Call grows over 'alternatives' as banks fail to reach unbanked people
Economists advocate nat'l financial inclusion strategy
FE Report    |    
Published : 24 Apr 2017, 21:43:58

As traditional banking is failing to include increased unbanked people into the banking, there might be 'alternative' financial institutions for unbanked people, especially in rural areas, speakers said Monday.
They urged the government to launch awareness as bank-related knowledge helps people understand about its services and necessity, thus fostering financial inclusion and inclusive growth.
"Regional banks or specialised rural banks and rural financial institutions will have to play a key role in financial inclusion for inclusive growth," said Professor Baqui Khalily, advisor and former executive director of Institute for Inclusive Finance and Development.
His remarks came at a discussion on "Financial Inclusion and the Banking Sector: Some Critical Issues" held at the Lakeshore Hotel in Dhaka.
Bangladesh Institute of Development Studies (BIDS) organised the discussion as part of its two-day annual event called BIDS Critical Conversations 2017 with the theme "The Bangladesh Journey: Accelerating Transformations".
Noting that banks have limitations, Professor Khalily said the existing banks and non-bank financial institutions could provide services as long as they can recover transaction costs. "So, banks will not go any places where they make losses. The government must take specialised measures that would help improve financial inclusion," he said.
He said that the no-frills accounts including Tk 10 accounts for farmers, student accounts, banking for street children have not contributed to inclusive growth but such initiatives increased access to financial system and financial literacy among the people.
He said only banks could not solve the problem of financial exclusion, multiple stakeholders and institutions would have to be involved with financial inclusion activities.
Chief economist at Bangladesh Bank Faisal Ahmed said a national financial inclusion strategy needed to be developed by the stakeholders for promoting inclusive growth in the country.
He said all development partners including central bank, ministries and other organisations of the financial system should find out a cohesive way for formulating a strategy for financial inclusion.
Mr Ahmed said many products of financial inclusion were experimented and many initiatives were taken under the inclusion programme by the central bank.
Many countries have got national financial inclusion done by development partners, he said stressing the need for deepening financial inclusion.
He also said there must be an impact studies on the financial inclusion services.
Managing Director of Dhaka Bank Syed Mahbubur Rahman said rural savings were larger than rural loans, which he called a positive side.
He said private banks had obligation to their clients and they couldn't play with client's money.
The 10 taka accounts will grow habit among marginal people to maintain account and give them access to the financial system, said Biru Paksha Paul, former chief economist of Bangladesh Bank.