Special Correspondent :
The country’s banking sector is poised to face further liquidity crisis as banks are facing steady fall in deposits aggravated by people’s eroding confidence in banks.
Insiders said loan irregularities and low returns on fixed deposits are taking people away from putting money in the banks and this is negatively affecting the deposit growth.
Data from the Bangladesh Bank website shows aggregate deposits in the banking system grew a mere 6.6 per cent during July-April period of the outgoing fiscal 2017-18, the lowest in nine years from the fiscal 2009-10 when the deposits in the banking system grew by 21.65 per cent.
The country’s banking sector received Tk 9.31 lakh crore deposits during the first ten months (July-April) of the fiscal year 2017-18.
“The main reason for the falling deposit growth is high returns on savings schemes. The situation has driven people to invest their money in the national saving certificates instead of banks leading to fall in deposit growth,” Syed Mahbubur Rahman, Chairman of Association of Bankers Bangladesh told The New Nation on Saturday.
He, however, said that declining deposit growth would not aggravate the liquidity situation in banks.
“Deposit in banks fell due to the ongoing banking crisis,” a senior banker told The New Nation wishing not to be named.
He said the slowing deposit growth could also further deepen the ongoing liquidity crisis in banks and affect the lending growth. This could have a negative impact on economy.
“Bank deposit growth fell to the lowest rate since fiscal 2009-10 due to the ongoing crisis in the banking sector and high interest rates on the saving instruments,” former Bangladesh Bank Governor Dr Salehuddin Ahmed told The New Nation yesterday.
He said, this could add to the liquidity pressure since the banks are already experiencing liquidity crisis as a result of soaring non-performing loans and large loan scams.
Deposit in the banking system grew by 21.74 per cent in the fiscal 2010-11 and by 18.91 per cent in the fiscal 2011-12.
In the fiscal 2012-13, deposit growth in banks was recorded at 16.83 per cent.
However, it declined to 16.36 per cent in the fiscal 2013-14 and further fell to 12.27 per cent in the fiscal 2014-15 while t stood at 13.52 per cent in fiscal 2015-16.
Deposit growth in the banking system plunged to 10.60 per cent in the fiscal 2016-17, according to Bangladesh Bank.
