Due to high inflation and low interest rates, people have reduced their deposits in banks, while on the other hand, the dollar value and the increase in spending in various sectors have increased the amount of loans taken from banks. Due to this, loans increased by 10 percent more than deposits in the bank sector last December.

Statistics show that deposits in the banking system increased by Tk 2,281 crore in the month of December. However, at the same time, bank loans increased by 22 thousand 930 crores. That is, in the last month of last year, December, due to the increase in loans compared to deposits in the banking sector, many banks have faced liquidity crisis. Because of this, these banks are borrowing money at high interest rates.

Bankers say that one of the reasons for the decrease in the growth of bank deposits is that the interest rate on deposits is now lower than the rate of inflation prevailing in the country. On the other hand, the banks are not able to increase the interest rate on deposits, because the maximum loan interest rate has been fixed at 9 percent by Bangladesh Bank.
As a result, some banks are borrowing money from other banks at an interest rate of more than 9 percent due to fund crunch without being able to increase deposits.

When asked about the reason for such a situation, former managing director of Agrani Bank Mohammad Shams ul Islam told Prothom Alo that many people are destroying their savings due to increase in expenses and new savings have also decreased. Due to this, loans are increasing more than deposits. But the interest is added in December, so the debt has increased so much. The central bank’s initiative to solve the money problem will play a big role in solving the crisis of the banks.

Regarding what to do, Mohammad Shams ul Islam also said, “The loan interest rate should be increased gradually without raising it completely.” If it is completely removed, some bank will make more profit by paying less interest on deposits, while others will withdraw deposits with higher interest. It will create chaos.

One of the reasons for the increase in loans from banks is also attributed to the increase in the value of the dollar against the rupee. Earlier, traders used to spend 85 rupees for every dollar, now it costs 105 rupees. As a result, traders have to spend more money than before to import goods, that is, debt has increased.

According to the data of Bangladesh Bank, last November bank deposits were 14 lakh 86 thousand 888 crores. In December, which has increased to 14 lakh 89 thousand 169 crores. As a result, deposits in the bank sector increased by Tk 2,281 crore in December. But in November, the deposits decreased by 3 thousand 155 crores. Last October, the amount of deposits in the bank sector was Tk 14 lakh 90 thousand 43 crores.

Meanwhile, last December, deposits increased by Tk 2,281 crore, but at the same time, loans given by banks increased by Tk 22,930 crore. Bank loan was Tk 14 lakh 18 thousand 266 crore in November, which increased to Tk 14 lakh 41 thousand 196 crore in December. And in October, the bank loan was Tk 14 lakh 345 crore. As a result, bank loans increased by Tk 17 thousand 921 crore in November.

Many are breaking down savings to meet expenses, say industry insiders. Due to inflation, many people are unable to save again. Many customers withdrew money from these banks after the information about the irregularities in asset management of many Islamic banks came to light. Only last December, Islami Bank Bangladesh’s deposits decreased by about 13 thousand crores. But now it is said that the bank’s deposits are increasing.

Analysts feel that central bank supervision should be strengthened to protect depositors’ money and action should be taken against bank owners and officials responsible for irregularities.