Bank deposit growth edges up in July as confidence returns
In June, deposit growth had slowed to 7.77%. By the end of July, however, it rose to 8.42%
Highlights:
- Bank deposits in Bangladesh grew 8.42% in July 2025
- Growth slowed earlier, peaking at 10.43% in February 2024
- Lower treasury bill rates redirected funds to banks
- Banking reforms and mergers gradually restored public confidence
- Remittance inflows and reduced Sanchaypatra rates boosted deposits
- Currency outside banks declined, showing rising trust in banks
Growth in bank deposits in Bangladesh picked up slightly in July this year after months of decline, reaching close to 8.5% at the end of the month.
In June, deposit growth had slowed to 7.77%. By the end of July, however, it rose to 8.42%.
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According to Bangladesh Bank data, the total volume of deposits stood at Tk18.80 lakh crore in July 2025, compared with Tk17.34 lakh crore in July 2024.
Lower interest rates on treasury bills and bonds have redirected funds to banks.
Although the growth remains in single digits, bankers and economists consider the turnaround a positive signal for the banking sector, which has been struggling to attract deposits since February last year, when growth peaked at 10.43%. Following the government change later in August, deposit growth slowed further amid concerns over financial stability.
They also pointed to several factors behind the slight rebound in deposit growth.
Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said lower interest rates on treasury bills and bonds have redirected funds to banks.
"Deposits have increased a little as treasury bills and bond rates fell. Some banks have also worked actively to boost liquidity, which helped raise their deposits," he told The Business Standard.
Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said the growth is broadly aligned with inflation and reflects reforms undertaken in the banking sector.
"When banks merged, some people withdrew money and there was a crisis of confidence, particularly with Islamic banks. But steps taken by Bangladesh Bank have helped restore trust, and deposits are growing again," he said.
He further noted that steady remittance inflows were also improving money circulation. "Many families put their money in banks if they have confidence in them. Although there was a temporary crisis of trust, confidence is returning gradually," he added.
Md Touhidul Alam Khan, managing director and CEO of NRBC Bank, said, "The banking sector in Bangladesh is experiencing deposit growth, driven by restored public confidence, government and central bank reforms, and the upcoming national election.
"The reduction in Sanchaypatra interest rates has made bank deposits more attractive, while competitive rates and innovative products have further boosted inflows."
He added that the end of the tax year in June, formalisation of parts of the economy and regulatory requirements for government projects and institutions to channel surplus liquidity into banks also contributed to the rise.
"At NRBC Bank, we are dedicated to maintaining this momentum by actively collecting CASA (current and savings account) deposits through our extensive nationwide network, while delivering value-added services to our customers," Touhidul said.
Currency outside banks falls
Data also show a fall in money circulating outside the banking system. Currency held outside banks stood at Tk2.87 lakh crore in July, down from Tk2.96 lakh crore in June, a decline of Tk9,157 crore in a month.
A deputy managing director of a private bank, requesting anonymity, said, "As confidence in the banking sector is returning, some money has come back through banking channels. But not all of it goes to banks, some is also invested in other sectors."
