Deposits in the bank accounts of the extreme poor declined in September, driven by rising inflation and the continuous devaluation of the local currency.
According to Bangladesh Bank’s quarterly report, deposits in these accounts fell to Tk 243.2 crore in September from Tk 260.4 crore in June.
Bankers attributed the decline to escalating living costs caused by inflation, which reached 11.38 per cent in November, up from 10.87 per cent in October.
The persistent devaluation of the local currency further compounded the issue, prompting people to keep more cash on hand for daily essentials.
Dollar prices surged to Tk 129, up from Tk 120 on December 10 and Tk 110 on May 7, eroding the purchasing power of the poor.
Inflationary pressures and currency depreciation have made it increasingly difficult for the extreme poor to save.
Despite the drop in deposits, the total number of accounts held by extreme poor individuals rose slightly to Tk 33.22 lakh in September from Tk 33.12 lakh in June, though it remained significantly lower than Tk 35.61 lakh in September in 2023.
Deposits in these accounts were Tk 235 crore in December 2023, Tk 214 crore in December 2022, and Tk 238.84 crore in June 2021, reflecting fluctuations tied to economic challenges.
Under the central bank’s financial inclusion programme, marginalised individuals can open accounts with deposits as low as Tk 10, Tk 50, and Tk 100, aiming to provide basic banking access to the economically disadvantaged.
Non-frill bank accounts are available to various groups, including farmers, garment workers, extremely poor people and beneficiaries of social safety net programmes.
Students aged under 18 years can also open bank accounts with an initial deposit of Tk 100.
These accounts were launched by the central bank to provide a safe place for people to keep their money without any charges.
Bankers said the deposits in non-frill bank accounts rose slightly due to an increased disbursement of government’s subsidy and salary.
Till the September quarter, the government disbursed more than Tk 727.92 crore of subsidy/salary to 84,862 borrowers’ accounts held with various segments of marginalised people.
The total amount deposited in bank accounts with deposits of Tk 10, Tk 50 and Tk 100 plunged by 9.3 per cent to Tk 4,282 crore in September from Tk 4,721 crore in June.
The number of non-frill accounts rose to 2.78 crore in September from 2.77 crore in June.
Non-frill accounts play a significant role in the distribution of foreign inward remittances.
The cumulative amount of foreign remittances received through these accounts by the end of the reporting quarter declined by 0.57 per cent to Tk 727.9 crore compared with that in the previous quarter ending in June.
In this quarter 6,071 new School Banking accounts have been opened.
As of September 2024, 19 banks have opened 39,641 street urchin accounts through 53 NGOs. The total amount of deposits in these accounts reaches Tk 46.8 lakh at the end of the reporting quarter