In 2025, bank depositors in Bangladesh faced a continued decline in real returns as inflation consistently outpaced interest rates, resulting in a measurable loss of purchasing power despite sustained growth in total bank deposits across the financial system.
According to the Bangladesh Bank report “Banking Sector Update 2025”, the weighted average interest rate on deposits remained close to 6% throughout the year. During the same period, average inflation fluctuated between 8% and 9%. This persistent gap produced a negative real interest rate estimated at between 2% and 3%, indicating that savings held in bank deposits lost value in real terms.
A depositor with Tk1 lakh in a bank account would typically earn around Tk6,000 in annual interest. However, inflation reduced the real value of that money by approximately Tk9,000 over the same period, resulting in a net real loss of about Tk3,000.
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Key macro-financial indicators (2025)
| Indicator | Value |
|---|---|
| Average deposit interest rate | ~6% |
| Average inflation rate | 8%–9% |
| Estimated real interest rate | -2% to -3% |
| Interest on Tk1 lakh deposit | Tk6,000 |
| Inflation impact on Tk1 lakh | Tk9,000 |
| Approximate real loss | Tk3,000 |
Despite negative real returns for savers, banks maintained strong profitability. Lending rates remained above 12%, preserving a sizeable spread between lending and deposit rates. This margin, combined with fee-based income, allowed banks to offset costs associated with non-performing loans and operational expenses.
Ezazul Islam, Director General of the Bangladesh Institute of Bank Management (BIBM), stated that while aggregate real returns on deposits were negative, certain fixed deposits of one year or longer still offered marginally positive real returns. However, he warned that potential currency depreciation could intensify inflationary pressures and further reduce real returns for savers.
He further noted that continued weakening of the taka would increase import costs and accelerate inflation, thereby deepening the erosion of depositor purchasing power and reducing the attractiveness of traditional bank savings.
Exchange rate and inflationary pressures
The taka began to depreciate gradually from March 2025, with the US dollar rising close to Tk123 after remaining stable around Tk122.30 for an extended period. Central bank projections indicate that the exchange rate could potentially reach Tk130 under current adjustment trends.
At the same time, rising global oil prices and disruptions in international shipping routes linking the Gulf and Asia have increased domestic production and transport costs. Import-dependent industries have reported significant cost escalations in raw materials and chemicals, ranging from 10% to 183%, contributing to broader inflationary pressures.
Deposit expansion despite negative returns
Even with declining real returns, total bank deposits increased by more than 11% in 2025, reaching Tk21 lakh crore from Tk18.8 lakh crore in the previous year. Growth was strongly supported by remittance inflows and continued reliance on formal banking channels.
The increase was primarily driven by small and medium-sized accounts. Deposits in accounts holding up to Tk25 lakh recorded strong growth, rising from Tk5.52 lakh crore to Tk6.52 lakh crore. Accounts with balances up to Tk2 lakh accounted for a notable share of total deposit growth, reflecting continued participation of retail savers.
In contrast, high-value accounts above Tk25 crore declined, indicating a gradual shift in deposit concentration towards smaller account holders.
The Bangladesh Bank report observed that despite negative real returns, deposit growth persisted due to factors such as financial security, accessibility, and remittance inflows, rather than return maximisation alone.
Banking sector liquidity and credit trends
Banks remained profitable due to high lending rates and sustained interest spreads. However, credit growth remained moderate at 5.6%, while the advance-deposit ratio declined to 85.8% from 89.3% a year earlier, reflecting increased liquidity buffers and tighter risk management.
Foreign banks recorded a contraction in lending activity, while some domestic banks, including Islamic and fourth-generation institutions, maintained relatively high advance-deposit ratios, indicating varying risk and liquidity strategies across the sector.