Banks’ Excess Liquid Assets Rise by Tk51,696 Crore in Dec 2024

A study titled "Microfinance Competition in the Presence of Moneylenders: Theory and Evidence" found that the presence of microfinance institutions (MFIs) in rural areas significantly lowers interest rates and reduces reliance on informal moneylenders.

Bangladesh’s commercial banks saw a modest rise in dollar holdings in January 2025, reaching $4,537 million from December’s five-year low of $4,255 million. The increase was driven by a 23.61% year-on-year growth in remittance inflows, totaling $15.96 billion for July–January FY25, and an 11.58% rise in export earnings to $28.97 billion.

Banks' excess liquid assets surged by Tk51,696 crore year-on-year, reaching Tk2.15 lakh crore in December 2024 due to weak private sector investment amid political instability. Meanwhile, excess cash declined by Tk2,291 crore to Tk17,675 crore.

In the first nine months of 2024, Bangladesh's rescheduled defaulted loans rose by Tk1,922 crore, reaching Tk20,732 crore, up from Tk18,810 crore in the same period of 2023. Despite rescheduling, non-performing loans surged to Tk2.85 lakh crore, nearly 17% of total outstanding loans (Tk16.83 lakh crore) as of September 2024.

The government has reduced its bank borrowing target by 28% to Tk 990 billion for FY2024-25, down from Tk 1,375 billion, due to lower expenditures and slow ADP implementation, which stood at 18% in the first half of the fiscal year.

Bangladesh’s non-performing loans (NPLs) surged to Tk 284,977 crore by September 2024, accounting for 17% of total outstanding loans, which is 2.7 times the combined budget for education and health. State-owned banks are the worst affected, with NPLs at 40.35%.