Second highest growth in bank deposits in 18 months

At the end of September 2025, deposits in the banking sector in Bangladesh grew by 9.98 percent year-on-year, the second highest growth rate in the last 18 months. This strong performance after months of stagnation is a clear indication of the restoration of public confidence in the banking sector.

Earlier, deposit growth in August 2025 was even higher at 10.02 percent, the highest rate in the last 17 months. Before this positive trend started in August, deposit growth had been below 9 percent for 13 consecutive months. The last time growth crossed 9 percent was in June 2024, when the rate was 9.25 percent.

According to Bangladesh Bank, the total deposits in the banking sector stood at Tk 19.14 trillion at the end of September 2025, compared to Tk 17.41 trillion in September 2024.

Experts have termed the September figures as ‘encouraging’. According to them, this reflects a significant recovery in the banking sector compared to the last 16 months.

They cited three main reasons behind the increase in deposits:

1. Depositors' preference for strong banks,

2. Higher interest rates relative to inflation, and

3. Declining yields on treasury bills and bonds.

Top banks have seen the highest growth, as depositors are now placing more trust in well-run banks. After the change of government, many customers have withdrawn money from weak banks and transferred it to strong banks.

Most banks are currently offering deposit interest rates of 8.5 percent to 9.5 percent, which is higher than the 8.36 percent inflation recorded in September.

The report noted that deposit interest rates in September were 25 to 50 basis points higher than average, which encouraged people to deposit funds in banks as a safe investment option.

At the same time, in September, the yield on treasury bills and bonds started to decline, prompting many individuals and institutions to shift their investments from government securities to bank deposits.

According to Bangladesh Bank, the total deposits in the banking sector stood at Tk 19.14 trillion at the end of September 2025, up from Tk 17.41 trillion at the same time last year.

After the change of government, Bangladesh Bank dissolved the boards of several banks, including IBBL, IFIC and UCB. This led to many depositors withdrawing their money in panic and creating a liquidity crisis. However, despite concerns about good governance, these banks have not had any problems in returning the money to depositors. After a year of weak growth, deposits in these banks are now increasing again.

IBBL, the country's largest private bank, has achieved a 14.7 percent growth in deposits in the last one year. The bank's deposits stood at Tk 1,79,579 crore at the end of September 2025, up from Tk 1,56,564 crore in September 2024.

On August 5, 2024, when Chittagong-based businessman S Alam lost control of the bank's board, panic spread and depositors withdrew their money.

After the political changes, the then chairman Salman F. Rahman was removed, and IFIC Bank also faced instability and internal protests. Rumors that the bank might collapse led to a storm of withdrawals.

However, in the last one year, IFIC Bank's deposits increased by Tk 5,714 crore, a growth of 12.6 percent. It increased from Tk 45,412 crore in September 2024 to Tk 51,127 crore in September 2025.

After the change of government, UCBO also faced a significant amount of withdrawals, but the bank has since recovered. The bank's deposits increased by more than Tk 11,000 crore in one year. UCB deposits in September 2024 were Tk 54,439 crore, which increased to Tk 65,524 crore in September 2025.

According to Bangladesh Bank, the amount of cash held by the public outside the banking system has decreased by Tk 8,829 crore year-on-year. At the end of September 2025, the amount of cash held outside the banks stood at Tk 2,74,000 crore, which was Tk 2,83,000 crore in September 2024.