5 lakh social safety net accounts opened during Apr-Jun

During April-June this year, 691,872 new no-frills accounts under different categories were opened, according to Bangladesh Bank data.

Of them, 494,191 accounts were opened under the social safety net programme while farmers opened 56,094 accounts.

A no-frills account is a bank account that can be opened and maintained with a zero balance and levies zero or nominal charges.

Low-income people have shown interest in opening bank accounts during the Covid-19 pandemic to receive money from various types of stimulus funds declared by the government to shore up the economy.

As of June this year, the total number of Tk10/Tk50/Tk100 accounts in different categories stood at 22,070,630. The figure is 3.24% higher than that of March this year and 13.19% higher than that of June last year.

Farmers own 45% (10,270,143) of no-frills accounts while 34% (7,358,243) were opened under the social safety net programme. The extreme poor own 13% (2,723,995) of the accounts and freedom fighters 1% (254,197).

The remaining 7% of the accounts belong to those receiving various government allowances, such as physically challenged people and beneficiaries of the national service programme etc.

During the second quarter of this year, the number of accounts opened under the social safety net programme grew by 7.20% while farmer-held accounts increased by 0.55% compared to the previous quarter.

In addition, the total number of no-frills accounts of ready-made garment (RMG) workers reached 435,956 in June from 322,244 in the March quarter.

This increase indicates the channelling of the government's quick recovery funds for the RMG sector, especially payment of salaries or allowances through bank accounts or mobile financial services (MFS). The government arranged a Tk7,500 crore fund for the sector.

Eventually, the government declared over Tk1 lakh crore in stimulus packages for recovery of the Covid-19-hit economy.

Of the amount, a Tk5,000 crore fund was formed for farmers from where they can get loans at 4% interest. Tk1,114 crore has been disbursed to 46,815 farmers till August.

A senior official of the central bank told The Business Standard, "Even after repeated urging, six banks have not disbursed any loans to farmers under the package. So, the package has faced low disbursement even four months after it was formed."

Another Tk3,000 crore stimulus fund was formed for low-income people and small businesses. Money from the fund is also provided at a 4% interest through non-governmental organisations or microfinance institutions.

The government also provided Tk2,500 in Eid bonuses to 50 lakh helpless families, each, though no-frills accounts. To this end, the government needed to allocate Tk1,250 crore from the budget of the current fiscal year.

As of June, no-frills accounts of farmers had a deposit of Tk364 crore while there was Tk886 crore in social safety net accounts, Tk402 crore in freedom fighter accounts, and Tk247 crore in accounts of the extreme poor.