Some remittance rebound and government handouts raised deposits in Bangladesh's banking system by 4.59 per cent to Tk 16.87 trillion in June over its previous quarter ending in March 2023.
Latest official statistics of the central bank of Bangladesh, released Tuesday, portrayed the positive picture of the financial front that is turning the corner after volatility.
The number of millionaire account-holders, having deposits between Tk 10 million-plus and Tk 500 million-plus, stands at 113,554, up by 3,362 from the March 2023 quarter, the statistics show.
Loans and advances from the scheduled banks increased by 2.92 per cent to Tk 14.46 trillion during the period under review.
People in the banking industry told the FE that the main reason behind the deposit upturn in the industry is higher remittance inflows coupled with various government payments in favour of vendors and similar other groups.
The remittance inflows during June last were worth nearly US$2.2 billion.
They also said many accountholders kept their money until June-end for accruing interest.
Of the total deposits of Tk16.87 trillion by end of June, the shares of state-owned banks, specialised banks, foreign banks, private banks (including Islamic banks) and Islamic banks were 25.50 per cent, 2.7 per cent, 4.68 per cent, 67.11 per cent and 21.83 per cent respectively.
The deposits distributed by types of accounts revealed that the share of fixed deposits to total deposits declined 43.07 per cent, down by 0.58 percentage points from January-March 2023 quarter.
In total deposits, the share of private-sector deposits (82.93 per cent) was 4.86 times higher than the public-sector deposits (17.07 per cent) at the end of the quarter of April-June 2023.
Breakdown of deposits as per administrative areas reveals overconcentration in two divisions-Dhaka accounting for more than half at 61.66 per cent of the total deposits and Chattogram 20.9 per cent.
The scheduled banks' investment increased by 5.80 per cent to Tk.3.84 trillion at the end of the quarter April-June over its previous quarter.
The scheduled banks' borrowings from Bangladesh Bank at the end of the quarter under review decreased by 6.28 per cent to Tk. 1.05 trillion over its previous quarter.
The bulk of loans and advances or 33.84 per cent was used for 'trade' purposes followed by advances for 'working-capital financing' at 19.68 per cent and 'term loan at 20.32 per cent at the end of the April-June quarter 2023.
When contacted, Managing Director and Chief Executive Officer of Mutual Trust Bank (MTB) Limited Syed Mahbubur Rahman said deposit has a broader definition. "When we borrow from central bank through different instruments, they also are deposits."
He said many accountholders keep their money up to June to get interest, leading to higher deposits.
Mr Rahman says, "Loans remained comparatively poor as letters of credit and capital- machinery imports were poor during the period under review."
He thinks the advances will be slowing in the next months due to higher inflation and the next general election which may take place early January 2024.
jasimharoon@yahoo.com
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