Once upon a time, depositors were more interested in private banks because of modern banking services and high interest rates. Now, a large portion of those depositors have started returning to public banks. As a result, public banks have surpassed private banks in deposit growth.
According to Bangladesh Bank data, the growth in deposits in state-owned commercial banks and specialized banks has been higher than that in private sector banks in the past one year. However, the majority of deposits in terms of taka are still held by private banks.
Industry insiders say that the plight of more than a dozen banks in the country’s private sector and the failure to return deposits from many banks have eroded the trust of depositors in private banks. Considering the assurance of getting their deposits back, many are now turning to public banks. This has had an impact on the growth of deposits in banks in this sector.
Deposits in state-owned commercial banks grew by about 13.15 percent during the same period of January-March last year. Deposits in private commercial banks grew by 12.5 percent during the same period. This information was found in the latest bank-based statistics analysis published by Bangladesh Bank.
According to Bangladesh Bank data, the total deposits in the country’s banking sector have increased to Tk 21,58,250 crore by the end of the January-March quarter of this year. In the same quarter of last year, the total deposits in the banking sector were Tk 1,923,505 crore. Accordingly, deposits in the banking sector have increased by Tk 2,34,520 crore in one year. The deposit growth rate in the entire banking sector in one year was 12.19 percent. The average interest rate on deposits in the banking sector is between 6-9 percent. However, the actual deposit growth rate is even lower.
It is also true that in recent times, depositors’ confidence in some public banks has increased more than in private banks. As a result, deposits in public banks are growing faster than those in private banks.
—Masrur Arefin, Chairman, ABB and MD, City Bank
According to Bangladesh Bank’s data on deposits, at the end of March this year, deposits in private commercial banks (including Sharia-based banks) increased by Tk 165,785 crore compared to March last year. In this case, the growth rate is 12.51 percent. At the end of March last year, the amount of deposits in private banks among the total deposits in the banking sector increased to Tk 14,91,108 crore. At the same time, deposits in state-owned commercial banks increased by Tk 60,183 crore to Tk 5,16,113 crore. Their deposits grew by 13.20 percent.
The list of state-owned commercial banks includes Sonali Bank, Agrani Bank, Janata Bank, Rupali Bank, Basic Bank and Bangladesh Development Bank. Let’s take Sonali Bank as an example. In 2024, the bank’s deposits were Tk 1,65,200 crore. At the end of last year, it increased by Tk 14,601 crore to Tk 1,79,621 crore. The bank’s deposits grew by 9 percent in one year.
Specialized banks are ahead of state-owned commercial banks in terms of deposit growth. Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RKAB) and Probashi Kalyan Bank – these three specialized banks have increased deposits by Tk 7,269 crore in March this year compared to March last year. In this case, the growth rate is 13.29 percent. At the end of last March, the amount of deposits in specialized banks increased to Tk 61,953 crore.
People involved in the banking sector say that depositors have not been getting their deposits back from several private banks for a year. Again, the government has taken the initiative to form a bank called Sammilit Islami Bank by merging five private sector Sharia-based banks. As a result, there is a crisis of interest or trust among depositors in those five banks. In this situation, they have become more interested in government commercial and specialized banks. This has had an impact on the growth of deposits in these banks. In addition, people involved in the sector said that deposits have also increased significantly in private sector banks that are in good condition. However, due to the crisis of trust of depositors in a large part of private sector banks, there has been a negative impact on the growth of deposits in this sector overall.
When asked, Masrur Arefin, Chairman of the Association of Bankers Bangladesh (ABB), an organization of top bank executives, and Managing Director (MD) of City Bank, said that the growth of deposits in private sector Sharia-based banks has dropped to zero. In addition, the growth of deposits in some conventional private banks has also decreased significantly. In contrast, deposits in leading private banks of good quality have increased significantly. Still, as deposits in a large number of private banks have decreased, the growth in deposits in this sector has decreased overall. It is also true that in recent times, depositors have increased their confidence in some public banks compared to private banks. As a result, more growth is being seen in deposits in public banks than in private banks.
According to Bangladesh Bank data, at the end of March, 69 percent of the total deposits in the banking sector were held by private banks. And about 24 percent of the total deposits in the banking sector are now in the hands of state-owned commercial banks. State-owned specialized banks hold about 3 percent of the total deposits. In addition, 4.12 percent of the total deposits are in the hands of foreign-owned banks.
While deposits in the banking sector have increased in the past one year, the growth in deposits in rural areas has been higher than in urban areas. Compared to March last year, bank deposits in rural areas increased by Tk 42,480 crore at the end of March this year, a growth rate of 14.10 percent. And in urban areas, deposits increased by Tk 1,92,410 crore during the same period, a growth rate of 11.84 percent.
At the end of March, the amount of deposits in urban areas increased to Tk 18,14,198 crore, which is 84 percent of the total deposits. The amount of deposits in rural areas was Tk 3,43,827 crore, which is about 16 percent of the total deposits in the banking sector.
