The amount of deposits in the country鈥檚 banks increased by about Tk聽14,208 crore in October, reflecting a gradual recovery of depositor confidence.
Bangladesh Bank data revealed that total deposits, excluding interbank and government deposits, rose to Tk聽17,55,217 crore in October, up from Tk聽17,41,009 crore in September.
This was a significant improvement from Tk聽17,31,260 crore in August and Tk聽17,34,026 crore in July.
Bankers attributed the recovery to depositors transferring funds from crisis-hit banks to more stable ones.
They also said that monthly interest payments added to principal amounts contributed to a steady rise in deposit balances.
The government and the Bangladesh Bank repeatedly assured depositors that their money is safe in banks and no bank would collapse, which have played a critical role in restoring confidence, bankers said.
Therefore, currency held outside banks declined, dropping to Tk聽2.77 lakh crore in October, compared with that of Tk聽2.83 lakh crore in September and Tk聽2.92 lakh crore in August.
Bankers said that the central bank鈥檚 liquidity guarantee system, introduced to enable stronger banks to support struggling ones without incurring risks, was a key factor in stabilising the sector.
Under this system, stronger banks have provided significant liquidity support, with four weaker banks receiving Tk聽945 crore on October 2.
By November 11, nine struggling banks collectively received Tk聽6,585 crore in the form of interbank assistances.
In addition, the central bank directly provided Tk聽22,500 crore to six banks by the end of November.
Additionally, banks have increased interest rates on deposits, making them more attractive to savers, bankers said.
In October, Tk聽15.6 lakh crore of deposits were in time deposits, while Tk聽1.94 lakh crore were in demand deposits.
The banking sector had previously faced a severe confidence crisis due to widespread irregularities and rising non-performing loans during the Awami League regime which was ousted on August 5 through a student-led mass uprising.
High inflation, political uncertainty and macroeconomic instability, had also triggered significant withdrawals, reduced deposit inflows, and shrunk the overall deposit base.
Fixed-income and low-income households, in particular, struggled with rising commodity prices, leading to higher withdrawals than deposits.
According to the Bangladesh Bureau of Statistics, the inflation rate reached 11.38 per cent in November, with overall inflation exceeding 9 per cent for 20 consecutive months, primarily driven by escalating commodity prices.
Despite these challenges, loan disbursements continued to grow, increasing to Tk聽21.34 lakh crore in October from Tk聽21.1 lakh crore in September.
However, the interbank currency rate surged to Tk 120, compared with that of Tk聽84.8 in August 2021, underscoring ongoing macroeconomic pressures.
The current trends suggest that while depositor confidence is improving, challenges such as inflation, economic instability, and political uncertainty continue to influence the banking sector, bankers said.