According to government figures, the country’s GDP growth in FY 2024-25 was 3.97 percent. Along with growth, the size of the economy expanded, and per capita income also increased. During the same period, remittance inflows grew by nearly 27 percent, while exports posted close to 8 percent growth. Imports also followed a growth trend. Yet, despite these positive indicators, money transactions in the banking sector declined. Data from the Bangladesh Bank shows that compared with FY 2023-24, transactions in banks fell by 0.72 percent in FY 2024–25. In terms of volume, transactions were lower by BDT 933.54 billion.

Economists and bank officials say that as time progresses and the economy expands, the volume of transactions through banks should also increase. But instead of rising, transactions through the formal banking channel went down, which they note does not align with the rules of economics. A decline in banking transactions could mean that either the economy has contracted or the informal economy has become more active.

According to Bangladesh Bank data, total transactions in the country’s banking sector stood at BDT 129.29 trillion in FY 2024–25. In FY 2023–24, transactions amounted to BDT 130.22 trillion. This means that transactions dropped by BDT 933.54 billion, or 0.72 percent, in FY 2024-25. In contrast, compared with FY 2022–23, banking transactions in 2023–24 had increased by 8.54 percent. The calculation of transactions includes checks, real-time gross settlement (RTGS), electronic fund transfer (EFT), debit and credit cards, internet banking, agent banking, and mobile financial services (MFS).

The slowdown in economic activity has led to a decline in banking transactions, according to Dr. Fahmida Khatun, Executive Director of the Center for Policy Dialogue (CPD). Speaking to Bonik Barta, she said, “High inflation has left middle- and low-income households struggling for a long time. They no longer have any savings left. Credit growth in the private sector is in a dire state. New jobs are not being created. In such circumstances, it is only natural that banking transactions among ordinary people would fall.”

Dr. Fahmida Khatun added that the liquidity crisis in weak banks has deepened the problem. “People are going to withdraw BDT 20,000 but are coming back with only BDT 5,000. Many are even leaving banks empty-handed. This has eroded public trust in the banking sector. In such situation, informal transactions tend to rise. But there is no way to know exactly how much informal activity has grown. To overcome the current stagnation, investment must be boosted. Political stability also needs to return quickly.”

According to provisional estimates from the Bangladesh Bureau of Statistics (BBS), GDP growth stood at 3.97 percent in FY 2024–25. The country’s nominal GDP expanded from $450 billion to $462 billion. Per capita income rose to $2,820, the highest on record.

At the same time, remittance inflows reached a historic $30.33 billion, a 26.83 percent increase from FY 2023-24, according to central bank data. Exports grew by 7.72 percent, while imports rose by 2.44 percent. Yet, despite these positive indicators, the momentum did not translate into banking transactions.

Bangladesh Bank data show that in FY 2024–25, transactions through checks, RTGS, debit cards, and agent banking decreased. At the same time, transactions through EFT, credit cards, internet banking, and mobile banking increased. Among these, transactions by check saw the steepest decline, dropping by 19.33 percent. In contrast, mobile banking recorded the highest growth, rising by 18.31 percent.

Despite advances in technology, the country’s banking transactions still rely heavily on checks. According to the central bank, transactions through checks totaled over BDT 24.16 trillion in FY 2023–24. That figure fell to BDT 19.49 trillion in FY 2024–25. This means check transactions dropped by BDT 4.67 trillion, a decline of more than 19 percent. Debit card transactions also decreased by 2.84 percent. In FY 2023–24, transactions through debit cards stood at BDT 4.97 trillion, but in the following year, they declined to BDT 4.82 trillion.

RTGS remains in place for large-scale transactions in the banking sector. Instead of withdrawing large sums in cash from one bank and depositing them into another, people now transfer money through RTGS. Along with domestic transfers, foreign currency transactions can also be conducted via RTGS. The central bank data show that RTGS transactions fell in FY 2024–25 when transactions through this system amounted to BDT 57.98 trillion. Compared with BDT 58.37 trillion in FY 2023–24, this reflects a decline of 0.68 percent.

Agent banking was launched to bring the country’s marginalized populations into the financial system. Since its introduction in 2013, both the coverage and transaction volume of this specialized banking service had been growing. However, due to various negative incidents in the banking sector, public trust in agents has shown cracks. In FY 2023–24, transactions through agents amounted to over BDT 8.32 trillion, but in FY 2024-25, that figure fell to BDT 7.85 trillion, a decrease of 5.69 percent.

Instead of cash transactions, people have increasingly turned to technology-driven EFT and internet banking. In FY 2024-25, EFT transactions totaled BDT 9.05 trillion, while internet banking transactions reached BDT 11.51 trillion. The growth rates in these two areas were 2.48 percent and 16.99 percent, respectively. While debit card usage declined, credit card transactions rose by 12.17 percent. In FY 2024–25, transactions through credit cards amounted to BDT 385.88 billion.

The impact of economic stagnation is evident in the banking transaction statistics, according to Mosleh Uddin Ahmed, Managing Director of Shahjalal Islami Bank. Speaking to Bonik Barta, he said, “Loan growth in the country’s private sector has fallen to 6.5 percent. Loans disbursed by banks are also not being repaid. The rate of non-performing loans has exceeded 25 percent. There is a certain stagnation in economic activity. These factors have contributed to the decline in bank transactions.”

Even as transactions through traditional banking channels have declined, mobile financial services (MFS) have seen significant growth. Monthly transactions through MFS or mobile banking now exceed BDT 1.5 trillion. In FY 2024–25, transactions through this mobile-based channel totaled BDT 18.17 trillion, an increase of 18.31 percent compared to the previous fiscal year.

Syed Mahbubur Rahman, Managing Director of Mutual Trust Bank, said that informal or cash-based transactions have increased due to negative publicity surrounding the banking sector. He told Bonik Barta, “The situation in some banks is fragile. Confidence in this sector has declined because people do not receive their money as needed. We are seeing that the amount of notes issued by the central bank and those held outside banks is increasing. People are relying more on cash for transactions.”

Syed Mahbubur Rahman added, “The state of economic activity in the country is not good. There is practically no new employment. If remittance and export growth do not continue, the situation of transactions in the banking sector would look even worse.”