Bangladesh Bank has passed an ordinance in 2010 asking all the banks in Bangladesh to open school banking branches. This new scheme is planned for both the students and their parents so that they can save a significant amount of money after a certain period of time. This new scheme is expected to teach the students the necessity of saving from an early age.
The School Banking System suggests that there are going to be branches of banks in school so that the kids can perform the necessary banking activities from school. This will give them an early experience of how to execute bank formalities and procedures. This will also increase their money management skills.
This decision was made by Bangladesh Bank in November 2010, when the Government felt the need to teach the students money management skill and also to let them help the economy of Bangladesh.
Eastern Bank Limited (EBL) was the first bank to start the School Banking System. They named this scheme ‘EBL Junior’. EBL has opened up 500 students banks so far and they are expecting it to double up soon.
Before EBL, Muslim Bank started a school banking system in 1960 and Arab Bangladesh Bank started the system back in 2003. However, neither of these two banks got any positive response. So far, about 20 banks have opened up School Banking System.
The Ordinance of 2010 states that any students from the age of 11 to 17 can open an account in a bank that has this system running. All they need are three photographs of themselves and one of a parent or guardian. This will be counted as a Joint Account between the student and the parent. The advantages of opening such account are:
- Waiver from fees and charges,
- Free internet banking,
- Waiver of minimum balance required,
- Students will get a debit card with a lower cost, and many more.
Bangladeshis are not very aware about the banking system and most of them are a little superstitious about it. Most think that banks are there to rob them or cheat them. But the new generation is overcoming these superstitions and are leaning towards the banking system.
Along with the ‘EBL Junior’ scheme by Eastern Bank Limited, some other banks also received positive response from their school banking schemes. Such as:
- MTB Junior and MTB graduate by Mutual Trust Bank
- Future Star Account by BRAC Bank.
- Mudaraba Shikkha by Shahjalal Bank.
Banks do not regard the school banking system as a moneymaking business. However, they are expecting that if they provide good service to the students, they might become future customers.