Md. Zillur Rahaman :
Bangladesh Bank initiated the school banking 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. School banking is a wonderful concept that can help financial inclusion. Under this, school-going students can save money in their bank accounts. This is helpful for instilling a habit of saving from an early age among the children.
It is incredibly important to teach our students about savings and spending. They are the mirror of our behaviors and will take our lead on the role of money in their lives. Some essential lessons-waiting to purchase something we want, saving, identifying specific ways for children to save such as using jars or envelopes, making wise choices and understanding that when money is spent, it can not be spent somewhere else.
Usually the students are used to get baksheesh, tiffin money in various occasions from father, mother or senior citizens among family members. Some students also get scholarship either government or private organisation. Most of the time, these money is spent either in fast-food or amusement with their friends. Sometimes, these money force them to commit an offensive work or make them addiction. School account is a good way to save up their baksheesh or scholarship money in a creative manner and it has a chance to create a dream in their future life.
School banking is not new in Bangladesh. Some banks, including Muslim Bank, had introduced a school banking programme in the 1960s, but it did not survive long. Similarly, AB Bank (formerly Arab Bangladesh Bank) had also initiated the service in Sunshine Grammar School in Chittagong in 2003. But that too did not work well. Finally, school banking got renewed impetus when the central bank issued the formal circular in late 2010 during the Governor of Dr. Atiur Rahman, as per his personal initiative as a financial inclusion.
Accordingly, Bangladesh Bank instructed all the scheduled banks to open school banking branches. It mentioned that all students need to be brought under banking services to help them contribute to economic activities through savings as an inclusive banking.
The scheme not only plans to help students and parents with a sizeable amount of savings after a certain period, it also aims to instil the habit of savings from an early age into students. The scheme will teach kids money management skills that may be useful for the rest of their lives. Through the programme, kids can bank at school, with a hands-on banking experience in a simple way.
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. This is basically a joint account between the student and the guardian. Money cannot be withdrawn by the students without guardians signature before their maturity.
On November 2, 2010, the BB for the first time instructed all the banks to facilitate opening bank accounts of the school children with just Tk 100 as initial deposit. 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,
As per the central bank that they had dealt with issues where parents were found keeping significant amount of money in their children’s bank accounts to avoid taxes and hassles. However, many of the banks were also offering relatively higher interest rates on deposits in the school banking accounts, this is one of the reasons, many guardians kept their deposit in the school banking accounts.
Two years ago, the BB instructed all the banks that the school banking accounts will eventually be converted into general savings accounts when the student account holders become adults. Of course, this is possible only with confirmation from the account holders and the converted account holders will enjoy the benefits of school banking.
School banking is gradually getting huge responses from the students across the country. According to the latest BB’s Financial Inclusion Division data, deposits in the school banking accounts at the end of March 2020, a total of Tk 1724.63 crore was deposited from 23,29,131 school banking accounts at 55 scheduled banks.
Basically every savings deposit is the next pillar of future dream. Once we realize the importance of saving and the role that it plays in our life, creating goals is the next step to stay on track. So, all the guardians should come forward to encourage the students to open school account for their future planning and education, as savings against education is the best investment in future life.
(Md. Zillur Rahaman is a banker. Email- [email protected]).
