Deposits in foreign banks increase by Tk 6,000 crore

Staff Reporter :
Deposits of nine foreign banks operating in Bangladesh increased by Tk 6,000 crore in the fourth of the previous year which is 8.57 percent more than the previous quarter, according to the quarterly data on scheduled banks by Bangladesh Bank (BB) published on Tuesday.
Due to this, the deposits in foreign banks in the country stood at Tk73, 980 crore at the end of the December 2022, which was Tk68, 143 crore at the end of September quarter.
Compared to the December quarter of 2021, the growth of deposits in December quarter 2022 has been Tk9, 118 crore or 14 percent. In December 2021, deposits at foreign banks stood at Tk64, 861 crore.
However, local public and private banks were scrambling for deposits in the period. Despite, offering higher deposit rates than foreign banks. Only Islamic banks altogether lost Tk 11,426 crore in deposits in the last three months, according to the October-December, 2022 quarterly report on Islamic banking of the central bank.
Hence, liquidity status at the end of the last quarter of December,2022 stood at Tk 3,83,673 crore in the country’s banking sector, excluding specialized banks while at the end of December 2021, the amount of liquidity was Tk 4,38,374 crore. According to the calculations, the liquidity in the banking sector has decreased by 54 thousand 701 crore in the span of one year, the BB data said.Analysts said, the major reasons behind the deposit growth downturn were allegations on loan irregularities and frauds. As a result, customers lost their confidence and withdrawn deposits mainly as a precautionary move especially from full-scale Shariah based Banks.
Declined remittance inflows and high inflation had drained liquidity out from the country’s banking system during the last quarter of the previous year, they added.
Managing Director (MD) of a foreign bank told to the journalists wishing not to be named that “When the economy is normal, people invest more in risky sectors. When the economy becomes abnormal for various reasons, people tend to invest more in places where security surpasses the profit”.