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The number of bank accounts holding deposits exceeding Tk 1 crore dropped by 1,657 as of September, equivalent Tk 27,000 cr due to withdrawal pressure particularly from Awami League connected individuals. 

According to central bank data, the number of such accounts stood at 1,17,127  during July- September, down from 1,18,784 at the end of June, when the number reached peak.

By the end of September, the total deposits in the banking sector were recorded at Tk 18.25 lakh crore, with Tk 7.46 lakh crore held in accounts with more than Tk 1 crore.

 However, it marked a decline of Tk 27,000 crore from June’s figure of Tk 7.73 lakh crore.

The number of such accounts was 1,15,890 accounts in March and 1,16,908 at the end of December 2022.

Banking insiders attribute this decline to the political turbulence following the fall of the Awami League-led government on August 5. 

Many individuals associated with the Awami League reportedly withdrew large sums, transferring money abroad amidst fears of political fallout. 

This capital flight along with intensified scrutiny from regulatory agencies worsened the situation for them.

The Bangladesh Financial Intelligence Unit (BFIU) has frozen numerous accounts linked to businesses, politicians, and activists associated with the party. 

Moreover, agencies such as the Anti-Corruption Commission and the Criminal Investigation Department have ramped up efforts to identify individuals accused of amassing wealth through illicit means.

 Some supporters of the Awami League have gone into hiding, while others have left the country to avoid legal or financial repercussions.

Mainul Islam, former professor of economics at Chittagong University, told ¶¶Òõ¾«Æ· that the current political unrest has significantly contributed to heightened withdrawals from banks. 

He explained that many influential individuals, particularly politicians, began withdrawing large sums of money following the intensification of the student-led protests in July. 

These funds, he noted, were transferred abroad, with most of these individuals fled overseas to lead a comfortable life.

He expressed grave concerns about the uncertainty surrounding the banking sector, emphasizing that recovery seems unlikely in the near future due to the absence of tangible improvements. 

Highlighting the fragile state of the sector, he pointed out that 10 to 11 banks are in particularly precarious conditions. 

The professor questioned whether the central bank possesses the capacity or strategy to salvage these troubled institutions effectively, given the severity of their crises.

Additionally, the Bangladesh Bank has restructured the boards of 11 banks due to widespread irregularities and loan scams. 

This move, while necessary, has contributed to depositor anxiety, leading to further withdrawals.

 The situation was exacerbated when the newly appointed BB governor, Ahsan H Mansur, publicly acknowledged that around 10 banks faced potential bankruptcy. His statement intensified depositors’ concerns, prompting a surge in withdrawals that many banks struggled to manage.

Out of Bangladesh’s 16.20 crore bank accounts, 11.73 crore accounts hold less than Tk 5,000, while accounts with deposits exceeding Tk 1 crore represent only 0.073 per cent of the total. 

Despite their small number, these high-value accounts account for approximately 40 per cent of the sector’s aggregate deposits, reflecting a disproportionate concentration of wealth. 

Among the high-value accounts, 1,800 accounts held deposits exceeding Tk 50 crore each, collectively amounting to more than Tk 2.51 lakh crore. 

Despite this decline, the trend of growth in high-value accounts has been consistent over recent years, increasing from 75,563 accounts in December 2018 to 1,01,976 by December 2021. 

However, the recent economic and political challenges have disrupted this growth trajectory.

Experts said that persistent inflation, political unrest, energy shortages, and high dollar rates have constrained businesses’ profitability, reducing their capacity to maintain large bank deposits. 

The Bangladesh Bureau of Statistics reported an inflation rate of 11.38 per cent in November, with overall inflation exceeding 9 per cent for 20 consecutive months, driven by escalating commodity prices. 

High inflation has also led many individuals to hold onto cash rather than keep it in banks.