No-frill account deposits fall 4pc in July-Sept

The decline in the no-frill account (NFA) deposits during the July-September 2024 quarter could potentially limit access to credit for low-income individuals and small businesses.

A latest Bangladesh Bank report revealed total deposits in the Tk 10/50/100 accounts stood at Tk 45.32 billion in the said quarter, which was 4.01 per cent lower than the previous one.

NFAs offer banking access to low-income groups, school students under 18, and street children with initial deposits as low as Tk 10/50/100.

They continue to be a powerful tool to promote financial inclusion in Bangladesh. By enabling marginalised populations to save, access credit, and receive remittances, these accounts significantly enhance economic stability and empowerment.

As the banking sector builds on this progress, the ongoing expansion of NFAs highlights the potential of innovative financial products to bridge the gap between the formal economy and underserved communities.

At the end of September 2024, the number of NFAs stood at an impressive 32.33 million, with total deposits amounting to over Tk 67.66 billion. These accounts, serving as a gateway for marginalised communities to the formal financial system, have shown consistent growth.

Among the various NFA categories, there were 27.87 million Tk 10/50/100 accounts, excluding specialised ones like those for school banking and street urchins, and they held deposits of Tk 45.32 billion at the end of the third quarter of 2024.

Compared to the previous quarter, the number of such accounts grew by 0.34 per cent, while the year-on-year growth was recorded at 2.94 per cent.

The largest share of these accounts belongs to the Tk 10 accounts under social safety net (SSN) programmes, making up 37.30 per cent of the total figure. Farmers' accounts follow closely, representing 37.10 per cent.

The central bank report said to support marginalised groups' financial health, NFA holders have received Tk 7.27 billion in credit from the Tk 7.50 billion refinance scheme. This funding enables individuals to maintain economic stability and invest in small-scale ventures.

NFAs also play a crucial role in facilitating inward remittances. By the end of September 2024, a cumulative Tk 7.27 billion in remittances had been channelled through these accounts, providing families in rural areas with essential financial resources.

The third quarter witnessed an uptick in school banking accounts, with 6,071 new accounts opened. This represents a 0.14 per cent increase from the previous quarter, driven by renewed school banking conferences nationwide.

Additionally, accounts for street children and working children grew modestly by 0.02 per cent. Currently, 19 banks have 39,641 such accounts, underscoring a commitment to bringing even the most vulnerable populations under the financial system.