Deposits in no-frills accounts increasing

In the December quarter of 2024, the number of millionaire depositors in the country's banking sector increased. At the same time, deposits in No-Frills Accounts (NFA) also saw a rise. According to the latest report from Bangladesh Bank, by the end of December, deposits in these accounts stood at 4,685 crore BDT, up from 4,465 crore BDT in the same period of 2023. This marks an increase of 220 crore BDT or 4.69% over the year.

Not only did deposits rise, but the number of these accounts also increased. In the last three months, the number of NFA accounts grew by 251,512.

To provide banking services to marginalized communities, the government introduced 10, 50, and 100 BDT accounts in 2010, known as No-Frills Accounts (NFA). The key benefits of these accounts are that there is no requirement for a minimum balance and no service charges or fees.

Industry experts suggest that these accounts were introduced under various initiatives of Bangladesh Bank to ensure financial inclusion for all segments of society. A few months ago, the country faced significant political instability, but as the situation improved, confidence in the banking sector began to return. As a result, even low-income individuals have started depositing money in banks again. Additionally, Bangladesh Bank, the financial sector regulator, has undertaken several initiatives to stabilize the banking sector, contributing to the return of deposits.

It is reported that the initiative to allow 10, 50, and 100 BDT accounts was launched in 2010 as part of financial inclusion efforts. Apart from farmers, these accounts also cater to garment workers, ultra-poor individuals, and social safety net beneficiaries. Among them, farmers hold the highest number of accounts and deposits.

According to Bangladesh Bank, deposits in NFA accounts stood at 4,282 crore BDT at the end of September 2024. By December 2024, this amount increased to 4,685 crore BDT, marking a growth of 403 crore BDT or 8.60% in just three months.

At the end of September 2024, the number of NFA accounts in banks was 27.87 million. By December 2024, this number increased to 28.12 million, meaning that 251,512 new accounts were opened in just three months.

Bank officials noted that after the formation of a new government through student-led mass protests, uncertainty arose regarding the security of the banking sector. Many people withdrew their deposits, including those from No-Frills Accounts. However, as Bangladesh Bank restructured bank boards, confidence in the sector began to rebuild by November-December.

Additionally, remittance inflows through these accounts increased. At the end of December 2023, total remittances received through NFA accounts amounted to 772.79 crore BDT, reflecting a 6.16% increase compared to September 2024.

Although school banking accounts fall under the NFA category, students under 18 years old can open an account with just 100 BDT. However, social safety net beneficiaries can open accounts with as little as 10 BDT. These accounts make up 37.12% of total NFA accounts, making them the largest category.

The second-largest category belongs to farmers, accounting for 36.95% of total NFA accounts. Meanwhile, ultra-poor individuals hold 11.83% of these accounts.