Banks Retain Savers' Confidence

Surging remittances, high rates, and restored trust push bank deposits past Tk21.58 lakh crore

Bangladeshi savers poured a record amount of money into banks over the past year, lifting total deposits above Tk21.58 lakh crore, as higher interest rates, improving confidence in the financial system, strong remittance inflows and a lack of attractive alternative investment options encouraged households to keep their savings in banks.

According to Bangladesh Bank (BB), total deposits in the banking sector rose by Tk2.34 lakh crore over the 12 months to March 2026, reaching Tk21.58 lakh crore from Tk19.23 lakh crore a year earlier, an annual increase of 12.19%.

The latest figures suggest that banks have regained their position as the preferred destination for savings despite a year marked by liquidity shortages, governance concerns and depositor anxiety surrounding several financial institutions.

Economists, however, cautioned that the surge in deposits will only support broader economic growth if banks can channel the additional liquidity into productive sectors through increased lending and investment.

Retail savers drive deposit growth

Individual depositors remained the backbone of Bangladesh's banking system, accounting for 56% of total deposits.

BB data showed that individual deposits climbed to Tk12.17 lakh crore in March 2026 from Tk10.62 lakh crore a year earlier, while the number of personal bank accounts increased to 17.11 crore from 15.52 crore.

Overall, private-sector entities accounted for 83% of total deposits, including individuals, businesses and industries, while government ministries, agencies and public institutions held the remaining 17%.

Bankers said retail deposits have become increasingly important because they are generally more stable than corporate deposits and are less vulnerable to sudden withdrawals during periods of financial stress.

"The banking sector had suffered from a loss of confidence following concerns surrounding several banks. The situation is now improving and deposits have started growing again," Syed Mahbubur Rahman, Managing Director and Chief Executive Officer of Mutual Trust Bank said.

Mohammad Nurul Amin, Chairman of Bangladesh Krishi Bank, said retail deposits remain the foundation of the country's banking system.

"Individual deposits are the main driving force behind the banking sector. The higher a country's savings rate, the stronger its economy becomes. Retail deposits are stable, allowing banks to provide long-term financing and investment," he said.

Higher rates, stronger confidence support recovery

Economists attributed the rebound to a combination of policy reforms, improving public confidence and favourable macroeconomic conditions.

Former World Bank Lead Economist Dr Zahid Hussain said Bangladesh Bank's recent reforms, including restructuring the boards of several troubled banks, had helped restore confidence in the sector.

"During the political transition, many individuals and businesses withdrew cash out of uncertainty. As conditions stabilised, a significant portion of those funds flowed back into the system," he said.

He also cited strong remittance inflows, the central bank's foreign exchange purchases and deposit interest rates of around 11% to 12% as key factors behind the increase in savings.

"Saving in a bank has become far more attractive than before," he added.

Small and middle-income savers dominate

Bangladesh's banking system continues to rely heavily on small and medium-sized savers.

Nearly 15.88 crore individual accounts contain balances below Tk2 lakh, although the largest share of deposits comes from approximately 1.15 crore customers holding between Tk2 lakh and Tk25 lakh. Together, they account for Tk6.73 lakh crore in savings.

Only about 40,000 bank accounts hold deposits exceeding Tk1 crore, highlighting the relatively limited concentration of wealth among individual depositors.

State-owned banks outpace private lenders

State-owned commercial banks recorded faster deposit growth than their private-sector counterparts over the past year.

According to Bangladesh Bank, deposits at state-owned commercial banks grew by 13.20%, compared with 12.51% at private commercial banks. Deposits at specialised banks increased by 13.29%.

Bankers attributed the stronger performance to depositors shifting funds toward state-owned institutions after liquidity concerns at several private banks and the government's decision to consolidate five Shariah-based banks.

Even so, private commercial banks continued to dominate the market, accounting for 69% of total deposits, while state-owned commercial banks held 24%.

"Stronger private banks have recorded significant deposit growth, while confidence in several state-owned banks has also improved," said Masrur Arefin, Chairman of the Association of Bankers, Bangladesh and Managing Director of City Bank.

Rural savings gather pace

Deposit growth was stronger in rural Bangladesh than in urban areas during the past year.

Rural deposits increased by 14.10%, outpacing the 11.84% growth recorded in urban centres, although cities still account for 84% of total deposits.

Bankers said the expansion of agent banking, mobile financial services and digital banking has significantly improved financial access in rural communities, encouraging more people to save through formal banking channels.

Limited investment alternatives

Analysts said the weak performance of competing investment avenues has also reinforced the appeal of bank deposits.

Although sales of National Savings Certificates have begun recovering, with net sales reaching Tk2,260 crore in April, the stock market remains weighed down by a prolonged downturn. High gold prices have made fresh investment costly, while the property market has yet to regain momentum. Mutual funds and the corporate bond market have also struggled to attract retail investors.

Against that backdrop, banks continue to offer what many savers value most: security, liquidity and relatively predictable returns.

While the strong growth in deposits signals renewed confidence in the financial system, economists said the next challenge for policymakers and lenders will be ensuring that the expanding pool of savings is transformed into productive credit capable of supporting investment, job creation and sustainable economic growth.