The ownership pattern in Bangladesh’s government securities (G-sec) market is shifting as individual and institutional investors increasingly dominate, moving funds away from banks. This change is driven by higher returns from treasury bills and bonds, resulting in stagnant deposit growth for banks, which currently ranges between 9% and 10.5%.
In FY’23, commercial banks invested Tk 143.39 billion in G-sec, while individual and institutional investments totaled Tk 76.85 billion. By FY’24, banks’ investments increased to Tk 261.38 billion, but individual and institutional contributions rose to Tk 372.89 billion.
As of August FY’25, institutional and individual investments reached Tk 51.48 billion compared to just Tk 6.38 billion from banks. Despite concerns over liquidity pressure from this diversion, banks have not yet felt significant impacts due to low credit demand in the current economic climate. However, risks may arise if business activity picks up again.