In the third quarter of this year (July–September), the number of multi-million taka bank accounts decreased by 1,657, while deposits worth 26,187 crore taka were withdrawn from these accounts. This data has been revealed in the Bangladesh Bank’s updated report as of September 2024.

Causes of Decline in Deposits

Experts noted that the July–September period witnessed economic uncertainty. The weaknesses of several banks under the previous government, though hidden for a long time, were exposed under the new administration, leading to public panic. Customers, fearing instability, began withdrawing funds. Additionally, statements from the central bank suggesting some banks were on the brink of bankruptcy further fueled these withdrawals. However, deposits in reliable banks have seen some recovery.

According to Bangladesh Bank data, as of September 2024, there are 117,127 bank accounts holding deposits exceeding one crore taka, with total deposits of 746,867 crore taka. Comparatively, during the second quarter (April–June) of 2024, there were 118,784 such accounts with deposits amounting to 773,054 crore taka.

This signifies a drop of 1,657 accounts and a decrease in total deposits by 26,187 crore taka over three months. This level of withdrawal is unprecedented for accounts of this scale.

Perspectives from the Central Bank

Bangladesh Bank Executive Director and spokesperson Husne Ara Shikha explained that these accounts belong to both individuals and institutions. While there have been decreases in the past, the sharp decline this time may be attributed to customer panic.

It is essential to note that having a multi-million taka account does not necessarily mean an individual is a millionaire. Many organizations also hold such accounts. Additionally, there is no restriction on the number of accounts an individual or institution can maintain, meaning a single entity may have multiple accounts, including those held by government institutions.

While accurate statistics on millionaires in Bangladesh are unavailable, the growth in multi-million taka accounts provides an estimate. These accounts have surged since the COVID-19 pandemic. For example, in 1975, there were only 47 such accounts, which rose to 57,516 by 2015. By March 2020, at the start of the pandemic, the number reached 82,625, eventually climbing to 117,127 as of now.

Overall Decline in Bank Deposits

During the July–September quarter, total bank deposits across the sector also dropped. By September, total deposits stood at 18,25,339 crore taka, down from 18,38,837 crore taka in June—a reduction of 13,498 crore taka. State-owned and Islamic banks saw the highest decline, while foreign and specialized banks experienced slight growth.

State-owned bank deposits dropped by 2.59%, and Islamic banks by 2.79%, during the quarter. In contrast, foreign banks recorded a 2.41% increase, while specialized banks saw a modest 0.43% growth.

Reasons for the Decline in Islamic Banks

Bankers noted that several Islamic banks were controlled by the S Alam Group, which withdrew billions under various names. Despite their deteriorating condition, the previous government continued to support these banks by printing money. The new central bank governor stopped such practices, exposing the banks' vulnerabilities. Consequently, panic-stricken customers withdrew deposits, leading to a significant decline in Islamic banks’ deposits.

Expert Opinion

Former director of the Bangladesh Institute of Bank Management (BIBM), Toufic Ahmed Chowdhury, stated that customers withdrew funds from banks declared bankrupt by the central bank. However, these funds are gradually finding their way into more stable banks. He added, “Nobody keeps such large amounts of money at home, so the funds are likely being redeposited into trustworthy banks.”