The New Nation - Internet Edition

ABOUT 87 per cent of the total population is still left out of the banking system despite the proliferation of the private sector banks over the last two decades. The Bangladesh Bank governor recently disclosed at a function that only 13 per cent of the population use banking services with 19 million accounts and urged the commercial banks to come up with 'innovative schemes' to widen their coverage and services. The poor coverage of banking services indicates rising social inequality and only 13 per cent people control most of the wealth, as one economist pointed out.

This, too reflects that most of the people do not have 'enough disposable income' to save. The banks are also not offering any incentive to small savers. One economist pointed out that during the Pakistan period banks were found wooing even school students to open bank accounts and helped develop the habit of saving among younger generation. But the banks, nowadays, totally forget this vital aspect and rather go preferably for business only with 'rich clients'. If the banks concentrate more on inclusion of people, they could perform more corporate social responsibilities than what they are doing now.

The banks should expand their operations to the rural areas for bringing more people under their coverage and help reduce exploitation of the poor loan-seekers from a section of micro-credit providers. The roles of two banks - Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank - are worth mentioning in this connection for the development of the rural areas, but they are dependent on refinancing scheme of the central bank. They should be independent and focus more on recovery, as the agriculture credit recovery is quite 'satisfactory'. Though banks take pride in higher recovery of rural credit, there is a gradual decline in net capital flow to the rural economy.