Bank deposits drop 30pc amid COVID-19

HM Murtuza | Published: 22:22, Nov 27,2020


Deposits in banks accounts, opened for disbursement of funds under the government’s social safety net programmes, dropped by 30.13 per cent or Tk 261.1 crore in the April-September period when the country was worst hit by the economic impacts of the coronavirus outbreak.

Economists said that the savings erosion in those accounts was testament to the economic hardships faced by the beneficiaries of the government’s social safety net programmes.

The countrywide shutdown, implemented by the government after the outbreak of coronavirus on March 8 and spanning around two months, has hit the poor people in the country the hardest.

Prompted by the financial hardships, low income earners were forced to run down the last of their savings, resulting in a sharp decline in their bank deposits.

The latest Bangladesh Bank data showed that deposits in the bank accounts of the social safety net beneficiaries dropped to Tk 605.36 crore in September from Tk 866.46 crore in March.

The deposits in September this year was even Tk 69.57 crore lower than the deposits of Tk 674.93 crore in December last year.

The government relaxed the shutdown from May 31 but the country’s economic pace was yet to return to the pre-coronavirus levels as businesses were struggling to thrive by minimising costs, including laying off workers, with no prospects for fresh investments.

The deterioration in private sector investments, import of capital machinery and industrial raw materials bore witness to the bleak economic outlook as businesses were yet to regain their confidence.

The country’s private sector investments returned to the downward trend with just 8.61 per cent growth in October after recovering to 9.48 per cent in September from 8.2 per cent in March.

Speaking about the recovery of the economy, Policy Research Institute executive director Ahsan H Mansur told New Age on Thursday that the economic depression would linger and might stay till mid or late next year.

Former interim government adviser AB Mirza Azizul Islam told New Age that the job creation and employment situations would deteriorate further in the coming days.

Stressing the effective implementation of the social safety net programmes, Mirza Aziz said that questions had been raised about the proper disbursement of the existing social safety net programmes.

Given the bleak economic outlook, the irregularities in the disbursement process of the programmes should be brought under control so that people can benefit from them and survive during the coronavirus outbreak, he said.

Following the COVID-19 outbreak, the government started to implement a Tk 1,250-crore financial aid project to disburse Tk 2,500 among 50 lakh facilities each.

However, irregularities surfaced soon after the disbursement process started.

Although deposits in the bank accounts of the beneficiaries of the government’s social safety net programmes dropped significantly, the number of such accounts increased by 8.7 lakh to 77.34 lakh at the end of September from 68.64 lakh in March this year. 

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