In April, banks offered up to 12% interest on deposits, the highest in a decade. However, deposit growth slowed to 8.63%, the lowest in ten months, with total deposits standing at Tk 16.75 lakh crore, according to Bangladesh Bank data. This decline is alarming given the higher interest rates and signals a confidence crisis among depositors.
Factors contributing to this trend include persistent inflation, which remains around 10%, leading individuals to retain cash rather than deposit it. Additionally, concerns about bank stability and potential mergers have made depositors wary. Some banks are even struggling to return deposits, further eroding trust. Comparatively, deposit growth was higher in previous months, at around 10-10.5%. The situation mirrors the early 90s when interest rates soared but failed to stimulate deposit growth significantly.
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