Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The growth of overall bank deposits decelerated in February 2025, following weaker credit growth in the private sector, officials said.
The aggregate deposit growth in the country's banking system came down to 7.88 per cent in February 2025 from 8.29 per cent a month ago, according to the central bank's latest statistics.
The amount of overall deposit increased slightly by over Tk 110 billion to more than Tk 18 trillion by the end of February this calendar year from Tk 17.89 trillion a month ago. It was Tk 16.69 trillion in February 2024.
Bangladesh Bank (BB) data showed that the deposit growth fell to a low of 7.02 per cent in August 2024. However, the situation started improving from September last year and continued to gain momentum until January 2025.
The deposit growth declined in February 2025, following a consistent upward trend over the previous five consecutive months, according to BB officials.
They said slower credit growth has contributed to reduced deposit creation in the country's banking system.
The private sector credit growth keeps falling remarkably in recent months to reach 6.82 per cent in February 2025, which is believed to be the lowest in recent years.
The growth in credit to the private sector came down to 6.82 per cent in February 2025 on a year-on-year basis from 7.15 per cent a month ago.
Meanwhile, the interim government and the central bank have already taken a slew of measures to regain public confidence in the banking sector that was diminishing in the previous regime following several loan scams.
As part of the measures, the central bank has so far reconstituted the boards of 15 banks to protect depositors' interests by ensuring corporate governance, they added.
"It will take more time to fully restore public confidence in the banking system," a BB senior official told the Financial Express (FE) while replying to a query.
He, however, expected both the deposit and private sector credit growth to pick up in March, following the celebration of the Eid-ul-Fitr festival.
"Policymakers should take effective measures to bring dynamism in the country's overall economic activities and that will help enhance deposit growth," Mustafa K Mujeri, executive director at the Institute for Inclusive Finance and Development (InM), told the FE.
He said higher deposit growth will help banks to lend more for facilitating the country's overall business activities. "It will also help reduce the lending rates."
Talking to the FE, Syed Mahbubur Rahman, Managing Director (MD) and chief executive officer (CEO) of Mutual Trust Bank, said that consumer spending keeps rising amid higher inflationary pressure on the economy.
As a matter of fact, the opportunity of savings in the banking system continues shrinking, according to the senior banker. "And, it is a reflection on the deposit growth in recent months."
He also said that the tendency to keep money outside the banks is still in place, which is another factor for the downward trend in deposit growth.
However, aggregate currency outside banks (CoB) fell by Tk 27.35 billion to Tk 2.71 trillion by the end of February 2025 from Tk 2.74 trillion a month ago. It was Tk 2.57 billion in February, 2024.
Another central banker predicted that the CoB is likely to rise in March 2025 following the celebration of the Eid-ul-Fitr festival.
The overall growth of CoB came down to 5.40 per cent in February from 6.58 per cent a month before, the BB data showed.
siddique.islam@gmail.com