The Price of Money - Boishakh 1432

 

Ketan Sheikh’s Column on Banking and Finance

The Price of Money

(Published in Shobdo Mukur Boishakh 1432 edition)

Financial Literacy and Bank Accounts

Boishakh means Hal Khata (traditional account book opening) and Hal Khata means the beginning of a new year’s financial planning. So, under the headline “The Price of Money,” we too will begin with discussions on your financial literacy, financial inclusion and fresh perspectives on money management. Today, I will discuss in the first part why financial literacy and banking inclusion are so crucial in our daily lives and in the second part, I will talk about how opening a bank account can be the first step in this process.

Banks and Our Daily Life

Many of us immediately think of banks when it comes to any kind of financial transaction. At the same time, many others remain distant from banks. Some of us panic at the mere mention of banking, feel distrust, consider it troublesome or lose patience amid complicated procedures and formalities. Even if we do have bank accounts, we rarely think deeply about banking services. In many families, we’re given extreme and conflicting views about money. Some believe that having just enough money at home is sufficient to live. Others believe that money is everything and that life should be a constant chase for wealth. Neither of these extreme beliefs truly includes proper financial literacy or banking inclusion. If they did, the condition of financial literacy and banking inclusion in our country wouldn’t be in such poor shape even after all these years of banking, as we’ll see from some statistics.

Statistics on Financial Literacy and Banking Inclusion

According to recent World Bank statistics, 21% of adults worldwide have no banking inclusion — meaning they do not use any bank account and conduct all transactions using cash or unsafe methods. This population essentially has no financial literacy. The challenge is even more complex in Bangladesh. Only 36% of adult women and 65% of adult men in our country are included in formal banking. Only 51% of adults in Bangladesh have a bank account for financial transactions. Of these, only 6% possess any kind of bank card and just 34% conduct banking transactions using digital methods (such as online platforms or mobile apps). The remaining 49% — those still excluded from banking — carry out transactions using cash or other non-bank (and relatively insecure) methods. 

If the 21% of the global population currently excluded from banking could be brought into the formal financial sector, the global investment market would grow by an additional 26%, tax evasion would decrease by 31% and financial crimes such as money laundering and corruption would be reduced by nearly 46% (World Bank Statistics, 2024). The statistics from Bangladesh deeply concern me. In a country where only half the population is included in formal banking, there is a much higher tendency and opportunity for tax evasion and financial crimes and corruption are more prevalent. We already see this happening in our country. Due to our lack of financial literacy, money is being laundered, authorities struggle to trace financial records in their efforts to combat corruption and unethical practices within certain banking circles have led to growing public mistrust toward banks in everyday life. People are becoming increasingly disillusioned with the banking system. Many banks are at risk of bankruptcy, leading to widespread panic about the safety of deposits.

According to the World Bank, women in our country are significantly behind men in terms of banking inclusion. This statistic is alarming to me — because women's lack of inclusion and financial literacy plays a significant role in the broader lack of recognition for their contributions, positions and responsibilities in our society and economy. A large segment of our workforce — such as drivers, domestic workers and security guards — also remains outside the scope of banking services. If this trend continues, our ability to mobilize savings will stagnate, local investments will fall short, fighting corruption will become nearly impossible and the problem of money laundering will persist.

This is happening because we are too late in understanding the true meaning of money. And realizing the meaning of money too late is of little use — the opportunity may already be lost. The first step to overcoming this situation is actually a part of our daily lives. That’s the purpose behind this writing. In this series, I will gradually present information, data and analysis that may encourage both men and women in families to think differently about banking inclusion and inspire all family members to get involved. I will also discuss the proper and positive use of different banking services in daily life so that we can all become informed, thoughtful, mature and independent in our financial decisions regarding inclusion. When we achieve this, we will be able to become financially self-reliant and empowered in our own lives.

This is happening because we are too late in understanding the true meaning of money. And realizing the meaning of money too late is of little use — the opportunity may already be lost. The first step to overcoming this situation is actually a part of our daily lives. That’s the purpose behind this writing.

In this edition, I will talk about the first step: opening a bank account.

First Step – Bank Account

The first step toward financial inclusion is opening a bank account in your own name, being fully informed about it and then independently managing it. We are an emotionally expressive nation. When building a family, women often hand over all financial responsibilities and transactions to the men without hesitation and men become accustomed to this. As a result, men tend to believe they have the right to know every detail and control the financial matters of the women in their lives. I don’t object to having access to financial information. What concerns me is the imposition of control over another adult's financial decisions within the family, disregarding their opinions and denying them the freedom to make independent financial choices.

We forget that we are mortal and our relationships are delicate and vulnerable. While building a family, we tend to ignore the fact that our spouse, domestic help, children or elderly parents may eventually have independent lives of their own, where they will need to be financially self-reliant. We also forget that by dismissing their financial opinions, we unknowingly devalue their role and contributions in the family. It is essential that every adult family member has their own bank account and is encouraged to manage it independently. To ensure this, they should be connected with an experienced bank official who can guide them in choosing the right account and provide necessary information, while giving due respect to their individual decisions.

We forget that we are mortal and our relationships are delicate and vulnerable. While building a family, we tend to ignore the fact that our spouse, domestic help, children or elderly parents may eventually have independent lives of their own, where they will need to be financially self-reliant. We also forget that by dismissing their financial opinions, we unknowingly devalue their role and contributions in the family. It is essential that every adult family member has their own bank account and is encouraged to manage it independently.

Rules for Opening a Bank Account

 For day-to-day financial transactions, there are two main types of bank accounts:

● Current Account

● Savings Account

To open either of these accounts, one generally needs a National ID, Tax Identification Number (TIN), passport-size photographs, proof of address (such as an electricity or gas bill), proof of income or funding source, income tax return documents and a referee or nominee's identification. The first step is to secure these documents for each adult member of the family. Earning members of a household typically open current accounts to deposit their regular salaries. Those who do not have formal earnings — but receive income from sources like house rent, personal allowances, gifts or household savings — can easily open a savings account.

Benefits of Having a Bank Account

Transparent Daily Transactions

Most savings accounts in banks now come with checkbooks and passbooks, allowing you to conduct or deposit financial transactions easily. Many banks also provide debit cards with savings accounts. Debit cards enable hassle-free transactions but one must fully understand the security aspects of using a card and act responsibly. If the primary earner of the family has a current account in a bank, other family members can easily open a savings account in the same bank with their recommendation. Through a debit card and the bank’s mobile app, they can manage their daily financial transactions. The bank will send you monthly statements detailing all transactions, helping you maintain transparency and control.

Earning from Savings

If you have a savings account, you can deposit the money you store in clay banks, milk cans or under mattresses into your account every month. Savings accounts generate income—either as interest in conventional banks or as a share of profits from investments in Islamic banks. Before opening an account, inquire about the interest or profit rate and choose your income source in accordance with your religious values.

If you don’t withdraw money frequently from your savings account, your balance continues to grow with interest or profit. In other words, your money stored at home can now generate more income for you. Your money earns on your behalf.

If your job requires you to maintain a current account, consider opening a savings account for your spouse at home and transferring a portion of your income there every month. They can manage your savings, while you handle daily expenses. A current account may not offer interest or profit and even if it does, the rate is much lower than that of savings accounts. However, current accounts generally have higher transaction limits, while savings accounts are more restricted. That’s not necessarily a drawback—if you have both types of accounts, you can manage transactions more wisely.

Financial Security and Planning for the Future

Money stored in banks is far more secure than what’s kept at home. It cannot be withdrawn impulsively, making it a solid base for future financial goals.

Let’s say you earn a regular income deposited in your current account. Open a savings account for your spouse (or yourself, or another member of family) and together plan to save for major future goals like building a house, buying a car or funding children’s education or weddings. Assign them the responsibility of saving toward these goals. This will strengthen your family’s finances and help implement your plans with shared responsibility and support. Money is an engine of trust building too .... shared financial responsibility can form the foundation of a trustworthy family relation.

Family Financial Literacy and Responsibility

Savings or transaction accounts can be opened for other family members as well. For the security of their income, you can encourage and help them open bank accounts. Most banks now allow non-resident Bangladeshis to open accounts with similar documentation (they will require evidence of foreign income). Many banks have also introduced savings accounts for minors. Include your overseas family members or children in financial literacy and banking. The benefits will be ours collectively. We will grow into a self-reliant, aware and thoughtful nation in terms of financial decisions and responsibilities. Then no one will be able to deceive or corner us with banking or financial corruption.

Self-Reliant Financing

To understand the true meaning of money and make it meaningful, you must first open a bank account. And if you already have one, you must ensure others in your family do too. Otherwise, they will remain dependent, insecure, and socially marginalized. Their role and contribution within the family or society or the financial system of the country will not be properly valued. They may suffer from inferiority or feel insignificant. That’s not the life we want for anyone.

A family is built on the intelligence, wisdom, and contributions of its members. An economy is formed through the collective financial foresight and efforts of many families. We all deserve recognition for this. And at the heart of it lies our financial literacy, inclusion, self-reliance and responsibility—starting with opening a bank account.

This is exactly what happens in every developed country. We are no exception.

In this Bangla New Year, as you open new financial ledgers (Hal khata), take a fresh look at the value and the price of money. If you already have a bank account, consider renewing it or opening a new one. And if most of what I’ve written is already known to you, then "congratulations! you are financially literate".

But that means you bear more responsibility now. You must think about the financial literacy of your loved ones. It will be your duty to help them open their financial ledgers this year. Introduce them to banking and encourage financial awareness. 

Who knows? Maybe one of them will become even more skilled in financial management and banking services than you or me. And when that happens, we will be the happiest—won’t we?

©Author

Shobdo Mukur e_Mag