Bank is said to be the holder and carrier of economy and it is the last hope of savings for many marginalized people. At one time, people used to deposit small amounts of money in clay banks. Now people's saving style and habits have changed a lot and the trend of saving is towards bank. Banking sector is one of the most important sector of financial sector of the country. Mobile banking, agent banking, sub-branches have reached people's doorsteps. Due to these reasons, its scope is gradually increasing and at the same time, the overall service quality of the banking sector is increasing. Banking system is digital and modernized, so people are getting faster banking services. Banking sector is the major driver of economic growth of any country. The banking sector plays the biggest role in various activities including saving money, transacting money, providing various types of loan services, ensuring short and long term investment, development of SMEs.
Recently some negative news in the media about banking has created fear, anxiety and apprehension among the customers. The matter has been further exaggerated in the form of rumors on social media and has spread to the cities, ports and remote areas. Panic has been created among the common people by using the words looting, bank robbery, bank bankruptcy for some irregularity in loan distribution. As a result, customers panicked and started withdrawing cash from banks and keeping it in their homes and offices. In fact, such incidents are more risky for both money and customers' lives. Recently, the Chief Secretary to the Prime Minister said in an event in the capital that the rumor that there is no money in the bank has been spread in the form of rumours. So common customers have withdrawn 50 thousand crores from the bank out of fear. Now, however, those customers have started depositing money in the bank again that is why Bangladesh Bank has been forced to assure customers by publishing a notification that deposits in the bank are completely safe, there is no shortage of money.
Banks cannot disburse all of the deposits collected as loans if they wish, there is a legal obligation to keep a certain portion of the deposited deposits in the central bank as a reserve which is used as an emergency fund. The central bank always plays the role of rescuer in case of possible liquidity crisis of the bank and its main responsibility is to protect the interests of depositors, that is why there is a sharp surveillance in the banking system and above all the banking system is protected by various rules and laws and the government has maximum vigilance to protect the safety of people's deposits. In that case, there is no need to worry about the security of the deposit. But it is true that due to various reasons, people's confidence in the banking sector is slowly developing in the country. Especially in the last decade, several big loan scams in the banking sector have given rise to a lot of discussion and criticism.
According to media sources, the total deposits in the bank sector at the end of October 2020 were Tk 12,51,120 crores, which increased to Tk 13,88,062 crores in October 2021 and during this period the deposits increased by Tk 1,36,942 crores. On the other hand, in October this year, it has increased to Tk 14,90,000 crores. According to the same source, in October 2020, the bank's loans and bills (import and domestic) were Tk 11,17,386 crores. In the same month of 2021, it increased to Tk 12,22,877 crore. Loans increased by Tk 1,05,491 crores in one year of COVID-19. On the other hand, in October this year, debt and bills increased to Tk 14,00,345 crore, that is, the debt and bills have increased by Tk 1,77,468 crores in the last one year.
As per Central Bank rules, 17 percent of the deposits collected by the banks are deposited in the Central Bank as CRR (Cash Reserve Rate) and SLR (Statutory Liquid Ratio) and Islamic banks keep 9 and a half percent deposits. Banks can lend or invest the rest of the money. Accordingly, after keeping CRR and SLR in the hands of banks, the additional liquidity in October 2020 was Tk 1,82,990 crore, which increased to Tk 2,20,865 crore in the same month of 2021. In September this year, however, excess liquidity has come down to Tk 1,70,497 crore, that is, in 11 months, additional liquidity has decreased by Tk 50,368 crores.
Economists say that banks and capital markets are price-sensitive sectors and any news about these sectors needs to be scrutinized and thought about the extent to which they affect the market system and consumers in general. In fact, price sensitive information refers to information that directly or indirectly relates to a company and which, if disclosed, could materially affect the price of the company's securities. Deposits, credit status, import and export, remittance flow etc. of the banking sector are closely related to the country's economy and common people. Bangladesh Bank, relevant government departments or ministries, Securities and Exchange Commission are the regulatory authorities to see if there is any irregularity or violation of rules in these sectors, but before that, if the media tries to frame those institutions as criminals, then it will convey the wrong message to the consumers, that has happened recently and customers are panicking and withdrawing cash and hoarding it. It is not a positive news for the country's economy and banking sector. It is natural that the media will expose any injustice or irregularity in the banking sector, but care should be taken not to create unnecessary fear, anxiety, anxiety and rumors and give wrong messages to the customers. If the person or institution concerned is identified as a criminal before the crime or irregularity is disclosed or investigated, it is really worrisome, that is why the media has to play a responsible role before serving and publishing these price sensitive information.
In order to spread inclusive financial or banking services to the marginalized people, the government has introduced services such as mobile banking, agent banking, sub-branches, ATMs, digital wallets etc. and its main objective is to include the underprivileged sections of the society in financial and banking services at low or no cost. A vivid example of this service is the provision of bank account opening for farmers for just Tk. 10, garment workers or school students for Tk. 100. In the past few years, financial inclusion activities have expanded greatly after the introduction of these new services under the guidance of the central bank. Whereas at the end of 2008, the total number of depositors in banks was 3 crore 76 lakh, by the end of 2013, this number had increased to more than 6 crore. On the other hand, according to the latest data of Bangladesh Bank, till June 2022, the number of depositors in the bank sector stood at 12,95,14,513 and as such the deposit was Tk. 15,73,823 crore. It is an unprecedented achievement for financial inclusion.
Economists also call the banking system as the brain or heart of the country's economy. The banking sector is playing a major role behind the development and progress in the country. The role of the banking sector in the country's import, export, investment, employment generation and remittance collection is unparalleled. People are able to open bank accounts and receive remittances using digital technology at home. But at the same time there are many challenges in the banking sector. Bad loans, establishing good governance and stopping political patronage are the biggest challenges facing the banking sector, that is why many people are talking about reforming the financial sector of the country. But it is also true that unwavering trust of people towards banks or financial system is very important. If trust is lost or marginal people turn away from banks, it is bound to collapse the entire economy and other systems, that is why the media has to play a careful role before serving and publishing these price sensitive information.
Worryingly, the recent negative coverage of the banking sector is sending the wrong message to customers. Banks are closed or account money is being looted, even a check of one lakh Taka is not being cashed in the bank, some rumors about the bank have been spread online. Expatriates are discouraged from sending remittances through legal channels. Recently, a trend has been observed to promote the illegal hundi business as an alternative to the legal route. Rumors about banks have had some effect on the consistent trend of encouraging illegal hundi. While most people don't believe the rumours, a class of people are rightly confused. As a result, many are hoarding cash out of fear and panic, which is ominous for the country's economy. If it continues like this, it may disrupt the liquidity flow of the banking sector and bring business and trade to a standstill, that's why at this moment fear, anxiety and anxiety should be removed and the customers should be directed to the bank at any cost.
Md. Zillur Rahaman is a banker
and a columnist.