Due to less interest against deposits and rising cost of living in the country, deposit growth in the banking sector was the lowest in the fiscal year 2022-23 comparing to the previous four fiscal years.
However, experts say that people are losing interest in making investment in deposits due to a lack of trust on the banking sector over loan scams.
According to the Bangladesh Bank data, deposit growth in the banking sector rose by 8.40 per cent to Tk 15,95,260 crore in FY23 compared to the same period of the previous fiscal year.
But deposit growth in the banking sector rose by 10.92 per cent to Tk 11,81,620 crore in FY20 compared to the same period of the previous fiscal year.
Again deposit growth in the banking industry increased by 14.37 per cent to Tk 13,51377 crore in FY21 compared to the same period of the previous fiscal year.
Deposits in the banking sector grew by 8.90 per cent to Tk 14,71,673 crore in FY22 comparing to the previous fiscal year.
The BB data also showed that in the last three fiscal years from FY20 to FY22, deposit growth in the banking sector rose constantly. But deposit growth slowed down in FY23.
Experts think that banks are offering average 4.38 per cent interest on deposits. But Bangladesh Bureau of Statistics (BBS) data showed that the annual inflation rate in Bangladesh stood at 9.69 per cent in July 2023. So, the deposit rate cannot meet the demand of daily essentials due to high inflation in the country, according to experts.
According to the banking regulator, recently people tend hold to cash in their hands. Cash in people’s hands surged to Tk 2.36 lakh crore in June 2023.
Dhaka Bank Managing Director & CEO Emranul Huq told The Business Post that the foreign exchange rate is high. Banks have to buy USD at high rate. As a result, banks are facing liquidity crisis.
“For a rise in the inflation rate in the country, people withdraw money from the banks to meet their needs. So, they cannot save money in banks,’’ he said, citing the BB data that recently people carry cash money in their hands. “That is another reason behind a decrease in deposit growth.”
Dr Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh (PRI), said BB will have to take steps to prevent money laundering from the banking sector. Otherwise, deposit crisis will deepen.
When money launderers do over-invoice from the country, they send dollars against the local currency, he explained. As a result, money supply decreases. If the banking sector has excess dollar, then the central bank gives money against dollar.