Bangladesh's banks are not short of money. They are short of borrowers they are willing to lend to — and businesses are short of confidence to borrow. According to a General Economics Division report of the Planning Commission, banking-sector deposits stood at Tk21,31,100 crore in August 2026, up 11.96 per cent year on year from Tk19,05,270 crore in August 2025.

Private-sector credit, by contrast, grew by only 4.75 per cent to Tk18,30,061 crore in August. Public-sector credit, meanwhile, rose 32.45 per cent to Tk7,22,461 crore. The gap between deposit growth and private credit growth points to ample liquidity that is not being channelled into productive private investment — and heavy public borrowing may be crowding out private lending.

Why credit is not following deposits

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Three forces are at work. First, borrowing costs remain high, with the policy rate held at 9.5 per cent for October–December. Second, business confidence has recovered only slowly, amid energy costs, political uncertainty and weak demand. Third, credit risk remains elevated: the banking sector's non-performing loan ratio reached 32.78 per cent in June, according to central bank data reported in the monetary policy coverage. Banks with weak balance sheets lend cautiously, whatever the policy rate.

  • Deposits (Aug 2026): Tk21,31,100 crore, up 11.96 per cent year on year.
  • Private credit (Aug 2026): Tk18,30,061 crore, up only 4.75 per cent.
  • Public credit (Aug 2026): Tk7,22,461 crore, up 32.45 per cent.
Liquidity is not lending. Money in a bank vault helps no factory, no housing project and no small business until a bank is willing — and able — to lend it.

What would close the gap

The report's implication is clear: easing financing costs alone will not be enough. Bank clean-up, fiscal discipline, energy supply and a clearer investment climate matter as much as the next rate decision. Until private credit recovers, growth will remain constrained — and households and developers should plan on the assumption that bank finance stays selective, not abundant, for some time yet.

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