Improved stability drives deposit growth
Staff Reporter :
Bank deposit growth in Bangladesh rose by 7.9 per cent year-on-year in February 2025, according to the latest data from Bangladesh Bank, compared with the same month a year earlier.
Total deposits, excluding interbank and government deposits, stood at Tk 17,92,685 crore in February 2025, up from Tk 16,61,649 crore in February 2024. Deposits have been increasing by more than Tk 10,000 crore on average each month, reaching Tk 17,81,287 crore in January, Tk 17,76,747 crore in December, Tk 17,62,855 crore in November, Tk 17,55,217 crore in October, Tk 17,31,260 crore in August, and Tk 17,34,026 crore in July.
The steady rise suggests an improvement in depositor sentiment after months of volatility, liquidity shortages, and widespread concerns over the security of bank-held funds.
Deposit growth had been recorded at 8.28 per cent in January, 7.44 per cent in December, 7.46 per cent in November, 7.28 per cent in October, and 7.26 per cent in September, indicating a gradual recovery of depositor confidence following a prolonged period of financial instability and public mistrust.
Bankers have attributed the improved sentiment to the easing of political unrest following the fall of the Awami League government on 5 August 2024 and the subsequent installation of a new administration.
During the previous regime, the banking sector faced rampant irregularities, soaring defaulted loans, aggressive insider lending, and the controversial issuance of new banking licences to politically connected business groups.
Public concern peaked in mid-2024, leading to widespread withdrawals, particularly from private commercial banks associated with the controversial S Alam Group.
The central bank’s repeated assurances, coupled with direct liquidity support to weaker banks, have been instrumental in calming public anxiety.
Since October 2024, Bangladesh Bank has injected over Tk 30,000 crore into six financially distressed banks to help them manage withdrawal pressures. In addition, rising deposit interest rates have made banks more attractive to savers.
As a result, the amount of currency held outside the banking system declined to Tk 2.71 lakh crore in February, down from Tk 2.74 lakh crore in January and Tk 2.76 lakh crore in December.
In February, Tk 16 lakh crore was held in time deposits, while Tk 1.90 lakh crore was maintained in demand deposits, reflecting a continued preference for fixed savings instruments among depositors.
While the current figures signal a positive shift, experts caution that lasting stability will require comprehensive structural reforms. Legacy issues – such as non-performing loans, a lack of accountability in loan disbursement, and political influence – must be addressed thoroughly, they warned.
The central bank has already initiated steps towards reassessing bank mergers, revising regulatory oversight frameworks, and taking disciplinary action against wilful defaulters, contributing to the gradual restoration of depositor trust.
Meanwhile, loan disbursements have continued to rise, crossing Tk 22 lakh crore in February, compared with Tk 21.89 lakh crore in January and Tk 21.77 lakh crore in December.