In April 2024, cash held outside Bangladesh’s banks rose for the fifth consecutive month, reaching Tk 2,64,349 crore. This surge, attributed to depositor concerns about bank safety amid mergers and irregularities, also reflects high inflation. Bangladesh Bank’s governor’s call for bank mergers under the prompt corrective action framework heightened anxiety, despite assurances of deposit safety. Central bank’s decision to halt merger proposals followed public pressure. Loan scandals and rising living costs further eroded trust in the banking sector. Inflation, persisting near 10% since March 2023, has led depositors to withdraw funds to mitigate rising living costs. Increased cash outside banks hampers central bank’s efforts to manage inflation and economic stability.
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