Islamic banks’ deposit share continues to shrink

The share of deposits at Islamic banks declined in the January-March quarter of 2025, continuing a recent downward trend.

The banks held just over Tk 376,163 crore in deposits during the three-month period, accounting for 19.56 percent of total deposits, down from 20.14 percent in the October-December quarter and 20.91 percent in July-September, according to Bangladesh Bank data.

Meanwhile, the total deposit liabilities of scheduled banks rose by 2.11 percent during the quarter to around Tk 1,923,504 crore at the end of March.

Of total deposits, state-owned commercial banks accounted for 23.70 percent, specialised banks 2.84 percent, foreign banks 4.55 percent, and private commercial banks, including Islamic banks, 68.90 percent.

Although deposits increased in the January-March period, the growth was slower than the 3.20 percent or Tk 58,372.22 crore rise recorded in the preceding quarter.

However, it was stronger than the 0.75 percent growth seen in the same quarter of 2024.

The increase in deposits was supported by growth in both urban and rural areas.

Urban deposits rose by 1.94 percent to about Tk 1,622,157 crore while rural deposits went up by 3.05 percent to Tk 301,347.43 crore.

Urban deposits made up 84.33 percent of the total at the end of March 2025, slightly down from 84.48 percent in the previous quarter and 84.62 percent a year earlier.

On a year-on-year basis, total deposits rose by Tk 161,201 crore or 9.15 percent in March 2025, compared to a growth of Tk 149,240 crore or 9.25 percent in March 2024.

The quarterly rise in deposits was mainly driven by a Tk 25,277 crore or 1.94 percent increase in deposits at private banks.

Deposits at state-owned banks rose by Tk 12,067 crore or 2.72 percent, specialised banks by Tk 2,359 crore or 4.51 percent, and foreign banks by Tk 89 crore or 0.10 percent.

Year-on-year, private banks saw the largest growth in deposits, with a rise of Tk 121,267 crore or 10.07 percent, followed by state banks, specialised banks, and foreign banks.