Bank deposits declined by Tk 100 billion in August as many customers withdrew funds and stopped further deposits due to concerns over the stability of banks after the government collapse.
As of the end of August, the deposit balance of 61 banks was Tk17.31 trillion, down from Tk17.42 trillion in July, according to the latest data from Bangladesh Bank.
This was a decrease of Tk 109.07 billion or 0.63% in just one month.
In contrast, deposits increased by Tk 232.54 billion during July-August during the same period in 2023.
The decline in deposits indicates that the amount of cash outside the banking system is increasing. By the end of July, cash outside banks reached Tk 2.9 trillion, which increased by Tk 19.97 billion to Tk 2.92 trillion in August.
A senior Bangladesh Bank official told bdnews24.com that banks operating on Islamic principles, especially those affiliated with the Chattogram-based S. Alam Group, are facing a liquidity crisis due to withdrawal of funds. he said.
After the fall of Sheikh Hasina’s government, rumors about these banks spread and customers started withdrawing their funds instead of depositing them. This trend is having a negative impact on overall deposit collections across the sector.
“Bank deposits were affected after the government collapsed in August,” Bangladesh Bank spokesperson Husne Ala Shika said. Many customers withdrew their funds, fearing that the Islamic bank would close. However, confidence in Islamic banks is gradually returning and deposits are starting to increase. ”
Zahid Hossain, former chief economist at the World Bank’s Dhaka office, said: “There has been a long-standing mistrust of Islamic banks, and the collapse of the regime has heightened concerns about the safety of deposits. This has led to an increase in withdrawals.” Ta.
Zahid Hossain, former chief economist at the World Bank’s Dhaka office, said: “There has been a long-standing mistrust of Islamic banks.Political turmoil has led to public anxiety about the availability of funds in these banks, and customer has started withdrawing funds.”
He also said that previous mismanagement and fraud had seriously harmed these banks, as the groups that previously controlled them took out loans without repaying them, further deteriorating their financial situation. He pointed out.
