Special Correspondent :
Growth of currencies outside banks shot up to 14 percent in November 2017, as more people are keeping cash outside banks for fear of safety and decreasing incentive.
Besides, a section of people are hoarding cash at home to evade official scrutiny pushing up the amount of money outside the banking sector that stood at Tk 126,883.2 crore in November 2017.
It stood at Tk 111,242 crore in the same month a year ago, according to Bangladesh Bank (BB).
“Money outside banks has increased in the recent times due to declining incentives on household accounts, high charges and people’s growing tendency to stash black money from official scrutiny,” Economist Dr Ashan H Mansur told The New Nation yesterday.
He said people may be keeping the money at home or outside the country.
“Many of them are holding big cash sensing fresh trouble in the country’s political arena. This may be another reason that pushed up the currencies outside banks,” he noted.
Dr Ashan H Mansur asked the regulators to take a look where the huge amount of cash was kept.
“Money is being kept outside banking system and it shows a sudden acceleration due to safety reason,” former finance adviser to the caretaker government Dr AB Mirza Azizul Islam told The New Nation.
He said, the prevailing low interest rates on deposits is diminishing incentive, prompting people to hoard their money at home or in non-banking financial institutions.
“People may be hoarding notes for crisis in many private banks. These banks are losing deposits rapidly for the Farmers Bank’s inability to pay back the depositors’ money” a BB official told The New Nation.
