Bank Deposits Rise by Tk 73,790 Crore in Q2 Despite Sectoral Instability
Bangladesh’s banking sector, despite facing ongoing instability due to irregularities, corruption, and mismanagement, witnessed a significant rise in deposits during the second quarter (April–June) of this year. According to the latest data released by Bangladesh Bank, deposits in the banking system increased by Tk 73,790 crore, or 3.8 percent, in just three months.
At the end of March 2025, the total deposit volume stood at Tk 19,23,504 crore. By June 2025, this amount had reached Tk 19,96,583 crore, marking a noteworthy increase amid continued concerns over the sector’s governance.
Rural Deposits Outpace Urban Growth
Bangladesh Bank data shows that the growth of deposits in rural areas outpaced urban areas during this period. Rural deposits grew by 4.87 percent, compared to 3.6 percent in urban areas.
At the end of June, urban deposits accounted for Tk 16,80,558 crore, while rural deposits stood at Tk 3,16,024 crore. In March, rural deposits accounted for 15.84% of the total, rising slightly by the end of the quarter.
Analysts credit this growth in rural deposits to the increased use of digital banking services, expansion of banking infrastructure, and the impact of government incentive schemes and savings certificates.
Interest Rate Hike Drives Depositor Confidence
The rise in deposit rates appears to have played a central role in attracting more savers. The average interest rate on bank deposits rose from 6.24% in March to 6.31% in June. Though the increase is modest, bankers believe it has made banks more attractive to depositors seeking returns amid inflationary pressures.
“Although confidence in the banking sector is still shaky, higher interest rates have encouraged people to deposit more,” said a senior banker. “Many now see banks as a better option than holding idle cash.”
However, deposit growth has primarily benefited well-performing and reputable banks, as depositors continue to avoid institutions with questionable governance records. Weak banks are still struggling to attract new deposits, industry insiders say.
Loan Disbursement Also Increases
Alongside the rise in deposits, the loan portfolio of the banking sector also grew. At the end of March 2025, the total outstanding loans stood at Tk 17,12,618 crore, rising to Tk 17,34,172 crore by the end of June — an increase of Tk 21,554 crore or 1.26 percent.
Urban areas continued to dominate credit distribution, receiving 92.46 percent of total loans (Tk 16,33,942 crore), while rural areas received only 7.54 percent (Tk 1,30,230 crore). Analysts attribute this to the concentration of business, trade, and industrial activities in cities, while rural credit remains focused on agriculture and microfinance, which are still limited in scale.
Experts Warn: Deposit Growth Not Enough
While the increase in deposits is a positive development, experts warn that this alone will not solve the deeper structural issues plaguing the banking sector.
“The increase in deposits, especially in rural areas, is encouraging,” said M Helal Ahmed, research fellow at Change Initiative. “But this trend, driven largely by rising interest rates, cannot be a long-term solution. Without restoring trust, recovering loans, and controlling non-performing loans, this growth will not be sustainable.”
He emphasized the need for good governance, transparency, and accountability to ensure lasting stability and growth in the banking system.
The surge in deposits in Q2 2025 reflects a temporary shift in public behavior amid rising interest rates and limited alternative investment options. However, with the sector still marred by irregularities and high levels of non-performing loans, the sustainability of this growth remains uncertain. To build long-term confidence and stability, structural reforms, better governance, and a crackdown on corruption remain imperative.
