The pace of deposit growth in the banking sector has slowed further, as it stood at 9.62% at the end of October, lower than 9.98% in September, and 10% in August.
Bangladesh Bank released its latest figures on Wednesday.
According to the data, the total deposit amount in the banking sector stood at Tk1,924,000 crore in October. This figure was Tk1,755,000 crore in the same period last year.
Bankers say that deposits are increasing in well-run and stable banks, but weak banks are still suffering from the problem of lack of confidence.
Bank Asia MD Sohail RK Hussain said that many customers’ money is stuck in weak banks. This has increased deposits in good banks, but the crisis in weak banks remains as before.
According to economists, long-term economic pressure, high inflation and rising unemployment have reduced the amount of money people can save.
Former World Bank economist Zahid Hussain said that while remittances are still a major source of deposit growth, the ability of the general public to save at the end of the month has decreased.
In October, money in circulation stood at Tk270,000 crore, which is Tk736,000 crore less than last year.
However, experts say that this decrease in cash does not mean that all the money has returned to the banks.
Bangladesh Bank does not disclose information on where this money is going. Therefore, many speculate that some of this money may go to the retail business, informal market or non-bank sector.
Overall, analysts believe that the decrease in deposit growth is a reflection of economic pressure and a crisis of confidence in the banking sector.
