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to 68 percent of the nation’s population, has been higher than in urban areas for most months since July, 2022.

During the July-September quarter of this year, inflation has been consistently higher in rural areas than in urban areas.

The trend continued into November, when consumer prices rose 9.62 percent in village areas whereas inflation in urban areas stood at 9.16 percent.

The BB data showed that loans and advances to businesses and other borrowers declined in July-September quarter of 2023 from the same period a year ago.

Syed Mahbubur Rahman, managing director and CRO of Mutual Trust Bank Ltd, said income opportunity in general is limited in suburban areas. It has reduced further owing to the slowing of the economy, he said.

The BB data showed that loans and advances to businesses and other borrowers declined 18.5 percent in the July-September quarter of 2023 from the same period a year ago.

“It seems that many people are withdrawing their savings to cope with the rising cost of living,” he said, adding that many people in cities are better off.

“Disparity is rising.”

The central bank data showed that despite the fall in deposit flow from rural areas, overall savings grew 9 percent year on year, to Tk 1,713,134 crore, at the end of September this year compared to a year ago, thanks to a surge in deposit flow in banks from urbanities.

Total deposits in urban areas surged 18 percent to Tk 1,453,264 crore at the end of September this year from Tk 1,234,703 crore a year ago.

Towfiqul Islam Khan, senior research fellow of the Centre for Policy Dialogue (CPD), said the removal of the cap on the lending rate and the introduction of Six Months Moving Average Rate of Treasury bills led to a spike in overall interest rates in the financial sector.

“But there is definitely an impact of high inflation on savings,” he said, citing rural deposit flow.

“Both farm and non-farm activities might have been affected. Activities of Small and Medium Enterprises (SMEs) have also been affected,” he said.

Another reason, Khan said, might be the saturation of agent banking and mobile financial services.

Md Abdul Jabber, managing director & CEO of Janata Bank, however, said the state bank attracted increased deposits in the July-September period of this year. “We had carried out special campaign in rural areas,” he said.

Md Mahiul Islam, deputy managing director & head of retail banking at BRAC Bank, said the private bank too recorded growth in deposit flow as it took a number of initiatives.