Depositors to Receive Four Percent Profit Across Five Banks

In a significant policy reversal, Bangladesh Bank has decided to grant depositors of five banks undergoing consolidation a 4 percent annual profit for the years 2024 and 2025. The decision comes after widespread dissatisfaction among account holders over the central bank’s earlier move to withhold profit payments for the two-year period.

On Wednesday, the central bank formally communicated the revised directive to the management of the affected banks. Initially, as part of the consolidation process, Bangladesh Bank had suspended the profit payments on specified term deposits, citing regulatory requirements related to the structural integration of these institutions.

However, strong protests from depositors prompted the regulator to reconsider. A circular issued by the Bank Regulation Department clarified that the previous suspension of profit payments—initially applied to certain fixed-term deposits in line with the Islamic Banking Company Formation and Expansion Regulations—has been overturned. The decision aims both to address depositors’ grievances and to maintain the smooth functioning of banking operations during the consolidation process.

Under the new framework, all eligible personal (non-institutional) deposits will accrue profit at an annual rate of 4 percent for the period from 1 January 2024 to 28 December 2025. Banks are instructed to recalculate deposit balances based on this revised rate as of the last working day of 2025 and submit the updated statements to Bangladesh Bank within three working days.

The central bank also noted provisions for prior overpayments. Depositors who have already received profit exceeding the newly fixed rate will see the surplus adjusted against future profit payments. Conversely, deposits not covered under the new directive will continue to follow the previous regulations.

The decision has been widely welcomed by depositors, reflecting a balance between regulatory prudence and customer protection. Analysts note that such measures can help stabilise depositor confidence during periods of banking sector restructuring.

Summary of Bangladesh Bank Directive

This policy shift underscores Bangladesh Bank’s responsiveness to depositor concerns while ensuring regulatory compliance during an ongoing consolidation process, signalling a stabilising step in the country’s financial sector.