The volume of uninvested cash in the country's banking system keeps rising in recent months, signalling a slow rebound in their liquidity situations against the backdrop of a sluggish investment regime.
Officials and money market experts said the inflow of deposits in the banking channel continues to increase after a downward trend, but the existing investment avenues keep shrinking because of the economic sluggishness.
As a result, the volume of cash that remains in the bank vaults has been increasing, according to them.
Commercial banks normally keep a portion of liquidity in their vaults to meet the depositors' day-to-day financing needs, which is called uninvested cash.
The banking industry saw a massive fall in the stock of such money after the July-August mass uprising that toppled Sheikh Hasina's governing regime.
After the changeover in state power, massive loan-related irregularities in several commercial banks, mostly unconventional ones, came into spotlight, triggering panic withdrawal of deposits from such banks.
As a result, the volume of uninvested cash in their bank vaults came under 'extreme pressure'.
According to data with the Bangladesh Bank (BB), the volume of uninvested excess cash in the banking system stood at Tk 193.29 billion at the end of June 2024.
The figure rose to Tk 269 billion, Tk 268 billion and Tk 319 billion in January, March and June in 2025 respectively, according to the data.
Executive director (grade-1) of the banking regulator Dr. Md Ezazul Islam said the banking sector sees a significant growth in deposits in recent times, but they cannot invest the same because of the lower credit demand from the private sector.
On the other hand, the central bank, as part of its forex (foreign exchange) market intervention strategy, injected a good amount of liquidity to the banks in the form of buying foreign currencies in recent times, he mentioned.
"These factors basically help improve liquidity situations in the majority of the banks. That's why, the volume of such uninvested cash is rising," Dr. Islam, who leads the monetary policy department of the banking regulator, said.
The banking regulator has, so far, purchased $2126 million from the banks since July 13 last and injected around Tk 259 billion in exchange to the market to keep the exchange rate stable, according to the BB sources.
Talking to the FE, Managing Director and CEO of NRBC Bank Dr. Md. Touhidul Alam Khan said after Eid and 'puja' festivals, a portion of liquid funds has been re-deposited with banks, reflecting increased financial activity.
He said funds are predominantly being routed through formal banking channels, leading to a decline in the use of Hundi channels and promoting transparency.
Besides, the reduction in illicit money smuggling has contributed to greater inflows of legal funds back into the banking system.
Additionally, the decreased interest rates on savings certificates and treasury bonds have encouraged many investors to liquidate these instruments and deposit funds with banks, thus boosting liquidity, according to the experienced banker.
According to the BB data, the volume of currency outside banks dropped to Tk 2.76 trillion in August from Tk 2.96 trillion in June, 2025.
The data showed that the deposit growth in the banking system rose to 10.01 per cent in August, 2025 compared to 7.77 per cent in June. The private sector credit growth plummeted to 6.35 per cent in August from 9.86 per cent a year ago.
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