Many nowadays prefer metal chests to banks for savings!

People are now increasingly taking recourse to putting their money in metal chests, commonly known as sinduk, to avoid extra costs and risks of saving with the banking system.

A spot check revealed the shift, attributed to variegated charges on bank-account maintenance and returns thereon as well as security concerns.

Banks charge Tk 150 for above Tk 100,000 up to Tk 500,000 and this is Tk 500 up to Tk 1.0 million. And on Tk 1.0 million above to Tk 10 million commercial banks charge Tk 2500 as excise duty. This is much higher while the volume of money rises, and it costs Tk 25,000 if someone transacts above Tk 50 million.

Some who sell the coffers to people told the FE that uses of the chests are on the rise as some people keep their cash in just to make it risk-free while transferring from one place to another.

But this surge in sale of the metal chests/coffers/sinduk does mean that some people have developed mistrust or lost confidence, to some extent, in the banking system which faced with a number of recent scams and fund shortages. A fourth-generation private bank stood out as a damper.

A number of insiders, on the other hand, believe that this type of hectic sale is possibly due to higher cash transactions with the businesses following rise in economic activity, with the economy growing over 7.0 per cent in recent years.

They also cited security concerns as one of the key reasons as many, including some middle-class families and decent job-holders are also buying it as a means of guarantee of their cash not falling in risk of dacoity, looting and such other sorts of pillage.

Earlier, the jewellery businesses and rich people used to use chest and its tradition had prevailed in the subcontinent for long.

A trader in Dhaka's Moulvibazar area told the FE that the current account and even savings account provide nothing in terms of interests against their deposits as they deposit and withdraw money each working day.

Md Monir Hossain, a trader in Fakirerpool area, said they supply five to seven units a month now which was hardly one a year back.

He said apart from banks and trading houses, jobholders who usually bought steel almira earlier are now buying chests for the safekeeping of their hard-earned money.

A small-sized (24-20-20 inch) chest sells at Tk 16,000-Tk 20,000, medium-sized (30-24-24 inch) at Tk 30,000-Tk 35,000, bigger one (42 to 60 inch) between Tk 60,000 and Tk 110,000 for traders and private users.

Liaqat Ali Khan, manager of City Steel at Fakirerpool, told this correspondent that the sales of chests were on the rise but he doesn't know why.

"My job is to sell, not to enquire the customers," he said while questioned about the reasons for such chest-buying binge.

He said apart from traders, Agrani Bank is a permanent customer of his company and they are also taking much, maybe, to tighten their security.

He said banks order 42-36-36 and 60-48-48-inch chests for their vaults, priced between Tk 80,000 and Tk 160,000.

He said four workers can make a medium-sized one (30-24-24) in ten days time. It costs between Tk 31,000 and Tk 35,000.

"It takes time based on order. The more you want sophistication, the more you need money and time," he said.

Alhaj Mohammad Nazim Uddin, president of Islampur Cloth Merchants Association in Old Dhaka, said small-scale traders are now keeping their money in their personal vaults following low interest rates and higher levying of excise duty.

"If you deposit Tk 0.2 million to a bank, you can get only Tk 700-Tk 750 a month while a substantial amount is cut as excise duty at the yearend," he said.

He said: "Small holders, who have in hand Tk 0.15 to 0.5 million at the weekend, now prefer to deposit into their personal vaults rather than to deposit it with banks."

According to Bangladesh Engineering Shilpa Malik Samity, more than 500 companies at Fakirerpool, English Road, Nayabazar, Shanir Akhra, Jurain, Gendaria and Jatrabari in the capital, Dhaka, now supply 20,000 metal chests worth Tk 600 million annually. Nearly 5,500 people are engaged in the sector making metal-made chests, file cabinets and almiras.

Haji Mohammad Mursalin, a trader at Nawabganj Bazar in the city, was buying a chest from Tareq Metal in English Road last Saturday. He had ordered it three weeks back.

Talking to the FE he said: "My grandpa had an old chest inherited from his father. The chest was given to my elder uncle after the old fellow following the family tradition. My father didn't use any chest as he always deposits money into banks."

Their home was looted twice in last five years. His father suggested him to use a weighty 'sinduk' which could be tough to carry.

He said metal chests have been getting popular among traders in older parts of the city for last few years especially for security issues apart from family tradition.

Around a hundred traders in Fakirerpool and around 250 in Nayabazar and English Road in the older part of the city usually supply most of the sinduks.

However, Delco Ltd, Alam Co, Ad My Products, Iron King, Mirza Steel, and Still Co are some of the leading metal-chest companies based in Fakierapool area.

Keeping consistency with the local chests, there has also been a rise in imported ones-- and their demand is also expanding fast.

Md Showaib Akhter, manager at Hi-Tech Ltd, an import-based furniture supplier in city's Panthapath, said they import digital metal chest from China.

"We are selling 10 to 12 pieces now against hardly two pieces a month earlier," he said.

"We sell Chinese CRMCR, Zhenxs and other four kinds of branded digital chests at prices ranging from Tk 16,500 to 0.12 million," he told the FE correspondent.

He said his company has an MoU with 8 commercial banks and non-bank financial institutions, including Dhaka Bank, SCB, Brac, City Bank, EBL, Lanka Bangla Finance Ltd.

Centre for Policy Dialogue (CPD) research fellow Towfiqul Islam Khan thinks the time hasn't come yet that people started leaving banks and securing money into their personal vaults.

"But the banks are really going through critical times following big scams even in the central bank," he told the FE.

Corrupt companies and officials will have to be meted out capital punishment to bring back the faith in banks, which is necessary for a better investment environment, he said.

"But talking on the rise in personal use of metal chests----we could take it from the security perspective of people," he added.

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