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. Private sector credit growth fell to 7.28% in December, down from over 10% a year ago, marking a steady decline from July’s 10.13%. The trend was driven by lower loan demand and increased bank investment in government securities instead of the private sector. Imports of capital machinery dropped 27.66% in July-December 2024, reflecting reduced new investments. However, overall letter of credit openings rose to $34.89 billion, up from $33.49 billion a year earlier. With banks maintaining the required 4% CRR and 13% SLR, they opted for safer government securities. Experts predict investment may rise post-election if stability improves, but for now, banks prioritize government bonds over private sector lending.
Source for more details:
