Deposits in crore-taka accounts decline by Tk5,782cr in 3 months

Deposits in bank accounts holding Tk1 crore or more witnessed a decline of Tk5,782 crore in the September quarter of the current year, as reported by the Bangladesh Bank.

In the July-September period, the bank deposits for such accounts stood at Tk7.25 lakh crore, down from Tk7.31 lakh crore in the June quarter.

Bankers attribute the decline in the deposits of crore taka accounts to soaring inflation, noting that many exporting companies are scaling back production amid reduced orders from foreign buyers. Additionally, import costs are on the rise due to the dollar crisis, further contributing to the decrease in deposit funds for traders.

They added the central bank report lacks specific information about individuals with crore taka accounts. The majority of accounts falling into this category are associated with institutions, they say.

A senior official at Meghna Bank told The Business Standard that the majority of crore taka accounts are institutional accounts, primarily belonging to government institutions. The decrease in deposits for these institutions is attributed to the government's reduction in deficit spending, opting for fewer new bank loans.

According to the central bank report, the count of crore taka account holders reached 113,586 at the close of September 2023. The figure was 106,520 in the corresponding period of the previous year.

The report indicates a rise of only 32 such account holders in the September quarter of this year compared to the previous quarter, a notable decrease from the 3,362 new account holders observed in the preceding June quarter.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, pointed out, "Inflation is nearly double the interest that customers receive on their deposits from the bank. The profits earned by customers are being outpaced by rising household expenses, leading to a decline in savings."

He also said, "If you invest in property, you get more profit than if you keep money in the bank. Because of this, deposits are decreasing."

The country's point to point inflation is 9.49% in November this year, although the average deposit rate in banks is 4.5% in the same month.

In the September quarter of this year, banks have increased their deposits by about Tk26,000 crore. But in the previous June quarter, the deposits of the banks increased by Tk74,000 crore.

At present, the total number of account holders in banks in the country is 14.97 lakh. The amount of deposits in these accounts is Tk17.13 lakh crore.

Officials at the public and private banks in the country say only 5%-7% of crore taka accounts are held by individuals. The majority of these accounts are associated with public-private and foreign sector institutions, encompassing corporate organisations, as well as voluntary and social organisations.