Deposits in the country鈥檚 non-bank financial institutions (NBFIs) dropped by Tk聽525 crore in the January-March period as many customers closed their accounts due to lack of trust and confidence in the sector.
According to Bangladesh Bank data, deposits in the NBFIs fell to Tk聽44,304 crore in the quarter compared with those of Tk聽44,830 crore in the previous quarter.
The number of deposit accounts decreased to 4.27 lakh at the end of March 2024, down from 4.31 lakh at the end of December 2023 and 4.86 lakh in March 2023, indicating a continued loss of depositors.
Bankers attributed the decrease to massive loan irregularities and scams in the NBFI sector.
Rising living costs have also prompted many depositors to withdraw their funds, they said.
According to the Bangladesh Bureau of Statistics, overall inflation in the country increased to 9.8 percent in May and has hovered at 10 per cent since March 2023.
Furthermore, the recent increase in deposit rates in banks and government treasury bill rates has led some depositors to prefer these more secure investments over the NBFIs.
However, loan disbursements by NBFIs increased by Tk聽770 crore, reaching Tk聽74,529 crore in January-March, up from Tk聽73,759 crore in the previous quarter.
The loan-to-deposit ratio for NBFIs stood at 1.68 at the end of March, indicating a more aggressive lending stance compared with their deposit base.
In contrast, banks maintained a lower loan-to-deposit ratio of about 0.86.
Meanwhile, the total deposits in scheduled banks increased by 0.75 per cent, reaching Tk 17,62,303 crore in the January-March quarter compared with those in the previous quarter.
By December 2022, deposits in the NBFIs had risen to Tk聽43,752 crore, while the total loans in the sector amounted to Tk聽70,321 crore.
Experts cautioned that the significant increase in loans without a corresponding rise in deposits lead to an imbalance between available funds and loan demands, potentially causing an asset-liability mismatch for the NBFIs.
In the January-March period of 2024, the NBFIs experienced a 21-per cent rise in loan recovery, with the amount increasing to Tk聽83,978 crore from Tk聽69,378 crore in the previous quarter ending in December.
Fixed deposits in the NBFIs also dropped to Tk聽42,916 crore at the end of March, down from Tk聽43,513 crore in the previous quarter.