Photo: Collected
Currency in circulation outside banks in Bangladesh increased for the fifth consecutive month in April amid low confidence in the banking sector and inflationary pressures.
According to Bangladesh Bank data, the volume of the currency outside banks reached Tk264,349 crore in April, increasing from Tk261,195 crore in March and Tk257,574 crore in February.
This marked a rise from Tk257,295 crore in January, Tk254,860 crore in December 2023, Tk248,441 crore in November 2023 and Tk245,943 crore in October 2023.
Bankers attributed the increase in withdrawals to depositor concerns about the safety of their funds amid ongoing mergers and widespread irregularities.
They said that high inflation was also responsible for the withdrawals.
The issue of bank mergers gained prominence after Bangladesh Bank Governor Abdur Rouf Talukder at a meeting with the Bangladesh Association of Banks on March 4 urged bank owners to decide on merger partners. He warned of forced mergers under the prompt corrective action framework issued on December 5, 2023.
Despite assurances from Bangladesh Bank officials that deposits would remain safe, public anxiety persisted.
Under pressure, the central bank declared on April 16 that it would not accept any more merger proposals after receiving several pleas.
Trust in the banking sector has also been eroded by loan irregularities and scandals in several banks, bankers said.
Additionally, rising living costs have led people to keep more money in hand, they said.
According to Bangladesh Bureau of Statistics data, the overall inflation rose to 9.89% in May, the highest since October 2023 when it hit 9.93%.
Inflation has remained near 10% since March 2023.
Messenger/Fameema
