Crore taka bank account holders grow despite economic crisis

Despite the economic crisis in the country, the number of crore taka bank account holders increased in 2023, although the growth rate was slightly lower than in the previous year.

According to data from the Bangladesh Bank, the number of crore taka account holders increased by 6,962 within one year.

By the end of December 2023, the total number of individual and institutional crore taka account holders had reached 116,908, marking a growth rate of 6.33% compared to 7.80% in 2022.

Bankers say numerous individuals have suffered business losses due to the economic crisis, forcing many to either cease operations or downsize their businesses.

In recent times, the lower and middle classes have borne the brunt of multiple crises and escalating commodity prices, making it increasingly difficult for ordinary people to meet their family expenses. Many small companies find themselves unable to conduct business, and depositing money in banks has become a distant possibility for many, resulting in the depletion of their savings.

Despite these challenges, a certain segment of society has seen an increase in income, highlighting the prevailing inequality in society, a situation lamented by the bankers.

According to central bank data, at the end of last December, the total number of accounts in the banks was 15.35 crore, collectively holding deposits exceeding Tk17.49 lakh crore.

Among these, 116,908 accounts had deposits of more than Tk1 crore. As of the end of September, the number of crore taka accounts stood at 114,055.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), noted that the majority of people are suffering during the country's crisis, while a particular class is capitalising on it.

"We are purchasing goods at higher prices, indicating that someone is selling them at inflated rates. Consequently, money is accumulating in their accounts. This scenario underscores the absence of equitable wealth distribution, leading to the concentration of wealth among certain segments of the country," he pointed out.

Asked about the decrease in the growth rate of crore taka account holders, he said it is not necessarily indicative of increased earnings. Instead, he emphasised the concentration of resources within a particular class, with some individuals also laundering money abroad.

"Above all, while poverty may be declining in our country, inequality is escalating at an alarming rate. The Bangladesh Bank and the National Board of Revenue must collaborate digitally to address these issues. Despite the increase in the number of millionaires, our revenue remains stagnant. This is where the weakness lies," he remarked.

He expressed the confidence that the country's revenue will witness a boost if these two organisations worked together effectively.

There are two types of accounts that have the most money. Among them, according to central bank data, at the end of December 2023, the number of millionaire accounts holding Tk1–5 crore was 92,516. The amount of money in these accounts was Tk1.94 lakh crore.

Besides, the number of such accounts having Tk5-10 crore was 12,652. The total amount of money in these accounts was Tk89,451 crore.

According to data analysis by the Bangladesh Bureau of Statistics (BBS), the number of crore taka account holders in the country was only five in 1972, rising to 47 by 1975. Subsequently, it gradually increased to 19,163 by 2008.

During a pre-budget meeting with the National Board of Revenue (NBR) last month, the Bangladesh Economic Association observed that only 18 lakh people pay taxes in the country. Among them, 10 lakh are engaged in government and other jobs. However, the expected number of taxpayers should be more than 78 lakh. This indicates that 87% of the rich and upper-middle class do not pay income tax.

The Economic Association also highlighted the fact that the National Board of Revenue (NBR) has consistently failed to meet its revenue collection targets. One of the conditions of the IMF loan is to increase revenue collection and enhance the efficiency and capacity of tax administration.

However, in the current financial year, the NBR has again lowered the revenue collection target by Tk20,000 crore. The initial target for revenue collection in fiscal year 2023-24 was set at Tk4.30 lakh crore. Due to the reduction in the target, it has been adjusted to Tk4.10 lakh crore.