Individual investment in government Treasury bills and bonds increased more than sevenfold over the two years ending in June 2025, reflecting a clear shift toward risk-free instruments amid high interest rates, limited investment options, and growing economic uncertainty.
According to Bangladesh Bank data, individual holdings rose to Tk聽7,941 crore in June 2025 from Tk聽3,850 crore in June 2024 and Tk聽1,102 crore in June, 2023.
The share of individual investors in total holdings also climbed to 1.23 per cent from 0.3 per cent over the same period.
This growing interest is part of a broader transformation in the investment landscape.
Just two years ago, investors beyond banks and financial institutions played a negligible role in the government securities market.
By June 2025, however, investments from individuals, corporate entities, provident funds, and pension funds reached Tk聽1.14 lakh crore 鈥� rising nearly fivefold from Tk聽23,115 crore in June 2023.
The institutions now hold 16.46 per cent of total T-bill and bond investments, up from just 7.46 per cent two years earlier, while the share held by banks and other financial institutions declined from around 92 per cent to 83.54 per cent.
This shift has been driven largely by the appeal of government securities鈥� high and tax-free returns, which have outperformed bank deposit rates, bankers said.
In June, yields on Treasury instruments ranged between 11 and 13 per cent, significantly higher than the 8鈥�10 per cent offered on term deposits.
At the same time, many banks have struggled to return deposits on time, further eroding public confidence in the traditional banking system, they said.
The persistent underperformance of the stock market, coupled with reduced investment activity in national savings certificates (NSCs), has also contributed to the trend, they added.
Investment in NSCs fell by Tk 6,063 crore in FY25 to Tk 3.38 lakh crore, following a drop of Tk 21,124 crore in the previous fiscal year.
With fewer attractive and reliable alternatives, individual and institutional investors have increasingly turned to treasury bills and bonds as their preferred vehicle for parking funds safely, experts said.
As of June 2025, the total outstanding investment in government securities stood at Tk 6.45 lakh crore.
Of this, Tk 1.06 lakh crore came from outside the banking and financial sector, up from Tk 38,397 crore in June 2024 and Tk 22,012 crore in June 2023.聽 Bank officials confirm that a large portion of this surge came from funds previously held in bank deposits or NSCs.
Treasury bills and bonds are seen as not only safer, but also more flexible, with no investment cap, tax exemption at source, and the option for resale on the secondary market.
The government鈥檚 borrowing strategy has also influenced the market.
In FY25, it borrowed Tk 1.36 lakh crore from commercial banks and repaid Tk 63,997 crore to the central bank, resulting in net borrowing of Tk聽72,372 crore.
With demand for private sector credit weakening amid political and economic uncertainty, banks are increasingly parking their funds in government securities, favoring safety and consistent returns over lending risks.
