Bank deposit growth exceeds 8% in Jan after 4 months 

Deposits in the country's banking sector grew by 8.28% in January this year after remaining below 8% for the last four months of 2024, according to central bank data released today.  

Bankers attributed the prolonged low deposit growth to high inflation, reduced liquidity, and customer distrust in certain banks.  

Deposits grew by 7.44% in December 2024, after standing at 7.26% in September, 7.28% in October, and 7.46% in November, the data showed.  

The banking sector last saw such low deposit growth in February 2023, when it stood at 6.86%.  

Mashrur Arefin, managing director of City Bank, said at a recent roundtable that loan defaults and liquidity crises in many banks have eroded customer confidence, leading to sluggish deposit growth in the overall banking sector.  

"However, good banks have seen over 30% deposit growth, indicating that customer trust in them remains strong," he added.  

The Awami League government fell during the mass movement of July-August last year, following various economic crises, including the dollar shortage, declining reserves, and reduced remittances.  

While the interim government improved remittances and the foreign currency position, domestic private credit and deposit growth showed little improvement.  

Despite widespread violence and chaos in August last year, the central bank reported a 9.50% growth in bank deposits. The previous growth of less than 10% was 9.80% in October 2023.  

According to data from the Bangladesh Bank, deposits in the banking sector reached Tk17.76 lakh crore in December 2024, up from Tk16.45 lakh crore in the same period of the previous year.  

A senior central bank official said deposit growth should exceed 10%, and ideally range between 12-14% for a country like Bangladesh.  

The managing director of a state-owned bank told The Business Standard that the low growth in deposits is due to several factors.  

He explained that people save only after meeting their daily needs, but with inflation near 10% and income growth below 5%, savings have been limited. Additionally, media reports on loan irregularities in some banks have left people cautious, resulting in stagnant deposits.  

He believes that if law and order are restored and customer confidence in banks is regained, deposit growth will improve.  

In January 2025, about Tk2,140 crore that had been outside the banking system returned to banks. By the end of January, the total amount of money outside the bank stood at Tk2.74 lakh crore, slightly down from Tk2.76 lakh crore in December.  

The managing director at a Sharia-based bank mentioned that over six lakh new accounts were opened in the last six months, with customers depositing more money than withdrawing.  

He is optimistic that deposit growth will continue to rise in the coming months as a significant amount of money returns to the bank.