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12 July, 2018 00:00 00 AM
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School Banking

Sheikh Iraj
School Banking

School banking is a wonderful concept. It enables students to save money in a bank account without paying any service charges. In 2010, Bangladesh Bank, the country’s central bank, launched a school banking programme. Slowly but steadily, many banks started to introduce the service for students. The idea of school baking is rather new for many schoolchildren, parents and teachers. But the programme is already gaining popularity across the country.

The latest quarterly report of the central bank’s monetary inclusion reveals that about Taka 1,363 crore (13.63 billion) was deposited with 1,453,936 school banking accounts at 56 banks as of December 31, 2017, according to a news item published in The Independent newspaper on May 22.

The school banking programme was introduced to familiarise school students with banking services and advance banking technology. Under the scheme, any student aged between 6 and 18 can open an account with just Taka 100 as initial deposit, while their parents or guardians will help them to operate the account.  

Usha Ibn Imran is only eight, but he already has a bank account. “I am in class-2 at South Point School. My father introduced me to the school banking idea. I opened my account two years ago at Midland Bank. I cannot draw cash from the bank, but my mother can. Every month, I go to my bank once or twice to deposit my savings. I am saving money so I can use it for higher education in future and buy things that I like. Many of my friends like the idea that I have a bank account,” he said.

Sha’s father, Imran Al Habib, 35, is head of Midland Bank’s Mirpur branch. He told Y&I over the phone: “Our Mirpur branch has just opened. Within 15 days, we have got 250 school banking accounts in the pipeline. In our bank, there are about 1,500 school banking accounts. I am very excited about school banking because my son has a bank account, too. He was only six when I helped him open the account. He is now eight years old and he understands the concept of having a bank account. He saves money he gets from his grandparents and the eidi (Eid gift money) he receives. He even has plans to buy a toy that he wants with the money he manages to save in his account.”

Today, many parents and guardians are also finding school banking quite helpful. School banking does not only involve saving money by students, parents or guardians can also pay school fees through some of the banks.

Ashfaque Hossain, 28, is a businessman. He has two younger siblings who are still in school. After their mother passed away two years ago, Hossain has taken on the role of their guardian as their father is too ill to take care of them. “I never really paid much attention to their education as my mother used to take care of that. I recently came to know they have school banking accounts and from now on, I will help them to make deposits and withdrawals. I think school banking is a great idea. It helps children to understand the value of money. I have to visit the bank often and I can easily pay their school fees there,” he told this reporter at the Aminbazar branch of Dutch-Bangla Bank.

School Banking can be an indicator of the quality of customer service customers are receiving.

M Sabuz Monwar, assistant vice president and manager of Dutch-Bangla Bank’s Hemayetpur branch, said: “School banking is not all about how we are helping students to develop a savings mentality; it is also a very good indicator of what kind of services we are providing to our customers.”

“Whenever I see any schoolchild who has come to our bank with the parents to open an account, I greet them with a smile. At our branch, we provide service to eight schools. Every month, about 30 new accounts by schoolchildren are opened here. We try to give priority to the students. We believe if we can spread information about school banking, then more and more students will show interest,” Monwar added.

Anamika Akter, 17, a student at Gabtoli Mohila College in Bogura, opened a school banking account when she received a scholarship. “When I got the scholarship, I came to know about school banking and I opened an account with NRB Bank. My mother withdraws money from that account. Many of my friends have also opened school banking accounts. After completing my HSC (higher secondary certificate), I plan to study nursing and by that time, my school savings account will become a regular savings account,” she said over the phone.    

Shazia Afrin, 32, a senior officer at NRB Bank Ltd, said: “It is true that the school banking programme was introduced in 2010, but it started to pick up momentum from 2013. I have been working in the school banking department for three years. I have to say, the amount of interest students and parents are showing in school banking is quite exciting. Our rural branches, in particular, are receiving excellent response. Students can open an account just by depositing Taka 100 and there is no service charge for these accounts. So far, we have 2,000 school banking accounts and we are planning to launch campaigns in order to inform more schools, students, and parents about the scheme.”

“Besides students, many educational institutions are working with us. We are collecting school fees on behalf of the schools. Thanks to school banking, students and parents can easily pay their school fees. Bangladesh Bank has suggested in the guidelines that banks can provide education insurance against a student’s bank account, if the account holder faces any financial crisis. However, we are yet to start this specific programme. If any client applies for financial help to continue with their studies, we might help them through our CSR (corporate service responsibility) programme,” Afrin added.   

Monatosh Kumar Debnath, 50, assistant head teacher at Monipur High School and College, said: “Last year, some people from Rupali Bank came to our school to inform us about school banking. We immediately liked the idea and got on board. The problem is there are 40,000 students in our school section and it is hard to keep track of who has a school banking account and who has not. That being said, we know some students who regularly save money in their school banking accounts.”

“The truth is in Dhaka, parents and students who are financially sound do not pay much heed to school banking. They must understand that school banking may help their children financially in the long run. In other countries, we see parents and children trying to save money that can later be used for higher education. We need to adopt this practice. I have known some parents who had to sell their family land to pay their children’s tuition fees. School banking can certainly help many people handle such financial crises,” Debnath added.

Rezaul Karim Sarker, 55, deputy general manager, Bangladesh Bank, told Y&I: “Actually, the idea behind school banking is to motivate students to save and make them familiar with the latest banking services and technology. In 2010, we started encouraging scheduled banks to start school banking, and in 2013 we developed a policy guideline on it. In our guidelines, we have proposed that banks provide educational insurance to students. We, along with Insurance Development and Regulatory Authority (IDRA), are closely working on the issue. We want to reduce the school dropout rate.”

“Now, the problem lies with the premium amount, as it cannot be the same for everyone. For example, if the parents of a class-3 student suddenly die, the insurance company will have to take care of that child for more than seven years (until class-10). Again, the age and health of the parents also have to be considered. I think we will be very successful when we can come to a decision regarding the premium rate. Bangladesh Bank has appointed a lead bank in every district. Their responsibility is to encourage other banks to open student banking accounts, to arrange an annual conference on school banking and report on how many accounts have been opened. We have given individual targets to the banks. The banks are also encouraged to give financial help to students who need it,” the bank official added.  

We all know the cost of education in private schools and universities can be a little too much for many people. When faced with a sudden financial crisis, a school banking account can turn out to be a lifeline for some.                          

Nahid Hasan faced financial problems while he was a student at Stamford University. “We had to spend all our savings for a family emergency. I did not have enough money to pay my tuition fee. Then I remembered I had a school banking account at Uttara Bank that I had not checked for a couple of years. I was surprised when I found out I had more than Taka 5,000 in my account. For many, Tk 5,000 might not be much, but it was enough for me to pay my university fees. When a student attains 18 years of age, the school banking account transforms into a regular savings account. I am greatly thankful to my school friends who initially encouraged me to open a school banking account,” said Hasan, 28, who now works at the Institute of Chartered Accountants of Bangladesh.

There are some rules that students and parents have to follow in order to open and maintain a school banking account. For example, students cannot withdraw cash by themselves and they need their guardians’ or parents’ help to take out money from their accounts, and student account holders must be Bangladeshi citizens, aged between 6 and 18. In its guidelines on school banking, Bangladesh Bank has suggested that participating banks can provide educational insurance facility to account holders, so if any student faces financial crisis to continue with their education due to family emergency or natural causes, then it will be possible to receive financial help under the insurance coverage. However, some of the banks are yet to start such insurance schemes, although many of them have expressed their eagerness to do so. More specific guidelines on the school banking scheme can be found on the official website of Bangladesh Bank at www.bb.org.bd.

Photos: Courtesy, Internet.

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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