Rural banking

BANGLADESH has a population of 160 million, but only 13 per cent of the population has a bank account. But the country is witnessing increased cash flow to rural areas, as people are migrating from villages to cities or abroad for employment. These people earn and send money back to their families. Although Bangladesh is a fast growing developing country and rural areas are being increasingly urbanised, sufficient banking facilities do not exist in rural Bangladesh. The rural people do not get banking service and small businesses in rural areas can not do their business properly as they do not get adequate credit facilities for their business. The families of non-resident Bangladeshis living in the countryside do not receive the money remitted from abroad in time. Those who send money from abroad do not also get banking services and at times they send remittances by 'Hundi' which is illegal and harmful for the economy. A recent survey showed that some 77.90 per cent foreign exchange sent by non-resident Bangladeshis (NRBs), come through formal channels like commercial banks and post offices while the remaining 22.10 per cent through 'Hundi' or other informal channels. And for local transaction they use mobile banking service that is quite expensive. If rural people can get adequate banking services they can get their money easily and avail credit to expand their businesses.
A good number of public and private banks are operating in our country, but they have very few rural branches. I think rural areas deserve more attention as the countryside is developing faster than the urban areas. Accordingly, rural banking should be extended to remote areas of the country.
Md. Khorshed Alam
East West University, Dhaka
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