The number of bank accounts having more than Tk 1 crore in deposit has increased almost three times along with a five times rise in the deposited money in those accounts over the last 10 years, thanks to rising income inequality.
Economists said that such rise in high net-worth population indicated that the rich were becoming richer and the poor poorer, raising concern over possible social grievance and deterioration in the law and order situation.
According to Bangladesh Bank data, the number of accounts with Tk 1 crore in deposit has increased by 288.5 per cent to 56,650–76,286 at the end of March this year. The number of such accounts was 19,636 in March, 2009.
Furthermore, the deposit in those bank accounts has increased 500.89 percent or to Tk 4 lakh crore–Tk 4.8 lakh crore at the end of March this year. The deposit in the accounts was Tk 79,865.95 crore at the end of March, 2009.
BB data also shows that the deposit in those bank accounts makes up 44 per cent of the total Tk 10.88 lakh crore deposit in the country’s banking system as of March this year against the 30.78 per cent of the total Tk 2.59 lakh crore deposit 10 years earlier.
Former caretaker government adviser AB Mirza Azizul Islam on Tuesday told New Age that the relatively high rate of economic growth combined with rising inequality in income distribution was the major reason behind such trend in the bank deposit by a segment of people.
‘Rising inequality is not desirable in any way as it can create social dissatisfaction and deteriorate the law and order situation,’ Azizul said.
The central bank and National Board of Revenue should dig the sources of fund of the depositors as to whether the money was earned legally or illegally, he suggested.
The number of such accounts was only five in 1972 and 47 in 1975.
The figure continued to grow and stood at 98 in 1980, 943 in 1990, 2,594 in 1996, 5,162 in 2001, 8,887 in 2006 and 19,163 at the end of 2008.
Former Bangladesh Bank deputy governor Khondkar Ibrahim Khaled told New Age: ‘It’s an outcome of the government’s economic policy that runs counter to the country’s constitutional prescription.’
‘In the constitution, the country’s economic policy was stipulated to be based on socialism, instead we are pursuing a crony capitalistic policy,’ he said.
Such economic policy results in high economic growth without checking whether the source of income is legal or illegal, the former BB deputy governor said.
Thus, he said, although the country has been achieving high GDP growth income disparity among people has been growing significantly.
In Gini index, the current score of Bangladesh is .495 reflecting that the country’s rich people are becoming richer and the poor becoming poorer, Khaled said.
In Gini index, the 0 score represents perfect equality and 1 perfect inequality.
The country has deviated from the vision of the country’s founding father as well, he mentioned.
Shifting the country’s economic policy to socialism would help end such rising income inequality, Khaled said.
In contrast, the World Bank ‘Bangladesh Poverty Assessment’ report released on Monday estimated that more than half of the country’s population were now vulnerable to poverty since the value of their consumption stood close to the poverty threshold of $1.9.
The WB report came at a time when the government has been implementing several mega projects while the country’s GDP posted an 8.13 per cent growth in the immediate past fiscal year 2018-19 and has been projected to attain an 8.2 percent growth in 2019-20.
Speaking at the WB report launch event, former caretaker government adviser Hossain Zillur Rahman said that the government policy makers should realise that the current poverty reduction approach through an accelerated economic growth was not working.
At the event, WB Bangladesh country director Mercy Tembon said that poverty decreased unevenly across the country and as a result the historical gap in poverty between the eastern and western divisions re-emerged since 2010.
As BB data shows, the number of accounts having over Tk 50 crore in deposit has increased almost 10 times or to1,042 over the past 10-year period.
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