Written by The Banking Post
Commercial banks are shifting away from aggressive deposit mobilisation as sluggish economic activity and reduced investment opportunities dampen the need for fresh funds. Instead, many are leaning more heavily on Bangladesh Bank’s (BB) short-term liquidity facilities to meet operational requirements.
Senior bankers say high-cost deposits are no longer attractive in a market where private sector credit demand is weakening. BB data show deposit growth slowed to 7.77% in June 2025, down from 9.25% a year earlier, despite lending and deposit rates rising under the central bank’s tight monetary policy.
Liquidity via BB Facilities
Banks borrowed Tk 1.80 trillion from BB in April, with borrowing surging to over Tk 2.25 trillion by June. “Instead of taking on costly deposits, banks are increasingly relying on the repo and special liquidity facilities,” said a treasury head of a private bank.
Focus on Low-Cost Funds
Mutual Trust Bank PLC Managing Director & CEO Syed Mahbubur Rahman said MTB is prioritising low-cost deposits and transaction accounts over growth at any cost. “If we can’t invest the funds, it makes no sense to carry expensive liabilities,” he noted.
NRBC Bank Managing Director & CEO Dr Md Touhidul Alam Khan said his bank is directing branches nationwide to focus on CASA accounts, which carry little or no interest cost. “We’re being calculated in deposit growth, given the limited investment outlook,” he said. NRBC Bank recently crossed Tk 200 billion in deposits, the highest among fourth-generation banks.
BB data also show private sector credit growth slowed sharply to 6.49% in June 2025 from 9.84% a year earlier, underscoring the challenges banks face in deploying excess liquidity profitably.
