No-frills bank accounts get popular

No-frills accounts are increasingly becoming popular in the country as the number of such bank accounts grew 8.48 percent to over 2.2 crore in the July-September period of the current fiscal year, beginning on June 1. 

The increase has been attributed to government policy to bring disadvantaged people under the traditional banking network.     

During the period, the cumulative deposits in different components of no-frills accounts have stood at Tk 2,180.79 crore, according to Bangladesh Bank (BB).

No-frills accounts  can be opened with an  initial deposit of Tk 10, Tk 50 and Tk 100  by the underprivileged  people, school  students  under  18  years  and  working children who are allowed to maintain the accounts with a zero balance and levies zero or nominal charges.

The target groups of these accounts include Farmers, the Freedom Fighters, Disabled Persons, the Extreme Poor, the beneficiaries of the Social Safety Net (SSN), according to the Bangladesh Bank.  

"In line with the government's directives, Bangladesh Bank has taken various initiatives to provide financial services for the people of all segments of society. As part of these initiatives, underprivileged people are allowed to open no-frills accounts," said BB's chief spokesperson Md Serajul Islam. 

These accounts require neither a minimum balance nor any service charge or fee, he said, adding that on the contrary, such account-holders are given higher interest rates than the existing savings rates to augment welfare of the marginal people. 

He said these special types of accounts are used for different purposes as the government disburses subsidy/salary to the various segments of underprivileged people of the society. In addition, he said no-frills accounts have also played an important role in channelizing inward foreign remittances.

According to the latest BB data, total number of accounts for farmers has stood at 96,98,152, for school banking accounts at 24,50,564, for street children accounts at 10,652, for extreme poor at 26,94,062, and for the freedom fighters at 3,26,119.

The number of street children accounts has doubled compared to that in the last year. Agrani Bank Limited has ranked the top with the highest number of 5,930 accounts and Rupali Bank Limited is the top deposit collecting bank with a total amount of Tk 11.75 lakh.

Since inception in 2011, Tk 10 accounts have been playing an important role in facilitating the distribution of government allowances for the freedom fighters.

As of the reporting quarter, 1,25,846 such accounts have  brought Tk 497.61 crore in foreign remittances to Bangladesh.

School Banking activities increased during July-September period and cumulative deposits in 24,50,564 such accounts reached Tk1821.40  crore. 

A total of 19 banks have so far opened 10,652 Working Children accounts through 23 NGOs. No-frills   accounts have played a crucial role in maintaining the livelihood of the underprivileged mass during the COVID-19 pandemic as the government disbursed subsidy/salary to the various segments of underprivileged people. 

Banks have extended Tk 363.64 crore credits to the underprivileged people under Tk 200 crore refinance and other schemes through the no-frills accounts.

State-owned Commercial Banks (SOCBs) dominated other categories of banks in opening Tk10, Tk 50 and Tk 100 accounts. As of September 2020, SOCBs have opened 1,25,34,872 accounts which constituted 57 percent of the total accounts. Specialized Banks have 29 percent while the Private Commercial Banks (PCBs) have 14 percent share of these special accounts.