Bank deposits in Bangladesh grew by 9.98% year-on-year in September 2025, representing the second-highest growth rate in the past 18 months, according to recent data. This follows a 10.02% increase in August, which had been the highest growth recorded in 17 months. The strong performance in September suggests a steady recovery in the banking sector, building on the positive momentum from the previous month and signalling a return of confidence after months of stagnation.
Before August, deposit growth had remained below 9% for 13 consecutive months. The last time it exceeded this threshold was in June 2024, when the growth rate reached 9.25%, as per the latest report released by the central bank. Experts have termed the September results “encouraging,” noting that while the growth rate was slightly lower than August’s, the overall trend reflects a recovery compared to the past 16 months.
Factors Driving the Growth
The increase in deposits can be attributed to three main factors: a shift towards well-governed banks, relatively high interest rates compared to inflation, and a decline in treasury bill and bond yields. According to industry experts, depositors are increasingly favouring stronger, well-managed banks that they believe offer greater stability.
Following the change in government last year, many customers moved their funds from weaker institutions to those with stronger governance. This shift has been particularly noticeable in top-tier banks, which have seen the most significant growth.
At present, most banks offer deposit rates between 8.5% and 9.5%, higher than the 8.36% inflation rate recorded in September. The report highlights that during September, deposit interest rates were 25 to 50 basis points above the average, making banks an attractive option for individuals looking for a safe investment with relatively high returns.
In addition, the decline in treasury bill and bond yields throughout September has prompted many investors, both individual and institutional, to redirect their funds from government securities into bank deposits.
Mashrur Arefin, managing director of City Bank, stated, “Deposits are increasing in well-managed banks because these institutions operate under proper guidance and regulation, which boosts public confidence. After the government change, many people withdrew money from weaker banks but are now returning to those that follow international compliance standards.”
“The yield on treasury bills and bonds is falling, while deposit rates at banks remain attractive, ranging from 9.5% to 10%. With the economy expanding, money is naturally flowing into banks. This is what we call economic momentum,” he added.
Year-End Campaigns Boost Deposits
Arefin also pointed out that year-end deposit campaigns by banks play a significant role in increasing deposits. “Toward the end of the year, most banks launch deposit campaigns to meet their annual targets,” he said. “Interest rates on deposits in Bangladesh are still very attractive compared to other countries, where rates are as low as 1% to 2%.”
Md Ahsan-uz Zaman, managing director of Midland Bank, echoed similar sentiments, emphasising that confidence in the banking sector has grown due to improvements in governance, which is reflected in the rising deposit figures.
Strong Recovery at Key Banks
Several major banks, including Islami Bank Bangladesh Ltd (IBBL), IFIC Bank, and United Commercial Bank (UCB), have reported strong deposit growth in recent months, signalling a recovery in customer confidence after a period of instability.
In the aftermath of the change in government, Bangladesh Bank dissolved the boards of several banks, including IBBL, IFIC, and UCB, triggering fears of instability among depositors. As a result, many customers withdrew their funds, creating pressure on liquidity. Despite these challenges, these banks did not face significant difficulties in repaying depositors, and now, after a year of weak growth, their deposit levels are on the rise.
IBBL, the country’s largest private bank, has seen a 14.7% growth in deposits over the past year, reaching Tk179,579 crore by the end of September 2025, up from Tk156,564 crore in September 2024. This increase is attributed to a return of public trust following the resolution of governance concerns.
IFIC Bank, which also faced significant unrest following the political transition, has seen a Tk5,714 crore, or 12.6%, increase in deposits over the past year. As of September 2025, its deposits stood at Tk51,127 crore, up from Tk45,412 crore in the same month of the previous year. Syed Mansur Mustafa, managing director of IFIC Bank, said, “Our deposit base is expanding. No matter how large the withdrawal request, customers always received their money immediately, which strengthened confidence in our bank. As a result, deposits have grown, and our liquidity position is now much stronger.”
UCB, which also faced significant withdrawals after the government change, has experienced a recovery, with deposits rising by over Tk11,000 crore in the past year. Deposits at UCB increased from Tk54,439 crore in September 2024 to Tk65,524 crore by September 2025.
Decline in Currency Outside the Banking System
Bangladesh Bank data shows that the amount of currency held outside the banking system declined by Tk8,829 crore year-on-year. As of September 2025, currency outside banks stood at Tk2.74 lakh crore, compared to Tk2.83 lakh crore in September 2024.
However, it remains unclear whether this reduction in currency outside banks represents a shift of funds back into the formal banking system, as the central bank has not provided a breakdown of the data. It is also possible that the money has been channelled into other sectors of the economy.
Overall Deposit Trends
According to Bangladesh Bank data, total deposits in the banking sector reached Tk19.14 lakh crore by the end of September 2025, compared to Tk17.41 lakh crore in the same month last year. The increase in deposits, alongside the shift of funds back into well-managed banks, suggests growing public confidence in the sector, contributing to a positive outlook for the banking industry as the year progresses.