Kazi Zahidul Hasan :
Household deposits growth at banks plunged in the immediate past fiscal amid falling interest rates, officials said.
They said, depositors have withdrawn a large amount of their deposit during the period following rate cut by banks and invested it to the government’s savings certificates leading to a fall in deposit growth.
According to Bangladesh Bank (BB), deposit growth by household depositors at banks came down to 12.60 per cent in the fiscal 2014-15 compared with 15.81 per cent in the fiscal 2013-14, showing a 3.21 per cent year-on-year fall.
Households’ deposits at banks stood at Tk 7,52,548 crore in the fiscal 2014-15 which was Tk 7,27,769 crore in the previous fiscal.
The commercial banks collected term deposits from the household depositors with 6.80 per cent average interest rate in June this year. It was 7.79 per cent in the same month of the previous year.
The average interest rates for fixed deposit stood at 8.54 per cent at the end of June 2013.
“An outflow of deposits from banks was evident last fiscal due to falling interest rates,” a senior BB official told The New Nation on Sunday. He added that fall in fixed deposit rates forced the depositors to withdraw their money from banks and invest it to other saving tools that provide higher returns.
The average interest rates of saving instruments were 13 per cent in the last fiscal. “Sale of savings certificate spiked abnormally in the last fiscal due to high interest rates. The government later cut the interest rate of savings tools by 1-2 per cent considering its debt burden,” he said.
Before the cut, the interests on five-year family savings certificates was 13.45 per cent, pensioners certificate 13.19 per cent, Bangladesh Savings Certificate 13.19 per cent, three-year savings certificates with tri-monthly returns 12.59 per cent, postal savings and bank certificates’ 13.24 per cent.
When asked, the BB official said that most banks have cut their rates as they were maintaining a higher liquidity following poor investment demands from the private sector’s investors.
Available BB data shows that the total liquid assets of the scheduled banks stood at Tk 2,30,719.43 crore as of May 2015 which was Tk 2,16,216.64 crore at the end of June 2014.
Sale of National Savings Certificates (NSD) during July-May,2014-15 stood at Tk39,068.62 crore which was 80.40percent higher than the amount of sale in the same period of the preceding fiscal
Net borrowing of the government through NSD certificates during July- May, 2014-15 was substantially higher and stood at Tk 26,562.46 crore against Tk 10,018.24 crore during July-May, 2013-14.
