Bangladesh’s banking sector has shifted from a liquidity crisis to holding Tk 1.90 trillion in excess liquidity, attributed to increased depositor confidence following recent political changes, according to the Bangladesh Bank (BB). Despite this surplus, private credit growth has slowed to 9.46% year-on-year, as banks redirect excess funds into government bonds due to a contractionary monetary policy aimed at controlling inflation. Public sector banks, especially Sonali Bank, are seeing a surge in deposits, while several Sharia-based banks face challenges from loan defaults and withdrawals linked to conglomerate acquisitions like S Alam Group. Overall, the banking sector remains stable, with stronger banks supporting weaker ones, and the BB has ceased printing currency to maintain liquidity.
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