Teaching students to save

School banking is an excellent concept for students. It allows students to become familiar with the banking system. Although it might not look like much in the beginning, in reality, it has a long-lasting positive impact on the minds of school-going children. It helps them to deal with the concept of money. They learn from an early age about the value of money and how it can help them in the future.

According to a working paper of Ashley Cruce, one of the earliest examples of children’s savings institutions was Charles Loring Brace’s saving bank for poor boys through the New York Children’s Aid Society in 1854. School banking systems began in America in the late 1870s. J.H. Thiry has been credited with beginning the school thrift movement in America.

In our country, the concept of school banking is not really new. Since the 1960’s there have been several attempts to make the concept popular. It was in 2010 when Bangladesh Bank gave directives to re-invigorate this programme. That particular decision was crucial for making school banking more of an analogous idea among the general masses.

Today school banking is steadily becoming ever so trendy. According to latest data from Bangladesh Bank there has been an augmentation of students’ deposits. Several banks have seen an increase of deposit, approximately 18 per cent to Tk 2,147 crore in Fiscal 2020-21. These numbers indeed are very auspicious indicators.

That been said, it should be pointed out that the data also indicates that the private banks are the major players when it comes to school banking. Also, Dhaka and major urban areas saw more deposits than other parts of the country. The Bangladesh Bank data also reveals that male students hold 54 per cent of the total accounts. On the other hand, female students hold 46 per cent of the total. Thus, it is very important that we must make sure both male and female students develop the same type of interest in saving.

Recently some private banks have collaborated with different educational institutions and they collect the tuition fees from the students. The services in the private banks are better and they are motivated to get as much clientele as possible. Perhaps that is why the private banks have more school bank accounts and more deposits.

On the other hand, the government-owned banks should find better ways to motivate students, parents and more importantly the education institution authorities to collaborate with them. There should be more elaborated plans with school banking. There should be ideas as to how to keep the students enthused in continuing their accounts.

Does one think the cost of education is low in Bangladesh? Of course, not. It is quite costly even if the children are admitted to government schools. There are private tuition fees, transportation and many more expenses. Admission to private schools, colleges or universities is not that difficult but surely they are very expensive.

The general idea of school banking is to make school-going children become familiar with the banking system. Under the policy regarding school banking in Bangladesh, students aged between six and 18 have to primarily deposit Taka 100 to open an account. Till the students reach the age of 18 their parents or guardians will support them to operate the account.

To make the concept of school banking more popular, banks can offer schemes under which students don’t even have to deposit any money. Although our GDP is getting better still there are many parents for whom it’s hard to deposit even Taka 100. At the moment there are 55 banks in our country are offering school baking services. As from 2015 when school baking started to become more popular, Bangladesh Bank suggested banks who are offering school banking services can also provide or offer educational insurance facilities to those who have school bank accounts. It was to make sure if any unexpected financial crisis occurs, students should have the means to deal with problems financially. Sadly, some banks are yet to start such insurance schemes.

The data also indicates that as of June 2021, banks have opened 29,76,643 school banking accounts, of which 54 per cent are in urban areas and 46 per cent the rural areas. According to usaid.gov there are 18 million students only in primary schools. Thus, one can safely say that there are opportunities for more growth regarding school banking.

There should be more study on school banking for example, how school banking is helping the students? The success stories of the students and parents who have benefited from school banking should be brought into the limelight. The authorities concerned should highlight the advantages of school banking.

There should be awareness campaigns about the benefits of school banking. People should learn how school banking can become a form of social security for school-going children. A few reports in the newspapers or a two-minute TV report on the topic is simply not good enough. There should be a proper advertisement in the media. We have so many student associations in this country, so many public organisations working with students, they should highlight the importance of school banking.

The writer is Editorial Assistant at The Business Post