Government must check sources of money of growing fat bank accounts

Published: 00:00, Oct 14,2019 | Updated: 00:11, Oct 14,2019

 
 

THE number of bank accounts with more than Tk 10 million in deposit having been almost tripled — by 288.5 per cent, to be precise, to 56,650–76,286 as of March from 19,636 as of March 2009 — in the past one decade suggests a rising income inequality and the failure of the government to evenly distribute the benefits that the economy has created in the period. The amount of money deposited in such bank accounts, in a further mark of worry, has registered, as Bangladesh Bank data show, a five-time increase — by 500.89 per cent to Tk 4,000–4,800 billion as of March from about Tk 798.65 billion as of March 2009. Yet, what remains further worrying is that the amount deposited in such accounts account for 44 per cent of the total Tk 10,880 billion deposit in the banking system as of March which was 30.78 per cent of the total banking system deposit of Tk 2,590 billion a decade ago. The number of accounts having more than Tk 10 million in deposit was five in 1972, 47 in 1975, 98 in 1980, 943 in 1990, 2,594 in 1996, 5,162 in 2006 and 19,163 in 2008.

A relatively high rate of economic growth along with an increasing inequality in income distribution is blamed as a major reason for such a trend in bank deposits. An increasing income inequality is in no way desirable. The Gini coefficient of income inequality has largely been static at 0.482 since 2016, up from its previous mark of 0.458 in 2010, only 0.02 short of 0.50, which is said to pose high risk of social unrest despite a high growth of the gross domestic product. Experts largely blame the situation on the government’s economic and development policies which go against the liberation war promises of equality, human dignity and social justice. Such policies result in high economic growth — the growth of the gross domestic product having been posted at 8.13 per cent in the immediate past financial year and projected to reach 8.2 per cent in the current financial year — without checking whether the source of the income is legal. Despite such a high economic growth, income inequality continues to grow significantly. The World Bank’s Bangladesh Poverty Assessment report, released on September 30, estimates that more than a half of the population is now vulnerable to poverty as the value of their consumption has stood close to the poverty threshold of $1.9. Poverty is also estimated to have decreased unevenly, especially along the eastern-western divide within the country since 2010.

All that has happened suggests that income inequality is growing while the government’s economic and development policies have mostly failed to create any impact on poverty reduction despite an accelerated economic growth. While the government must now examine the legality of the money deposited in a growing number of big, fat bank accounts and hold to accounts the holders in cases of irregularities, it must also revise its economic and development policies so as to arrest the increase in income inequality.

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