Bangladesh Bank Training Academy Journal

Abstract

Bank deposit, as a proxy of saving, is usually influenced by disposable income (Y). Besides disposable income, interest rate and other economic and noneconomic factors can play an imperative role on deposit movement. However, the nature of deposit mobilization may change in different regions due to political, social and cultural variation. This study examines the determinants of banks' time deposit especially for Bangladesh economy using autoregressive distributed lag (ARDL) model with cointegration techniques and error correction term. The results indicate that the growth of banks' time deposit in Bangladesh is positively influenced by the changes of per capita income, level of financial deepening (measured by domestic credit/gross domestic product) and remittance inflow in long run and if the long run relation is deviated somehow, it will take about 2.18 years to converge to the original integration.