The volume of currency outside banks has plummeted significantly in the first four months of the current FY24 as much-needed respite to lenders.
Deposits worth over Tk46,000 crore, which flew out of the banking system because of trust deficit amid some large-scale debt anomalies, returned into bank vaults in July-October 2023, riding on higher interest rates, according to bankers.
Data available with the Bangladesh Bank revealed that the volume of currency outside banks stood at Tk246,000 crore at the end of October 2023.
The deposit outflow from banks kept rising since September 2022 following reports of gross irregularities in some commercial banks.
The amount rose to a record high of Tk292,000 crore in June 2023.
The Bangladesh Bank's new rate regime on the market-based reference rate, known as six-month moving average rate of treasure (Smart), played a part in increased bank deposits.
Such continuous rise in deposit gains amid contractionary monetary policy started luring potential depositors to banks, especially at a time when other windows for investment continue to shrink ahead of the general election.
As a result, the volume of deposit outflow from banks keeps declining with figures reaching Tk266,000 crore in July, Tk258,000 crore in August and Tk253,000 crore in September, showed the BB data.
It also disclosed that the volume of total deposits in the banking channel was Tk1,595,000 crore in June, which rose to Tk1,637,000 crore in October.
The total volume of deposit increased year on year by 9.79% in October.
According to money-market players, the uptrend in deposit rate continues to reach 9.30% in some conventional banks while the rate is much higher in unconventional banks where liquidity pressure is comparatively higher.
