School banking is on the rise with the total deposits in such accounts reaching over Tk 2,030 crore in May this year, despite the Covid-19 pandemic that has hit life and livelihood hard in the country.
School banking is teaching the children how to manage their money and funds effectively. This programme was introduced to familiarise school students with banking services and advanced banking technologies with a view to ensuring their financial inclusion.
The deposit in May soared 2.22 per cent from Tk 1, 986 crore in April, according to data from Bangladesh Bank.
The number of accounts under this special banking has increased by 29,893 to 2,815,406 in May, which was 27,855,13 in April.
"It is very encouraging that both the deposits and the number of accounts under the school banking programme are on the rise despite the Covid-19 pandemic," said a BB official.
He said the number of accounts and the outstanding balance under school banking would have increased manifold had not the Covid-19 pandemic adversely affected the economy.
According to the BB's latest data, both the number of accounts and deposits maintained an upward trend since January this year. The number of accounts was 2670154 in March, 2658190 in February and 2646115 in January this year, according to the BB's latest data.
The deposit in school accounts was Tk 1968.8 crore in March, Tk 1963.5 in February and Tk 1939.1 crore in January this year.
The central bank directed all the scheduled banks to start a financial inclusion policy for school-going students under the name of School Banking on November 2, 2010. School banking accounts can be opened for students aged between 11 to 18 years.
BB also suggested that participating banks could provide educational insurance facilities to account holders. If a student faces financial crisis to continue his/her education due to family emergency or other reasons, financial help can be provided under the insurance coverage.
Formal school banking accounts were opened by the commercial banks following the instructions of Bangladesh Bank in 2010. Bangladesh Bank has appointed a lead bank in every district to monitor the school banking initiative.
According to the BB's data, school banking service seemed to be more popular in the cities than in the rural areas as 1,544,056 school banking accounts were opened in the cities against 1,271,350 accounts in the rural areas.
It also pointed out that this banking is more popular among the male students than the females as 1,554,038 accounts were opened by male students whereas 1,261,368 accounts were opened by female students.
Dutch Bangla Bank, Islami Bank, Eastern Bank, United Commercial Bank and Dhaka Bank are the five banks that pulled most of the deposits from the students.
A student can withdraw a maximum of Tk 2,000 through ATM booths or points of sale on any given month. However, the withdrawal amount can increase to Tk 5,000, if guardians request for it.
The school banking accounts will eventually be converted into general savings accounts when the student account holders become adults.