savings mobilization behavior of ncbs in … · factors affecting the savings behavior are...

Proceedings of the Australian Academy of Business and Social Sciences Conference 2014

(in partnership with The Journal of Developing Areas)

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SAVINGS MOBILIZATION BEHAVIOR OF NCBs IN BANGLADESH

Dr. Mohammad Ali Tareq1

Malaysia-Japan International Institute of Technology (MJIIT)

Universiti Technologi Malaysia (UTM), Malaysia

ABSTRACT

Successful savings mobilization requires conductive macroeconomic environment. Savers tend to accumulate real assets

rather than depositing their money in savings accounts in an economy where political turmoil, high inflation and uncertainty

about the future prevail. Policy makers must ensure an effective regulatory framework that provides adequate protections of

savings and provides incentives for sound management, at the same time permitting a diversity of institutional models, and

development paths as well as financial innovations. This paper is an overview on the savings mobilization behavior of the

schedule banks of Bangladesh over the period 1992-2006. This paper uses a Log-linear model and finds that the Income and

the Literacy level of the individuals the most important factor affecting the savings mobilization of Nationalized Commercial

Banks (NCBs) of Bangladesh. Besides the Transaction cost and the Return on the Substitutes investments do play an

important role in determining the level of deposits.

JEL Classifications: E20, G21, O18

Key Words: Savings Mobilization, Nationalized Commercial Banks, NCBs, Road Index, Literacy Rate,

Bangladesh

Corresponding Author’s Email Address: [email protected] ; [email protected]

I. INTRODUCTION

„What is the use of savings when it is kept under the bed or in a pot underground?’ probably this was reason

behind the introduction of savings with financial institutions. In low income communities, most people prefer to

save in undisclosed places; in the roof, pot, walls, underground or under a bed. Savings cannot be converted to

investment when it is kept under a bed. People need savings because of emergencies, opportunities (which are

often unexpected), to pay for lifecycle events associated with death or marriage, and to smooth payments of their

consumption needs. People mostly mobilize resources to develop their enterprises and well-being slowly over

time. Financial services enable them to leverage their initiatives, to accelerate the process of building incomes as

well as to provide asset and economic security. For the economy, institutionalized savings increase the amount

of national resources and decrease foreign indebtedness needed for domestic investment and consumption

demand. Countries with low internal savings rates borrow from abroad and create a debt service burden. This

underlines the importance of savings mobilization to sustain economic growth with national financial resources.

1 Senior Lecturer, Malaysia-Japan International Institute of Technology (MJIIT), Universiti Technologi Malaysia (UTM),

Malaysia, e-mail: [email protected] ; [email protected] .

mailto:[email protected]




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The overall savings performance of Bangladesh is not up to the mark compared to most of the

developing countries let alone that of the developed countries. In 1997 the gross domestic savings of Bangladesh

was only 10% of the GDP, which is much less compared to Malaysia (44%), Thailand (35%), Indonesia (31%),

Japan (30%), India (22%) and Sri Lanka (18%)2. A general intuition behind this low savings rate might be that

the low income level of the people (i.e.; lower per capita income) of Bangladesh has resulted in the lower

savings mobilization. However, it is not the only factor responsible for the low rate of savings. The poor with

only Tk. 1500 ~1999 income per month saves 14% of their monthly income, and even those with monthly

income less than Tk. 500 save 20% (Maloney and Ahmed, 1988). This higher percentage of savings of the poor

may be considered as an important factor for increasing the rate of savings in Bangladesh as most of the people

live under poverty (according to BIDS update 1996, the rural population constitutes, extreme poor (22.5%),

moderate poor (52%) and non-poor household (26.5%)). Along with the low GDP, GNP and low per capita

income the lack of attractive and appropriate savings services for different income groups has resulted in the

lower savings habits to a significant extent.

This paper is organized as follows. The methodology and sources of data is presented in section II. The

Empirical model and the description of the model is presented in Section III and in Section IV respectively. The

factors affecting the Savings Behavior are discussed in section V. Section VI is on the Government‟s policies

regarding the Savings Mobilization. The Patterns and Trends in Deposits over the years are analyzed in Section

VII. Section VIII is on the Empirical findings from the model. The conclusion follows in Section IX.

II. METHODOLOGY

This paper analyzes the behavior of savings mobilization with the banking sector over the years with a special

emphasis on the savings mobilization behavior of the Nationalized Commercial Banks (NCBs). Time-series data

were used to analyze the patterns and trends in bank deposits over the years. A Log-Linear model is formed to

measure the impact of the factors affecting Savings mobilization Behavior (1991-2005). The first step of this

log-linear analysis was to identify the factors that affect the bank deposits over the years and then through

regression the actual impact of the individual variables were found.

Sources of Data

Bank deposits, bank branches and rate of interest for 1991-2006 have been taken from the Quarterly Scheduled

Banks Statistics and Economic Trends published by the Bangladesh Bank. Gross Domestic Products (GDP) and

national income deflator (1991-2006) have been taken from the publications of Bangladesh Bureau of Statistics.

National income data have been calculated from the Economic trends. Nominal values have been deflated by the

national income deflator to transform them into real terms.

2 World Development Report 1998/99, World Bank



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lnTDUrban = Cu + 1 lnYu + 2 lnBRu + 3 lnIntu + 4 lnInflu + 5 ln SIu + 6 lnLu + 7 lnTCu

III. EMPIRICAL MODEL

In this part of the study I took the opportunity to find out the variables that affects the savings mobilization of

Bangladesh. Through this analysis I am able to find out the variable that affect the savings mobilization most.

We know,

Total Deposit = f(Income, Number of Bank Branches, Real rate of interest, Interest rate, Rates on of return on

substitute Investment Opportunities, Literacy rate, Transaction Cost)

In the above function, Total Deposit is a function of a number of explanatory variables. All these variables have

its own impact on the savings mobilization. I, by constructing this model and then through multiple regression

analysis tried to find out the impact of these variables

where, TD = Total Deposits, Y = Income, BR = Number of Bank Branches, Int = Interest Rate, Infl = Inflation,

SI = Return on Substitute Investment, L = Literacy Rate, TC = Transaction Cost

For Urban Deposits:

where, TDUrban = Urban

Total Deposits, Yu =

Urban Income, BRu = Urban Number of Bank Branches, Intu = Urban Interest Rate, Influ = Urban Inflation, SIu =

Urban Return on Substitute Investment, Lu = Urban Literacy Rate, TCu = Urban Transaction Cost

For Rural Deposits:

where, TDUrban = Urban Total Deposits, Yu = Urban Income, BRu = Urban Number of Bank Branches, Intu =

Urban Interest Rate, Influ = Urban Inflation, SIu = Urban Return on Substitute Investment, Lu = Urban Literacy

Rate, TCu= Urban Transaction Cost

IV. DESCRIPTION OF THE MODEL

Dependent Variable:

Total Deposit In the model above, Total Deposit (TD) is the dependent variable. This total deposit includes all

types of deposits except the Current and Cash Credit Account Deposit Balance. As this paper is concerned only

with the NCBs‟ savings mobilization behavior, we took their balances into consideration. We tried to find the

affects of the explanatory variables for both urban and rural areas.

Explanatory Variables:

Income (Y) The GDP was taken as the proxy for the income. For rural income we took the agricultural GDP as

the proxy. And for the urban the GDP excluding the agricultural GDP has been taken as proxy.

lnTD = C + 1 lnY + 2 lnBR + 3 lnInt + 4 lnInfl + 5 ln SI + 6 lnL + 7 lnTC

lnTDRural = Cr + 1 lnYr + 2 lnBRr + 3 lnIntr + 4 lnInflr + 5 ln SIr + 6 lnLr + 7 lnTCr



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Number of Bank Branches (BR) Expansion of bank facilities increases the amount of aggregate savings in the

economy. As volume of economic activities increases in a community the potentiality of establishing bank

branches increases, which ultimately increases the level of voluntary savings of the households.

Interest Rate (Int.) Interest rate on deposit has a profound impact on the savings mobilization. People deposit

with the banks with the expectation of getting some return. Low interest rates discourage savings. In this model

average interest rate has been taken. Interest rate for both urban and rural has been assumed to be the same.

Inflation (Infl.) Inflation rate is considered to be an influential variable in saving mobilization. It has an adverse

impact on the personal savings rate in the economy. The overall inflation rate of the economy has been

considered as the interest rate for both sectors.

Rates of return on substitute Investment opportunities (SI) Every substitute has an impact on the level of

demand and supply of a service or commodity. The substitutes of interest bearing deposits like Bangladesh

Shonchoy Patra (BSP), Pratirakha Shonchoy Patra (PSP) possess a good effect on the level of savings. When the

interest rate of such substitutes increases, ceteris paribus, people are inclined to invest in these substitutes and

thus the level of interest bearing deposits decreases. Thus a negative relation is found. Only the return on

Bangladesh Shonchoy Patra is taken into consideration in this paper.

Literacy Rate (L) There is a positive relation between the level of literacy and the level of deposits because of

increased awareness about of the benefit, security and safety aspects of institutional savings. But for Bangladesh

the literacy rate is very hard to define. So for the purpose of this model I constructed a proxy for this literacy

rate:

100.

.

.X

iareainpeopleTotal

iareainstusentsofNoX

schoolsofnoTotal

iareainschoolsofNoLi

Transaction Cost (TC) Transaction cost plays an important role in determining the net return by the depositors.

It is very difficult to estimate the exact transaction cost. So proxy variables are used by the analysts to find out its

effect on determining the level of deposits. It is often proxied by number of vehicles, roads and other

transportation, access to banking facilities etc. in this study, a road index is calculated by multiplying road

available for per thousand population (Khalily et. al., 1987)

1000XPOP

TVX

TA

RDRDV

j

j

j

j

j

where, RDVj= weighted index of roads and vehicles in jth

district, RDj= mileage of road in jth

district, TAj= total

geographic area of jth

district, TVj= total number of vehicles in jth

district, POPj= size of population in thousands

of jth

district.



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TABLE 1: THE EXPECTED SIGNS OF THE VARIABLES

Variables Expected signs

Income (Y +

Number of Bank Branches (BR) +

Interest Rate (Int.) +

Inflation (Infl.) -

Rates of return on substitute

Investment opportunities (SI) -

Literacy Rate (L) +

Transaction Cost (TC) -

V. FACTORS AFFECTING THE SAVINGS BEHAVIOR

Economist John Kenneth Galbraith (1975) noted that money is equally important to those who have it and those

who do not. People in rural and other low-income communities can save when they are guided and encouraged.

Although banks and insurance companies help people to manage their money they argue that it is impossible for

banks to make a reasonable profit by dealing in low sums of money. In many rich countries, in recent years,

banks are closing branches in and around poor communities, and in many developing countries; banks simply do

not consider mobilizing savings from the poor at all.

Different factors affect the growth in bank deposits of any country. The volume of bank deposit is

mostly determined by the interaction of the supply of and the demand for the money. The supply of deposits in

the banking system is generally determined by the components of reserve money. The demand for bank deposits

is determined by income, rate of interest, and service variables (i.e.; network of bank branches‟ or per capita

bank branches as well as the improvements in banking services). Besides, structural factors like monetization,

financial innovation, literacy rate also affect the demand for bank deposits.

Individual’s Personal Income Income is the most important factor that influence. Higher the income greater will

be the ability to acquire temporary surpluses which can be deposited with the banks as well as the need to hold

financial assets as a means of payments. It is evident that capacity of the poor to save is much higher than was

anticipated (Maloney and Ahmed, 1988). The hypothesis advanced by Duesenberry stated that the individual

savings behavior of the households not only depends on his income but also on the income of others. Later,

Milton Friedman linked savings behavior with permanent income.

Rate of Interest The sensitivity of deposits to „the rate of interest mainly depend on the portfolio preference of

the depositors. In this context, the ownership pattern of the various types of deposits have a significant leverage.

The effect of the level and structure of the interest rates is a controversial issue. Williamson (1968) found that

real rates of interest, in Japan, the Philippines and India, were inversely related to national savings. This

attributed to high interdependency between savings and investment decisions in the household sector in Asia that

consists subsistence farmers or small family business.



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Opportunity to Invest Higher rates of interest might discourage savings through discouraging investments.

However, Gupta (1970) argued that in India the rate of interest significantly and positively influenced the per

capita level of savings. Thus, higher rate of interest generated higher real savings.

Individual’s time preferences It is assumed that people have a strong preference for present consumption over

future consumption. Therefore, a person will forego present consumption only if he is paid a premium equal to

or greater than his marginal rate of time preference. Presumably, a higher rate of interest will induce an

individual to forego some of his present consumption. In other words, the higher the rate of interest, the tendency

might be towards higher savings. When the rate of interest changes, there is always a possibility of substitution

between one type of deposit and another.

Fiscal policy Fiscal policy in general not only affects the individual‟s capacity to save, but also exerts a direct

influence on his decisions to save and in what form to save. For example, the imposition of tax/surcharge on the

volume of deposits exceeding a certain amount or at a certain rate on the income earned on deposits might hinder

the growth of overall deposits in the system.

Number of bank branches The availability of banking services in a country can be measured by the total

number of bank branches. The idea is that the growth of deposits will be larger if there are more bank branches

in the country. Conveniently located bank branches can reduce transaction costs significantly and thereby

increases the net return earned on deposits. It may be mentioned here that Bangladesh undertook a vigorous and

massive program of opening bank branches in the rural areas during the late 70‟s and an active interest rate

policy in the early 80‟s.

Rate of inflation The rate of inflation and the inflationary expectations might have some influence on the growth

of overall deposits with the banking system. It is generally assumed that the growth of total deposits is to be

negatively related with inflationary expectation. As the rate of inflation increases, people will be tempted to

divert their savings from bank deposits to any other kind of tangible assets because these assets act as hedge

against inflation.

Confidence in saving instruments People are normally very cautious in letting others have their money. Unless

and until people are assured of the reliability about the services offered by the financial institutions, increase in

aggregate savings and its mobilization through financial intermediaries can never be ensured.

Accessibility in financial institutions The accessibility of financial institutions is important in mobilizing

savings. When bank branches are located near market places and operate at convenient hours, savings will be

attracted. The higher the bank density and the more extensive its branch network, the greater the potential for

mobilizing savings.



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Transaction cost Transaction cost of holding deposits is important because high transaction cost reduce the net

return received by depositors.

Income and Wealth Effects It is commonly believed that poor saves a smaller fraction of their income than the

wealthy because they are closer to the line of subsistence; they have less flexibility in their consumption

decisions. However, according to the permanent income or life-cycle theories, saving should be used to simply

smooth consumption over time. As a result it is the time pattern of income that is important here; those with

more volatile incomes should have higher savings rates according to these theories.

Demography Standard life-cycle models state that individuals will have negative savings when they are young

and have low income, positive savings during their productive years and negative savings during their retired

years. The aggregate amount of saving will depend on the relative number of active and retired people in the

economy, which will in turn depend on the population growth rate. According to the standard model, individuals

consume all the resources available to them over their life-cycle, i.e. do not leave bequests. According to this

view, aggregate private savings will be affected by the age distribution of the population.

Macroeconomic Instability and the Terms of Trade According to the Darberger-Laursen-Metzler effect3, a

temporary improvement in the terms of trade is considered to increase the saving rate because it suggests a

transitory boost in national income, which will increase national savings. An IMF study (1995) found that

changes in the terms of trade have a strong positive effect on saving. However, other studies, for example that

undertaken by Lopez-Murphy and Navajas (1998) on Argentina, found no correlation between private savings

and terms of trade for the period 1970-1995.

Political Instability Government savings are a fundamental component of national savings. Edwards (1996)

provides a useful summary that the incentive of the authorities to increase government savings will depend on

two factors. The probability that the party in power will still be in power in the subsequent period; if this is low,

then an incumbent party has little incentive to save, as the other party will gain the credit from the subsequent

increased production of public goods. Thus the higher the degree of political instability the lower will be the

government savings. The second determinant of governmental incentives to save is the degree of political

polarization - in other words the degree of difference in the parties preferences. A greater degree of polarization

will, in theory, result in lower government savings.

Foreign Capital and Savings One of the most controversial parts of the savings literature is the relationship

between foreign capital (in particular foreign aid) and domestic savings, in the recipient countries. The debate

has a history of more than three decades and is still the subject of a continuous disagreement on the aid-

effectiveness front. The effect of foreign aid on domestic savings in developing countries has been mainly

3 Ostry and Reinhart (1992).



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analyzed in terms of the Harrod-Domar growth model and its two-gap versions associated with Hollis Chenery

and his associates in the '60s. More recent contributions in the area include Boone (1994) and Obstfeld (1995).

VI. GOVERNMENT’S POLICIES REGARDING SAVINGS MOBILIZATION4

In a country like ours the central bank (Bangladesh Bank) has the total control over the financial operations of

the nationalized banks. This governmental intervention affects the banks‟ performance and viability, particularly

of rural branches. The Bangladesh Bank formulates monetary and banking policies under the guidance and

direction of Ministry of Finance. The policies that affect the savings mobilization of rural deposits are:

Interest rate policy Before 1989, deposit and lending rates were fixed by Bangladesh Bank. In the regulated

regime interest rate were revised 3 times in 1974, 1976 and 1980. The revision of interest rate structure in 1980

is more significant than the previous revisions. The range of increase is between 2.5 to 5.75%. However, changes

in interest rate structure did not keep pace with inflation. The real weighted interest rate paid on interest bearing

deposits was negative every year from 1976 through 1984 with the exception of 1976, 1982 and 1983. In those

times, depositors were penalized for savings with banks because the purchasing power of deposits plus interest

has usually been less than the original deposit.

Refinancing Policy An off-sighted argument is that the availability of cheap rediscount funds limits the efforts

of the banks to mobilize savings (Meyer and Esuguerra), but there is little empirical research that tests for this

negative causality. In Bangladesh, prior to 1989, the central bank had an elaborate set of preferential refinancing

rates to direct credit to what were considered as "priority sectors". The rationale behind refinancing policy was to

provide the commercial banks with leeway in absorption of losses. On the 24th

of December, 1989 the

Bangladesh Bank notified all the banks about the annulment of the refinancing policy. This policy is solely

ascribable to the Financial Sector Reform Program (FSRP) of 1990, which ushered in financial liberalization in

the country. As a natural consequences of annulment of refinancing policy is that commercial banks now have to

mobilize saving to ensure regular supply of loanable funds and ensure financial sustainability thereby.

Rural Branching Policy Initially the Bangladesh Bank considered two major factors in granting licenses;

deposit potential, as a function of income, and degree of competitiveness. Later, in 1977-78, to reduce the

disparity between the number of rural and urban branches of the same banks so a “two – for – one” was

introduced. According to this policy, a bank was directed to open two rural branches for each new urban

branches. However, in 1981 this two for one policy was suspended.

Bank Rate Policy In 1993, Bangladesh Bank reduced its bank rate from 9.125% to 7.5% that prompted NCBs to

marginally lower their lending rates, but with no noticeable given depressed aggregate demand, weak business

4 This section has been prepared with the help of the article: „Deposit Mobilization in Bangladesh: Implication for rural financial Institutions

and Financial Policies‟- by Khalily, Meyer & Hushak, Published in BDS (volume XV No. 4)



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confidence, and the expected time lag in adjusting to the recent trade liberalization and industrial deregulation

measures. The Bank rate was further reduced to 6% in 1994 and 5.5% in 1995. It is yet to assess the impact of

interest rate liberalization on savings mobilization, but it can be said at this point that the interest rate changes

have failed to stimulate credit demand.

VII. TRENDS IN DEPOSITS

Deposits distributed by types of banks (Appendix A) The total bank deposits show a steady growth rate over the

years. The total bank deposits were increased by Tk. 1,143,412 lacs or 14% to Tk. 9,308,414 lacs in 2002 as

compared to increase by 15.03% to Tk. 8,165,002 lacs in 2001. Though the proportion of deposits for the NCBs

decreased from 54.17% in 2001 to 51.73% in 2002, their holding was the largest among the banks in 2002.

Interesting to see, although the total deposits increased by 52.11% to Tk. 14,158,775 lacs in 2005 and by 90.04%

to Tk. 17,689,346 lacs in April 2006 as compared to 2002, the proportion of holding by the NCBs has gradually

decreased from 51.73% in 2002 to 42.06% and 35.01% in 2005 and April 2006 respectively. Inclination of the

depositors towards the private banks resulted in the increase of the holding of the PCBs deposits. PCBs‟ holding

increased from 35.12% in 2002 to 45.12 in 2005 showing an annual growth rate of 25.15% in 2005 while that of

NCBs was only 9.16%. Still growth rate in the overall bank deposits shows a good trend.

Urban versus Rural Deposits (Appendix B and B1) Urban branches holds the greater proportion (77% to85%)

of the total deposits. Though the urban deposit shows a steady trend during the sample period, the growth rates

for the rural deposits are volatile. The total Urban deposit was Tk. 7,532,740 lacs or 80.92% of the total deposits

whereas the rural sector has Tk. 1,775,654 or 19.08% in 2002. In 2006, this total urban deposit reached Tk.

13,422,996 lacs (85.6% of the total deposit) whereas the volatility in the growth rate for the rural deposits

resulted in Tk. 2,253,639.

Division-wise distribution of deposits per branch (Appendix C) Dhaka division always has the highest portion

of the total deposits and also the highest deposits per branch compared to other divisions. Surprisingly, Sylhet

division showed much better and stable growth tare trend in Deposit per Branch.

Deposits Distributed by Types of Accounts (Appendix D) In 2001, the proportion of the savings deposits for

NCBs was Tk. 1,489,324 lacs or 33.67% and followed by 25.12% share, Tk. 1,111,127 Lacs of Fixed Deposits.

These two accounts hold the major share of the total deposits of NCBs. In 2002, both the proportion of shares

increased even higher. Savings deposits went up to Tk. 1,661,356 Lacs (337.56%) and the Fixed Deposits went

up to Tk. 1,275,153 lacs (28.83%). The proportion of the fixed deposits for the NCBs in 2005 and 2006 were

25.25% and 23.63%. 35.11% and 34.56% of the total deposits for the NCBs were held as Savings deposits in

2005 and 2006 respectively. Comparing macro scenario, the nature of the holdings of the accounts are much

different as in the NCBs. Even though for all the banks, the higher proportions were held by the fixed and the

savings deposited, the proportion of the Negotiable Certificate of Deposits & Promissory Notes and Restricted



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(Blocked) Deposits suddenly increased in 2002. During this period the savings deposits fell to 9.18% and the

fixed deposit fell to 6.79%.

Deposits distributed by Size of the Accounts (Appendix E) For NCBs during 2001, about 46.93% of the total

deposit of NCBs were upto Tk. 200,000, whereas for all banks it was only 36.06%. In 2002, the share of

amounts in these accounts rose 47.06% in 2002 for NCBs. In 2005 and 2006, these proportions of the deposits

decreased slightly to 43.81% and 43.84% respectively. During the same periods the proportions for all banks

decreased to 30.29% and 29.29%.

Deposits Distributed By Major Sectors (Appendix F) Private sector deposits were seen having higher portion of

the total bank deposits. For all types of banks the ratio of public sector deposit to private sector deposits varied

from 0.20 to 0.27. In 2001 81.31% shares of total bank deposits were with the private sector. In 2002 this

proportion rose even further to 82.88%. But For NCBs this share of deposits was 75.48% in 2001 and 76.53% in

2002 respectively. In 2006 this percentage decreased slightly to 72.54%. The ratio between the public sector

deposits to private sector deposits varied from 0.31 to 0.40.

Branch per Thousand Population (Appendix G) The number of branches per thousands population varied

between 0.0486 to 0.0543. The number of branches per thousand populations decreased to 0.0468 in 2006

comparing with 0.05000 in 2001. The overall growth rate in branches per thousand populations is not good.

Population per Branch (Appendix H) The number of population served by a single branch has increased since

2000. It was 18,404.06 in 2000 but increased by 11.87% to 20,587.77 in 2002. Though the population per branch

has increased by 3.374% in 2006 compared to 2002, still this increase is not a good sign at all as the higher the

number served will put extra pressure on the branch. Thus the quality of the service might fall.

Per Capita Deposit (Appendix I) The per capita deposit is increasing as the over the years showing a good sign.

It reached Tk. 11,442.80 in 2006 from only Tk. 4,233.94 in 1997which is almost 171% growth rate during this

period.

Deposits to GDP Ratio (Appendix J) The ratio of Deposit to GDP showed an increase in 1999 over 1998. But

the attracting fact is the 4.18% increase in ratio in the urban sector by 4.18% in 1999.

Weighted Average Rate of interest on Deposits (Appendix K) The rates are seen fluctuating over the years. But

these fluctuations were steady one.

VIII. EMPIRICAL FINDINGS

Total Deposit



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As was predicted almost all the coefficients came out with their expected signs. Income level, literacy rate and

the road index seemed highly significant at 1% level of significance. The non-negative transaction cost implies

that as the transaction facilities are improving gradually and because of the introduction of the ATM booths and

the online banking, the individuals are not that concerned about the location of the banks. Besides, the rates of

returns on substitute investment opportunities do have an impact on the savings behaviors of the individuals.

Total Urban Deposit

Like the total deposits, income level, Literacy rate and the Transaction costs coefficients are significant at 1%

level of significance. For the urban deposits, the interest rate does motivate the savings behavior of the

individuals. The rates of returns on substitute investment opportunities too are significant at 10% significance

level.

Total Rural Deposits

The results are somewhat different for the rural saving mobilization behavior. Though income level, literacy rate

and the transaction cost plays important role in savings mobilization, the transaction cost coefficient has its

expected sigh. This is particularly true as the banking network in the rural areas are not up to the mark and same

goes for the transport facilities in the suburbs. The number of bank branches too is significant at 5% level of

significance. Along with educating the individuals if the number of bank branches is increased, the result will be

the increase in the total rural savings.

t-statistics are in parentheses

Total

Deposits

Urban

Deposits

Rural

Deposits

C9.101*

(2.55)

8.08*

(2.04)

7.211*

(2.43)

ln Y2.229*

(2.39)

2.615*

(5.90)

0.316*

(2.42)

ln BR0.356

(0.75)

0.319

(0.702)

0.591**

(2.69)

lnInt0.116

(1.10)

0.103*

(2.18)

0.112

(1.09)

ln Infl- 0.059

(- 1.21)

- 0.12

(- 1.09)

- 0.062

(- 1.19)

ln SI-0.055**

(4.35)

-0.13***

(3.58)

-0.030

(1.28)

ln L2.095*

(6.59)

2.101*

(5.45)

2.012*

(4.81)

ln TC0.335*

(5.18)

0.425*

(4.16)

-0.651*

(4.86)

R2 0.8915 0.9015 0.8702

DW 2.301 2.115 2.038



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*, ** and *** are level of significance at 1%, 5% and 10% respectively.

IX. CONCLUSION

The deposit mobilization is not at all an easy task, rather it is both critical and complicated issue. One of the

main factors that affect the savings mobilization is the consciousness of the people. The more the people are

conscious the higher will be the savings mobilization. In the rural area the people are mostly ignorant and afraid

to lend other their money. Rather they prefer to hold land or gold than to go for the savings. Thus this savings

mobilization in the rural area has become a complicated issue and certain strategic policy is required to induce

rural people to go for savings. Thus the strategy requires policy and procedural changes, development of

innovative programs and improvement in the quality of services provided to the depositors.

REFERENCES:

“Bank Parikrama”, Bangladesh Bank (1992-2006)

“Choice for The Poor”, UNDP

“Commercial Banks in MicroFinance: A new actor in the MicroFinance

World”, Focus Note No. 12, July 1998, CGAP

“Developing Deposit Services for the Poor: Preliminary Guidance for the

Donors”, Draft April 2002

“Economic Trends”, Bangladesh Bank (1992-2006)

“Introducing Savings in MicroCredti Institution: When and How?”, Focus

Note No. 8, April 1997, CGAP

“Savings Mobilization Strategies: lessons from four experiences”, Focus Note

No. 13, August 1998, CGAP

“Scheduled Banks Statistics”, Bangladesh Bank (1992-2002)

“Sierra Leone: Country Strategy paper, 1996-1998”, Country Operations

Department- west, November 1996

“Statistical Year Book Of Bangladesh”, Bangladesh Bureau of Statistics

(1992-2002)

“The Joint Conference of African Ministers of Finance and Ministers of

Economic Development and Planning”, ECA‟s Thirty-third session of the

Commission/ 24th meeting of the Conference of Ministers / 7th Conference of African

Ministers of Finance, May, 1999, Addis Ababa, Ethiopia

“The MicroFinance experience with savings mobilization”, Technical Note

No. 3, Released 10/2000, USAID

Aryeetey, E. and Steel, W.F., “Savings collectors and Financial

intermediation in Ghana”, University of Ghana and World Bank respectively

Bahar, H, “Behaviour of Bank Deposits in Bangladesh: Some findings”,

Deputy General Manager, Research Department, Bangladesh Bank



ISBN 978-0-9925622-0-5

13

Bartle, P., “Savings Mobilization”, February 2003, [email protected]

Buckley, G, “MicroFinance in Africa: Is it either the problem or the

Solution?”, World Development, Vol. 25, No. 7, 1997

Cracknell, D, “Regulation of MicroFinance in Bangladesh: A long path to

progress”, DFID, Bangladesh.

Elser, L., Hannig, A. and Wisniwski, S. (1999), “Comparative analysis of

Savings Mobilization Strategies”, CGAP Working Papers, Eschborn

Galbraith, J.K. (1975). “Money: whence it come, where it went”, Boston:

Houghto Miffllin

Ghate, P. et. al. (1992) Informal finance: Some findings from Asia, Oxford

university Press, Hong Kong

Goldstein, G. and Barro, I., “The role and impact of savings mobilization in

West Africa: A study of the informal and intermediary financial sectors”, Vol. 1, Final

Report, UNDP and UNCDF, 1999

Hanning, A., “Savings in the context of MicroFinance- A conceptual

framework”, GTZ 1998

Higgins, M., and J. Williamson (1996), “Asian Demography and Foreign

Capital Dependence”, National Bureau of Economic Research Working Paper 5560,

May

Hossein Jalilian and Colin Kirkpatrick (2001), "Financial Development And

Poverty Reduction In Developing Countries", Working Paper Series: DFID-funded

Research Programme in Finance and Development (FDRP) managed by IDPM

Imran Matin (2002), “New Thinking and New Forms of Microfinancial

Service Provision in Bangladesh: A Comparative Study of ASA, SafeSave and Gono

Bima”, Finance And Development Research Programme Working Paper Series

Khalily B., M. A., Meyer, R L and Hushak, L J, “Deposit Mobilization in

Bangladesh: Implications for Rural Financial Institutions and Financial Policies”,

The Bangladesh Development Studies, Vol. XV, December 1987, No. 4.

Maloney, Clarence and Sharfuddin Ahmed, A. B. “Informal savings and

credit groups in Bangladesh”, USAID, p-86, 1988

Mavrotas, G. and Kelly, R., “Financial sector Development and Savings

mobilization: An assessment”, Finance & Development Research Program, DFID, UK,

November 1999

Mosley, P., “Micro-Macro linkage in financial markets: The impact of

financial liberalization on access to rural credit in four African countries”, Working

Paper 4

Rahman, R. I., “Poverty Alleviation through IPRSP: Past Experience and

future Goals”, Research Director, BIDS

Rahman, S. M., “Commercialization of MicroFinance in Bangladesh

Perspective”, Director, CDF, Bangladesh

Robinson, M, “Savings Mobilization as a Financial Instrument and its




ISBN 978-0-9925622-0-5

14

Relevence for the Poor”, HIID Institute Fellow Emeritus, December 18, 2000

Robinson, M. and Wright, G., “MicroSave- Africa: Mobilizing Savings”,

Briefing Note # 3

Robinson, M., “Introducing Savings in MicroCredit Institutions: When and

How?”, Focus Note 8, Synopsis of a paper presented to the Microfinance Network,

Cavite, Philippines, 1995

Rutherford, S, “The Economics of Poverty: How Poor People Manage Their

Money”, Chairman, SafeSave Bangladesh

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Services in Bangladesh”, Journal of International Development, Vol. 10, No.1, pp.1-15

Sarantis, N. and Stewart, C., “Saving behaviour in OECD Countries:

Evidence from Panel Contegration Tests”, Department of Economics, London

Guildhall University, UK

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they reach the poor? - A case of CARD Rural Bank in the Philippines”, Working Paper

No. B1, IFAD

Tiwari, P. and Fahad, S. M., “Concept Paper: MicroFinance Institutions in

India”, Housing Development and Finance Corporation, Mumbai

Yn Liu, L and Thye Woo, W, “Savings Behaviour under imperfect financial

markets and the current account consequences”, The Economic Journal, 104 (May)



ISBN 978-0-9925622-0-5

15

Appendix A

Source: “Statistical Year

Book of Bangladesh”,

Bangladesh Bureau of

Statistics (1992-2006)

Appendix B

Year NCBs Specialized Banks Foreign BanksPrivate Banks

(Including IBs)Islamic Banks Total

1,692,509 130,893 135,222 659,533 - 2,618,157

64.65% 5.00% 5.16% 25.19%

-

1,879,954 166,665 140,302 807,605 - 2,994,526

62.78% 5.57% 4.69% 26.97%

11.07 27.33 3.76 22.45 14.38

-

2,134,438 205,897 152,227 902,279 - 3,394,841

62.87% 6.06% 4.48% 26.58%

13.54 23.54 8.50 11.72 13.37

-

2,401,521 234,711 187,359 1,068,821 - 3,892,412

61.70% 6.03% 4.81% 27.46%

12.51 13.99 23.08 18.46 14.66

-

2,444,441 197,756 244,392 1,064,363 - 3,950,952

61.87% 5.01% 6.19% 26.94%

1.79 (15.74) 30.44 (0.42) 1.50

2,896,929 251,255 298,671 1,272,081 - 4,718,936

61.39% 5.32% 6.33% 26.96%

18.51 27.05 22.21 19.52 19.44

3,177,479 280,828 352,584 1,389,560 209,298 5,200,451

61.10% 5.40% 6.78% 26.72% 4.02%

9.68 11.77 18.05 9.24 10.20

3,534,615 328,228 412,128 1,624,441 310,880 5,899,412

59.91% 5.56% 6.99% 27.54% 5.27%

11.24 16.88 16.89 16.90 48.53 13.44

3,961,728 423,212 562,546 2,150,639 410,837 7,098,125

55.81% 5.96% 7.93% 30.30% 5.79%

12.08 28.94 36.50 32.39 32.15 20.32

4,422,675 527,325 553,779 2,661,223 506,752 8,165,002

54.17% 6.46% 6.78% 32.59% 6.21%

11.63 24.60 (1.56) 23.74 23.35 15.03

4,815,530 588,145 626,824 3,277,895 665,048 9,308,394

51.73% 6.32% 6.73% 35.21% 7.14%

8.88 11.53 13.19 23.17 31.24 14.00

5,166,538 665,469 750,709 4,157,963 947,900 10,740,679

48.10% 6.20% 6.99% 38.71% 8.83%

7.29 13.15 19.76 26.85 42.53 15.39

5,455,619 750,467 843,608 5,104,317 1,217,781 12,154,011

44.89% 6.17% 6.94% 42.00% 10.02%

5.60 12.77 12.37 22.76 28.47 13.16

5,955,120 870,942 944,549 6,388,164 1,696,911 14,158,775

42.06% 6.15% 6.67% 45.12% 11.98%

9.16 16.05 11.97 25.15 39.34 16.49

6,192,558 914,119 1,031,403 7,538,555 2,012,711 17,689,346

35.01% 5.17% 5.83% 42.62% 11.38%

3.99 4.96 9.20 18.01 18.61 24.94

2002

Deposits Distributed by Types of BanksAs per June 30

Amounts In Lacs of Taka

1996

1997

1998

1999

2003

2004

2005

2006*

1992

1993

1994

1995

2000

2001

Dep

osi

tsP

rop

ort

ion

Gro

wth

Dep

osi

tsP

rop

ort

ion

Gro

wth

Dep

osi

tsG

row

th

1997

3,64

8,45

1

0.

773

1,07

0,48

5

0.

227

4,

718,

936

1998

4,01

0,43

3

0.

771

9.92

%1,

190,

018

0.22

9

11.1

7%5,

200,

451

10.2

0%

1999

4,55

5,79

9

0.

772

13.6

0%1,

343,

613

0.22

8

12.9

1%5,

899,

412

13.4

4%

2000

5,49

2,27

3

0.

774

20.5

6%1,

605,

852

0.22

6

19.5

2%7,

098,

125

20.3

2%

2001

6,56

3,06

8

0.

804

19.5

0%1,

601,

934

0.19

6

-0.2

4%8,

165,

002

15.0

3%

2002

7,53

2,74

0

0.

809

14.7

7%1,

775,

654

0.19

1

10.8

4%9,

308,

394

14.0

0%

2003

8,83

2,80

8

0.

822

17.2

6%1,

907,

871

0.17

8

7.45

%10

,740

,679

15

.39%

2004

10,2

37,2

23

0.84

2

15

.90%

1,92

0,38

8

0.

158

0.

66%

12,1

57,6

11

13.1

9%

2005

11,9

76,1

27

0.84

6

16

.99%

2,18

2,64

8

0.

154

13

.66%

14,1

58,7

75

16.4

6%

2006

13,4

22,9

96

0.85

6

12

.08%

2,25

3,63

9

0.

144

3.

25%

15,6

76,6

35

10.7

2%

Sou

rce:

"S

ched

uld

Ban

k S

tati

stic

s", B

angl

ades

h B

ank

(199

1-20

06)

Yea

rR

ura

lT

ota

l

Urb

an v

ersu

s R

ura

l D

epos

its

As

Per

Ju

ne

30

Am

onut

s in

Lac

s of

Tak

a

Urb

an



ISBN 978-0-9925622-0-5

16

Appendix B1

Dep

osits

Num

ber

of

Bra

nche

s

Dep

osits

per

Bra

nch

Gro

wth

Dep

osits

Num

ber

of

Bra

nche

s

Dep

osits

per

Bra

nch

Gro

wth

Dep

osits

Num

ber

of

Bra

nche

s

Dep

osits

per

Bra

nch

Gro

wth

1997

3,64

8,45

1

2,29

9

1,

586.

97

1,

070,

485

3,

612

296.

37

4,71

8,93

6

5,

911

79

8.33

1998

4,01

0,43

3

2,33

0

1,

721.

22

8.

46%

1,19

0,01

8

3,62

2

32

8.55

10

.86%

5,20

0,45

1

5,

952

87

3.73

9.

44%

1999

4,55

5,79

9

2,36

2

1,

928.

79

12

.06%

1,34

3,61

3

3,62

0

37

1.16

12

.97%

5,89

9,41

2

5,

982

98

6.19

12

.87%

2000

5,49

2,27

3

2,43

2

2,

258.

34

17

.09%

1,60

5,85

2

3,62

4

44

3.12

19

.39%

7,09

8,12

5

6,

056

1,

172.

08

18

.85%

2001

6,56

3,06

8

2,48

0

2,

646.

40

17

.18%

1,60

1,93

4

3,67

6

43

5.78

-1

.66%

8,16

5,00

2

6,

156

1,

326.

35

13

.16%

2002

7,53

2,74

0

2,51

2

2,

998.

70

13

.31%

1,77

5,65

4

3,76

6

47

1.50

8.

20%

9,30

8,39

4

6,

278

1,

482.

70

11

.79%

2003

8,83

2,80

8

2,48

6

3,

553.

02

18

.49%

1,90

7,87

1

3,67

3

51

9.43

10

.17%

10,7

40,6

79

6,15

9

1,74

3.90

17.6

2%

2004

10,2

37,2

23

2,

537

4,03

5.17

13.5

7%1,

920,

388

3,

699

519.

16

-0.0

5%12

,157

,611

6,

236

1,

949.

58

11

.79%

2005

11,9

76,1

27

2,

586

4,63

1.14

14.7

7%2,

182,

648

3,

732

584.

85

12.6

5%14

,158

,775

6,

318

2,

241.

02

14

.95%

2006

13,4

22,9

96

2,

645

5,07

4.86

9.58

%2,

253,

639

3,

767

598.

26

2.29

%15

,676

,635

6,

412

2,

444.

89

9.

10%

Sour

ce: "

Sche

duld

Ban

k St

atis

tics"

, Ban

glad

esh

Ban

k (1

991-

2006

)

Urb

an v

ersu

s R

ural

Dep

osits

and

Dep

osits

per

Bra

nch

As

Per

June

30

Am

onut

s in

Lac

s of

Tak

aU

rban

Yea

r

Rur

alT

otal



ISBN 978-0-9925622-0-5

17

Number of

AccountsAmount

As % of Total

Amount

Avg. Amount

per AccountNumber of Accounts Amount

As % of Total

Amount

Avg. Amount

per Account

Current & Cash Credit 1,698,504 559,444 12.65 0.33 2,607,420 944,759 11.57 0.36

Deposits Withdrawable on

Sight 273,311 55,460 1.25 0.20 460,939 201,729 2.47 0.44

Savings Deposits 15,367,927 1,489,324 33.67 0.10 20,992,071 2,431,615 29.78 0.12

Convertible Taka Account of

foreigners 23,110 5,173 0.12 0.22 24,269 10,273 0.13 0.42

Foreigncurrency Accounts3,515 6,693 0.15 1.90 11,350 77,439 0.95 6.82

Short-term Deposits 131,184 411,855 9.31 3.14 187,272 772,604 9.46 4.13

Fixed Deposits 506,507 1,111,127 25.12 2.19 858,567 2,608,509 31.95 3.04

Pension Scheme Deposits2,903,384 643,349 14.55 0.22 3,665,576 811,284 9.94 0.22

Margin Deposits 545 3,286 0.07 6.03 9,646 62,556 0.77 6.49

Special Purpose Deposits 305,266 136,959 3.10 0.45 326,470 180,743 2.21 0.55

Negotiable Certificate of

Deposits & P Notes 368 2 0.00 0.01 43,252 58,604 0.72 1.35

Restricted (Blocked)

Deposits 1 3 0.00 3.00 194,378 4,887 0.06 0.03

Total 21,213,622 4,422,675 0.21 29,381,210 8,165,002 0.28

Number of

AccountsAmount

As % of Total

Amount

Avg. Amount


As % of Total

Amount

Avg. Amount

per Account

Current & Cash Credit 1,675,676 527,993 10.96 0.32 19,871,027 281,081 4.23 0.01


Sight 236,882 47,494 0.99 0.20 3,368,217 241,128 3.63 0.07

Savings Deposits 15,976,810 1,661,356 34.50 0.10 3,770,688 610,475 9.18 0.16


foreigners 31 5,130 0.11 165.48 1,881,440 661,058 9.94 0.35

Foreigncurrency Accounts58,176 30,066 0.62 0.52 1,008,769 710,486 10.69 0.70

Short-term Deposits 90,048 420,798 8.74 4.67 596,030 804,706 12.10 1.35

Fixed Deposits 572,048 1,275,153 26.48 2.23 184,944 451,266 6.79 2.44

Pension Scheme Deposits2,823,535 711,647 14.78 0.25 83,177 287,498 4.32 3.46

Margin Deposits 1,294 5,582 0.12 4.31 61,530 278,663 4.19 4.53



Deposits & P Notes 715 64 0.00 0.09 62,439 947,392 14.25 15.17


Deposits 57 37 0.00 0.65 16,109 572,619 8.61 35.55

Total 21,837,698 4,815,530 0 31,018,546 6,648,224 0.21

Source: "Scheduld Bank Statistics", Bangladesh Bank (1991-2006)

All Banks

Types of Deposits

2001

NCBs All Banks

Types of Deposits

2002

NCBs

Deposits Distributed by Types of Accounts(By Types of Accounts)

As per March 31

Amounts in Lacs of Taka

Appendix C

Appendix D

Dep

osi

tsN

um

ber o

f

Bran

ch

es

Dep

osi

ts p

er

Bran

ch

Gro

wth

Dep

osi

tsN

um

ber o

f

Bran

ch

es

Dep

osi

ts p

er

Bran

ch

Gro

wth

Dep

osi

tsN

um

ber o

f

Bran

ch

es

Dep

osi

ts p

er

Bran

ch

Gro

wth

19

92

72

3,1

39

1,6

20

44

6.3

8

1,4

36

,25

4

1,7

00

84

4.8

6

23

2,8

00

1,0

46

22

2.5

6

19

93

81

4,2

28

1,6

46

49

4.6

7

10

.82

%1

,65

8,2

28

1,7

22

96

2.9

7

13

.98

%1

97

,16

4

70

4

28

0.0

6

25

.84

%

19

94

92

3,2

74

1,6

56

55

7.5

3

12

.71

%1

,87

9,0

09

1,7

38

1,0

81

.13

12

.27

%2

17

,28

9

70

9

30

6.4

7

9.4

3%

19

95

1,0

52

,80

0

1,6

56

63

5.7

5

14

.03

%2

,17

5,2

24

1,7

58

1,2

37

.33

14

.45

%2

45

,62

8

71

2

34

4.9

8

12

.57

%

19

96

88

4,0

88

1,2

20

72

4.6

6

13

.99

%2

,35

8,8

70

1,7

89

1,3

18

.54

6.5

6%

26

5,0

03

71

8

36

9.0

8

6.9

9%

19

97

98

4,5

19

1,2

26

80

3.0

3

10

.81

%2

,62

7,8

40

1,8

00

1,4

59

.91

10

.72

%2

97

,43

0

71

9

41

3.6

7

12

.08

%

19

98

1,1

00

,28

8

1,2

32

89

3.0

9

11

.21

%2

,85

2,0

43

1,8

34

1,5

55

.09

6.5

2%

33

0,3

22

72

2

45

7.5

1

10

.60

%

19

99

1,2

12

,67

1

1,2

35

98

1.9

2

9.9

5%

3,2

96

,77

0

1,8

52

1,7

80

.11

14

.47

%3

64

,01

0

72

5

50

2.0

8

9.7

4%

20

00

1,4

61

,71

3

1,2

63

1,1

57

.33

17

.86

%4

,03

4,8

97

1,9

11

2,1

11

.41

18

.61

%4

32

,14

2

73

0

59

1.9

8

17

.90

%

20

01

1,6

83

,03

1

1,2

75

1,3

20

.02

14

.06

%4

,64

9,2

52

1,9

55

2,3

78

.13

12

.63

%4

95

,50

2

73

4

67

5.0

7

14

.04

%

20

02

1,9

27

,23

2

1,3

00

1,4

82

.49

12

.31

%5

,31

6,6

33

1,9

99

2,6

59

.65

11

.84

%5

35

,34

1

73

2

73

1.3

4

8.3

4%

20

03

2,1

84

,77

6

1,2

98

1,6

83

.19

13

.54

%6

,24

8,9

13

1,9

97

3,1

29

.15

17

.65

%6

19

,49

7

71

6

86

5.2

2

18

.31

%

20

04

2,4

30

,86

7

1,3

15

1,8

48

.57

9.8

3%

7,2

20

,25

0

2,0

45

3,5

30

.68

12

.83

%6

27

,10

6

71

5

87

7.0

7

1.3

7%

20

05

2,7

90

,40

6

1,3

32

2,0

94

.90

13

.33

%8

,50

3,2

47

2,0

77

4,0

94

.00

15

.95

%7

18

,57

1

72

0

99

8.0

2

13

.79

%

20

06

3,0

95

,39

5

1,3

58

2,2

79

.38

8.8

1%

9,5

49

,94

7

2,1

12

4,5

21

.76

10

.45

%7

65

,14

9

72

5

1,0

55

.38

5.7

5%

Dep

osi

tsN

um

ber o

f

Bran

ch

es

Dep

osi

ts p

er

Bran

ch

Gro

wth

Dep

osi

tsN

um

ber o

f

Bran

ch

es

Dep

osi

ts p

er

Bran

ch

Gro

wth

Dep

osi

tsN

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36

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52

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ank

(1

99

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ISBN 978-0-9925622-0-5

18

Appendix D (continued)

Number of

AccountsAmount

As % of Total

Amount

Avg. Amount


As % of Total

Amount

Avg. Amount

per Account

Current & Cash Credit 1,482,664 610,477 11.00 0.41 2,954,269 1,201,079 9.15 0.41


Sight 154,050 55,029 0.99 0.36 441,836 245,355 1.87 0.56



foreigners - - 0.00 0.00 1,458 6,285 0.05 4.31


Short-term Deposits 192,597 510,892 9.21 2.65 286,636 1,012,591 7.72 3.53

Fixed Deposits 390,490 1,401,252 25.25 3.59 946,443 4,804,473 36.61 5.08

Pension Scheme Deposits2,083,027 830,940 14.98 0.40 3,557,479 1,400,038 10.67 0.39

Margin Deposits 6,966 15,028 0.27 2.16 32,336 165,901 1.26 5.13



Deposits & P Notes 90 20 0.00 0.22 89,907 106,893 0.81 1.19


Deposits 1 - 0.00 0.00 154,942 2,454 0.02 0.02

Total 20,223,800 5,548,723 0.27 31,842,711 13,124,591 0.41

Number of

AccountsAmount

As % of Total

Amount

Avg. Amount


As % of Total

Amount

Avg. Amount

per Account

Current & Cash Credit 1,516,835 724,665 11.70 0.48 3,215,082 1,431,169 9.13 0.45


Sight 143,886 47,048 0.76 0.33 222,636 232,508 1.48 1.04



foreigners 48 28,595 0.46 595.73 1,495 50,066 0.32 33.49


Short-term Deposits 251,228 631,744 10.20 2.51 354,481 1,249,660 7.97 3.53

Fixed Deposits 428,680 1,463,303 23.63 3.41 1,118,005 5,891,934 37.58 5.27

Pension Scheme Deposits1,919,428 898,479 14.51 0.47 3,752,136 1,680,860 10.72 0.45

Margin Deposits 1,240 23,700 0.38 19.11 13,197 166,916 1.06 12.65



Deposits & P Notes 516 62 0.00 0.12 68,973 71,772 0.46 1.04


Deposits 2 - 0.00 0.00 155,743 3,673 0.02 0.02

Total 20,798,871 6,192,558 0 33,598,757 15,676,635 0.47


Types of Deposits

Types of Deposits

2006

NCBs All Banks

2005

NCBs All Banks


Deposits Distributed by Types of Accounts(By Types of Accounts)

As per March 31



ISBN 978-0-9925622-0-5

19

Number of

AccountsAmount

As % of

Total

Amount

Avg.

Amount

per

Account

Number of

AccountsAmount

As % of

Total

Amount

Avg. Amount

per Account

Upto 5000 13,727,088 188,067 4.25 0.01 19,174,716 261,091 3.20 0.01

5001-10000 2,360,320 172,359 3.90 0.07 3,192,394 232,039 2.84 0.07

10001-25000 2,834,317 454,428 10.27 0.16 3,595,655 576,010 7.05 0.16

25001-50000 1,159,081 402,408 9.10 0.35 1,560,767 547,463 6.70 0.35

50001-100000 582,273 407,509 9.21 0.70 870,580 613,561 7.51 0.70

100001-200000 335,810 443,325 10.02 1.32 531,498 715,208 8.76 1.35

200001-300000 84,775 204,693 4.63 2.41 156,123 379,632 4.65 2.43

300001-400000 39,852 136,961 3.10 3.44 75,024 258,797 3.17 3.45

400001-500000 23,381 104,553 2.36 4.47 52,574 238,028 2.92 4.53

500001-1000000 36,911 255,947 5.79 6.93 93,829 661,316 8.10 7.05

1000001-2500000 19,885 298,938 6.76 15.03 51,761 789,776 9.67 15.26

2500001-5000000 4,950 172,540 3.90 34.86 14,151 501,601 6.14 35.45

5000001-7500000 1,752 106,932 2.42 61.03 4,402 266,548 3.26 60.55

7500001-10000000 970 86,041 1.95 88.70 2,623 237,172 2.90 90.42

10000001-50000000 1,834 387,114 8.75 211.08 4,345 878,064 10.75 202.09

50000001-100000000 241 172,686 3.90 716.54 482 340,692 4.17 706.83

100000000 and Above 182 428,174 9.68 2352.60 286 668,004 8.18 2335.68

Total 21,213,622 4,422,675 0 29,381,210 8,165,002 0.28

Number of

AccountsAmount

As % of

Total

Amount

Avg.

Amount

per

Account

Number of

AccountsAmount

As % of

Total

Amount

Avg. Amount

per Account

Upto 5000 13,950,806 195,830 4.07 0.01 19,871,027 281,081 3.02 0.01

5001-10000 2,405,324 173,392 3.60 0.07 3,368,217 241,128 2.59 0.07

10001-25000 2,846,826 463,044 9.62 0.16 3,770,688 610,475 6.56 0.16

25001-50000 1,382,907 481,565 10.00 0.35 1,881,440 661,058 7.10 0.35

50001-100000 639,060 448,680 9.32 0.70 1,008,769 710,486 7.63 0.70

100001-200000 378,600 503,112 10.45 1.33 596,030 804,706 8.64 1.35

200001-300000 90,742 219,617 4.56 2.42 184,944 451,266 4.85 2.44

300001-400000 42,668 147,069 3.05 3.45 83,177 287,498 3.09 3.46

400001-500000 25,842 115,408 2.40 4.47 61,530 278,663 2.99 4.53

500001-1000000 42,695 294,709 6.12 6.90 114,176 801,852 8.61 7.02

1000001-2500000 21,714 319,043 6.63 14.69 62,439 947,392 10.18 15.17

2500001-5000000 5,276 186,010 3.86 35.26 16,109 572,619 6.15 35.55

5000001-7500000 1,832 112,078 2.33 61.18 5,165 311,099 3.34 60.23

7500001-10000000 790 71,327 1.48 90.29 2,813 257,254 2.76 91.45

10000001-50000000 2,084 438,161 9.10 210.25 5,108 1,022,699 10.99 200.22

50000001-100000000 339 229,399 4.76 676.69 589 402,489 4.32 683.34

100000000 and Above 193 417,086 8.66 2161.07 326 666,649 7.16 2044.94

Total 21,837,698 4,815,530 0 31,032,547 9,308,414 0.30


NCBs

Size of Accounts (Tk.)

All Banks

Deposits Distributed by Size of Accounts(By Size of Accounts)

As per March 31


2001


2002

NCBs All Banks

Appendix E



ISBN 978-0-9925622-0-5

20

Appendix E (continued)

Number of

AccountsAmount

As % of

Total

Amount

Avg.

Amount

per

Account

Number of

AccountsAmount

As % of

Total

Amount

Avg. Amount

per Account

Upto 5000 12,210,469 191,812 3.22 0.02 19,175,142 281,026 1.98 0.01

5001-10000 2,549,131 182,976 3.07 0.07 3,612,099 258,888 1.83 0.07

10001-25000 2,551,739 415,517 6.98 0.16 4,009,357 663,987 4.69 0.17

25001-50000 1,649,933 599,114 10.06 0.36 2,553,913 916,804 6.48 0.36

50001-100000 998,485 684,597 11.50 0.69 1,573,309 1,094,585 7.73 0.70

100001-200000 396,764 534,697 8.98 1.35 782,834 1,073,314 7.58 1.37

200001-300000 108,417 262,145 4.40 2.42 253,031 621,604 4.39 2.46

300001-400000 50,794 174,241 2.93 3.43 139,275 479,149 3.38 3.44

400001-500000 28,545 127,071 2.13 4.45 91,180 412,883 2.92 4.53

500001-1000000 52,213 363,063 6.10 6.95 169,186 1,193,951 8.43 7.06

1000001-2500000 27,398 410,222 6.89 14.97 103,594 1,602,430 11.32 15.47

2500001-5000000 6,474 225,641 3.79 34.85 26,837 948,011 6.70 35.32

5000001-7500000 1,874 113,097 1.90 60.35 7,748 465,512 3.29 60.08

7500001-10000000 1,096 95,506 1.60 87.14 4,631 419,903 2.97 90.67

10000001-50000000 3,087 654,896 11.00 212.15 9,415 1,895,256 13.39 201.30

50000001-100000000 352 240,364 4.04 682.85 954 667,393 4.71 699.57

100000000 and Above 256 680,161 11.42 2656.88 512 1,164,079 8.22 2273.59

Total 20,637,027 5,955,120 0 32,513,017 14,158,775 0.44

Number of

AccountsAmount

As % of

Total

Amount

Avg.

Amount

per

Account

Number of

AccountsAmount

As % of

Total

Amount

Avg. Amount

per Account

Upto 5000 12,293,295 186,996 3.02 0.02 19,706,765 283,799 1.81 0.01

5001-10000 2,635,055 190,336 3.07 0.07 3,752,641 269,464 1.72 0.07

10001-25000 2,382,905 375,656 6.07 0.16 3,910,389 631,700 4.03 0.16

25001-50000 1,623,625 583,781 9.43 0.36 2,641,387 942,020 6.01 0.36

50001-100000 1,139,236 793,591 12.82 0.70 1,815,483 1,277,961 8.15 0.70

100001-200000 433,532 583,787 9.43 1.35 866,239 1,186,207 7.57 1.37

200001-300000 114,899 276,243 4.46 2.40 285,386 699,700 4.46 2.45

300001-400000 51,258 175,886 2.84 3.43 157,604 542,933 3.46 3.44

400001-500000 30,182 134,894 2.18 4.47 102,077 464,701 2.96 4.55

500001-1000000 53,434 370,844 5.99 6.94 188,170 1,330,957 8.49 7.07

1000001-2500000 28,903 426,544 6.89 14.76 115,661 1,765,542 11.26 15.26

2500001-5000000 5,937 205,059 3.31 34.54 30,744 1,081,787 6.90 35.19

5000001-7500000 1,797 108,344 1.75 60.29 8,906 537,481 3.43 60.35

7500001-10000000 1,280 114,368 1.85 89.35 5,549 506,776 3.23 91.33

10000001-50000000 2,846 610,846 9.86 214.63 10,057 1,998,450 12.75 198.71

50000001-100000000 434 288,728 4.66 665.27 1,147 794,870 5.07 693.00

100000000 and Above 253 766,655 12.38 3030.26 552 1,362,287 8.69 2467.91

Total 20,798,871 6,192,558 0 33,598,757 15,676,635 0.47


Deposits Distributed by Size of Accounts(By Size of Accounts)

As per March 31



2006

NCBs All Banks


2005

NCBs All Banks



ISBN 978-0-9925622-0-5

21

Appendix F

GovernmentOther Than

GovernmentTotal

365,251 725,899 1,091,150 4,109,301 5,200,451

7.02% 13.96% 20.98% 79.02%

471,374 759,610 1,230,984 4,668,428 5,899,412

7.99% 12.88% 20.87% 79.13%

29.05 4.64 12.82 13.61 13.44

522,483 853,377 1,375,860 5,722,265 7,098,125

7.36% 12.02% 19.38% 80.62%

10.84 12.34 11.77 22.57 20.32

598,279 927,707 1,525,986 6,639,016 8,165,002

7.33% 11.36% 18.69% 81.31%

14.51 8.71 10.91 16.02 15.03

605,134 988,547 1,593,681 7,714,713 9,308,394

6.50% 10.62% 17.12% 82.88%

1.15 6.56 4.44 16.20 14.00

679,905 1,100,904 1,780,809 8,959,870 10,740,679

6.33% 10.25% 16.58% 83.42%

12.36 11.37 11.74 16.14 15.39

741,073 1,342,218 2,083,291 10,074,320 12,157,611

6.10% 11.04% 17.14% 82.86%

9.00 21.92 16.99 12.44 13.19

916,842 1,628,745 2,545,587 11,613,188 14,158,775

6.48% 11.50% 17.98% 82.02%

23.72 21.35 22.19 15.28 16.46

1,043,334 1,595,055 2,638,389 13,038,246 15,676,635

6.66% 10.17% 16.83% 83.17%

13.80 (2.07) 3.65 12.27 10.72


GovernmentOther Than

GovernmentTotal

334,908 487,274 822,182 2,355,297 3,177,479

10.54% 15.34% 25.88% 74.12%

391,614 527,259 918,873 2,615,742 3,534,615

11.08% 14.92% 26.00% 74.00%

16.93 8.21 11.76 11.06 11.24

431,449 549,541 980,990 2,980,738 3,961,728

10.89% 13.87% 24.76% 75.24%

10.17 4.23 6.76 13.95 12.08

485,337 599,020 1,084,357 3,338,318 4,422,675

10.97% 13.54% 24.52% 75.48%

12.49 9.00 10.54 12.00 11.63

491,689 638,518 1,130,207 3,685,323 4,815,530

10.21% 13.26% 23.47% 76.53%

1.31 6.59 4.23 10.39 8.88

514,560 707,374 1,221,934 3,944,604 5,166,538

9.96% 13.69% 23.65% 76.35%

4.65 10.78 8.12 7.04 7.29

552,392 852,921 1,405,313 4,050,306 5,455,619

10.13% 15.63% 25.76% 74.24%

7.35 20.58 15.01 2.68 5.60

675,825 1,019,294 1,695,119 4,260,001 5,955,120

11.35% 17.12% 28.46% 71.54%

22.35 19.51 20.62 5.18 9.16

763,998 936,392 1,700,390 4,492,168 6,192,558

12.34% 15.12% 27.46% 72.54%

13.05 (8.13) 0.31 5.45 3.99


2005 0.40

2006* 0.38

2006* 0.20

2003 0.31

2004 0.35

2003 0.20

2004 0.21

2005 0.22

2002 0.31

1998

1998

2000 0.33

2001 0.32

Ratio (Pbu/Pvt)

0.35

Deposits Distributed by Major Sectors(Nationalized Commercial Banks)

As per June 30

Figures in Lacs of Taka

1999 0.35

Year

Public Sector

Private SectorTotal Deposits

(Pub + Pvt)

2002 0.21

Deposits Distributed by Major Sectors(All Banks)

As per June 30

Figures in Lacs of Taka

2000 0.24

2001 0.23

Ratio (Pbu/Pvt)

0.27

1999 0.26

Public Sector

Year Private SectorTotal Deposits

(Pub + Pvt)



ISBN 978-0-9925622-0-5

22

Appendix G

Appendix H

YearNuber Of

BranchesPopulation

Branches per

'000 PopulationGrowth

1997 5,911 111,455,000 0.0530

1998 5,952 111,455,000 0.0534 0.69%

1999 5,982 111,455,000 0.0537 0.50%

2000 6,056 111,455,000 0.0543 1.24%

2001 6,156 123,151,246 0.0500 -8.00%

2002 6,278 129,250,000 0.0486 -2.83%

2003 6,159 133,400,000 0.0462 -4.95%

2004 6,236 133,400,000 0.0467 1.25%

2005 6,318 135,200,000 0.0467 -0.03%

2006* 6,412 137,000,000 0.0468 0.15%


Branch Per '000 PopulationAs on June 30

YearNuber Of

BranchesPopulation

Population per

BranchGrowth

1997 5,911 111,455,000 18,855.52

1998 5,952 111,455,000 18,725.64 -0.69%

1999 5,982 111,455,000 18,631.73 -0.50%

2000 6,056 111,455,000 18,404.06 -1.22%

2001 6,156 123,151,246 20,005.08 8.70%

2002 6,278 129,250,000 20,587.77 2.91%

2003 6,159 133,400,000 21,659.36 5.21%

2004 6,236 133,400,000 21,391.92 -1.23%

2005 6,318 135,200,000 21,399.18 0.03%

2006* 6,412 137,000,000 21,366.19 -0.15%


Population per BranchAs on June 30



ISBN 978-0-9925622-0-5

23

Appendix I

Year Deposits PopulationPer Capita

DepositGrowth

1997 4,718,936 111,455,000 4233.94

1998 5,200,451 111,455,000 4665.96 10.20%

1999 5,899,412 111,455,000 5293.09 13.44%

2000 7,098,125 111,455,000 6368.60 20.32%

2001 8,165,002 123,151,246 6630.06 4.11%

2002 9,308,394 129,250,000 7201.85 8.62%

2003 10,740,679 133,400,000 8051.48 11.80%

2004 12,157,611 133,400,000 9113.65 13.19%

2005 14,158,775 135,200,000 10472.47 14.91%

2006* 15,676,635 137,000,000 11442.80 9.27%

Per Capita DepositAs on June 30


Source: “Statistical Year Book of Bangladesh”, Bangladesh Bureau of Statistics (1992-2006)



ISBN 978-0-9925622-0-5

24

Dep

osit

sG

DP

bD

epos

its

/

GD

PG

row

thD

epos

its

GD

Pa

Dep

osit

s /

GD

PG

row

thD

epos

its

GD

PD

epos

its

/

GD

PG

row

th

1997

36,4

84.5

1

145,

661

0.

25%

10,7

04.8

5

35,0

40

0.

31%

47,1

89.3

6

18

0,70

1

0.26

%

1998

40,1

04.3

3

162,

047

0.

25%

-1.1

9%11

,900

.18

38

,130

0.31

%2.

16%

52,0

04.5

1

20

0,17

7

0.26

%-0

.52%

1999

45,5

57.9

9

176,

705

0.

26%

4.18

%13

,436

.13

42

,990

0.31

%0.

14%

58,9

94.1

2

21

9,69

5

0.27

%3.

36%

a. R

ural

GD

P =

Agr

icul

tura

l GD

P +

Fore

stry

b. U

rban

GD

P =

Tot

al D

epos

it -

(Agr

icul

tura

l GD

P +

Fore

stry

)

Dep

osit

s to

GD

P R

atio

As

Per

Jun

e 30

Am

onut

s in

Cro

res

of T

aka

Yea

r

Urb

anR

ural

Tot

al

Appendix J



ISBN 978-0-9925622-0-5

25

Appendix K

Year All Banks NCBsSpecialized

Banks

Foreign

Banks

Private Banks

(Including

IBs)

Islamic

Banks*

1992 8.11 7.90 10.48 5.14 8.78 6.93

1993 6.51 6.20 8.52 3.79 7.30 5.69

1994 5.36 5.19 7.44 2.77 5.74 4.65

1995 4.84 4.80 6.50 2.67 4.92 4.38

1996 6.34 6.68 4.89 4.43 5.61 5.43

1997 6.67 6.96 8.73 5.09 5.96 5.89

1998 7.07 7.34 8.88 6.03 6.35 6.28

1999 7.28 7.59 8.95 6.03 6.57 6.47

2000** 7.08 7.44 8.22 4.76 6.72 6.27

2001 7.03 7.27 8.53 4.80 6.81 6.46

2002 6.74 6.80 7.71 4.36 6.87 6.43

2003 6.30 5.79 6.75 4.49 7.18 6.64

2004 5.65 4.88 5.73 4.42 6.66 6.35

2005 5.62 4.63 5.45 3.75 6.83 6.53

2006* 6.26 5.02 5.72 4.16 7.64 7.49

* Weighted Average Rate of Profit

** The Rates are as per September 30, 2000

Weighted Average Rate of Interest on Deposits(By Category of Banks)

As per June 30

Figures in Percentage

savings mobilization behavior of ncbs in … · factors affecting the savings behavior are...

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