School banking services are increasingly gaining popularity among students as evidenced by total deposits in these accounts exceeding Tk 2,300 crore in July despite continuing economic headwinds such as rising inflation.

Students deposited Tk 2,326 crore in accounts in July this year, up 7% year-on-year, according to Bangladesh Bank.

The number of school bank accounts increased by 13.6% year-on-year to 31.89 lakh in July this year.

A number of banks have previously taken a series of measures to expand school banking as instructed by Bangladesh Bank, which has mainly boosted financial inclusion for students, a central bank official with deep knowledge said. in the matter.

The number of accounts and the outstanding balance under the school banking program would have increased significantly if the coronavirus pandemic and ongoing economic crises had not hit the economy, he said.

The financial situation of a large number of parents of students is now critical due to the upward trend of inflation, which has already eroded their income base.

Deposits in banks generally decline in times of inflation, but the situation is different for school banks.

Additionally, educational institutions remained closed for the majority of 2020 and 2021 in an attempt to weaken the pandemic, which negatively impacted schools’ banking operations.

“Despite all odds, it is a positive sign that outstanding deposits and the number of accounts under the school banking program have increased in recent times,” the official said.

The central bank introduced school banking in 2010 as part of its efforts to expand financial inclusion and equip students with financial literacy.

The program aims to instill in students the habit of saving and to make them more efficient in managing their money.

So far, 55 banks have rolled out school banking, allowing students aged 11 to 17 to open accounts.

The accounts have a number of benefits, such as waivers of fees and charges, free online banking, minimum balance requirements, and the availability of low-cost debit cards.

Accounts can be opened with a minimum deposit of 100 Tk.

Saiful Amin, branch manager of City Bank, said they are putting more emphasis on expanding school banking operations in rural areas rather than urban areas.

“City Bank aims to expand banking operations to create deposit habits among students and build their knowledge of financial literacy,” he said.

“We are trying to accelerate our financial inclusion agenda by running different initiatives, including expanding our school banking operations,” he said.

The bank has already asked all branches to emphasize school banking as it does for others, Amin said.

“We hope that the City Bank school banking operation will spread further in the coming days,” he said.