Deposits at non-bank financial institutions (NBFIs) have increased slightly thanks to flexible interest rates but the number of deposit accounts have dropped sharply, indicating a lack of trust. 

The deposits at the NBFIs stood at Tk 44,304 crore in the first quarter of this year, up from Tk 43,698 crore in the same quarter of last year, as per the latest data from Bangladesh Bank.

This means the deposit growth was around 1.38 percent.

Industry insiders said the deposits have increased as reputed NBFIs are being able to draw customers for an interest rate hike.

Both banks and NBFIs are offering high interest rates on their deposit products after the withdrawal of an interest rate cap in June last year.

On the other hand, the number of deposit accounts stood at 4,27,341 during the January-March period of this year, down from 4,86,554 in the same period of last year, the BB data showed.

This means that the number of deposit accounts has dropped by 59,213 or 12.16 percent.

Some depositors are withdrawing their funds from the NBFIs, centring some media reports over the sector's loan irregularities and scams, that is why the number of deposit accounts are decreasing, said industry people.

Md Golam Sarwar Bhuiyan, managing director of the Industrial and Infrastructure Development Finance Company, recently told The Daily Star that the number of deposit accounts has fallen because depositors are withdrawing entire funds to meet their needs for essential foods amid high inflation.

Inflation has stayed at over 9 percent since March last year.

Till March this year, loans and advances in the sector stood at Tk 74, 529 crore, up from Tk 71,239 crore a year ago, as per central bank data.

In Bangladesh, there are 35 NBFIs, including three state-run institutions. Collectively, they have 308 branches.