crore, while accounts increased by 222,344 to 1,609,961.
This was an increase from previous fiscal year’s similar period, where the numbers were Tk 1,254.23 crore and 1,387,617 respectively, according to BB data.
Tk1,196.65 crore (83.96% of total school banking deposits till September this year) was deposited with 10,31,383 accounts, 64.06% of total school banking accounts, in private commercial banks.
On the other hand, Tk191.15 crore was deposited with 4,46,426 accounts in state-owned commercial banks, as mentioned in the central bank's latest quarterly report on financial inclusion.
The report also shows that the school banking service is more popular in cities rather than rural areas as 988,505 or 61.40% school banking accounts were opened in cities against 621,456 or 38.60% accounts in rural areas.
It is also more popular among male students than female students as 937,031 or 58.20% school banking accounts were opened by male students against 672,930 or 41.80% by female students.
“BB launched for students to help them save for future”
“Bangladesh Bank launched the program in November 2010 for school students to help them save up for the future, as well as to learn financial literacy at an early age and establish the habit of saving," a BB official said.
According to sources at BB, any student, aged between 11 and 17 years, can open an account with banks supporting the service. The account can also be opened at ease with three copies of photo of the account holder and a parent’s written consent. This is basically a joint account between 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, sources added.
Former Bangladesh Bank governor Dr. Atiur Rahman told the Dhaka Tribune that student banking is now popular because of the central bank’s initiatives. As student deposits are increasing by the day, BB should play a more effective role to promote the service across all districts.