The effect of high inflation on deposit sector: a study on Pubali Bank PLC GB (general banking) sector

Abstract

This paper examines the effect of high inflation on the deposit sector of Pubali Bank PLC in Bangladesh by using secondary data of 2020-2024. The study examines the impact of inflation, deposit growth and depositor behavior using descriptive statistics, correlation, regression and t-test. The nominal value of deposits and the inflation rate both rose from 11% to 20%. However, real growth rate of deposits was limited because of the disappearance of value for the depositor. Depositors started rolling their funds in term deposits structured, with time-bound returns but reduced the proportion of current deposits and savings deposits held their shares but both in real and structural terms. Comparative study between low and high inflation is supported by statistical test (p = 0.0228) and finds that inflation significantly changes the depositors’ behaviour. The research underscores the need for inflation-sensitive banking policies and the creation of instruments that preserve real returns, preserving depositor confidence and financial stability.