Cash deposits reach one trillion birr

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Eyob Tekalign, State Minister of Finance (Photo: Anteneh Aklilu)

The deposit mobilization of the country almost reaches the trillion birr mark; thanks to the contribution of cash withdrawal limit directive of the National Bank of Ethiopia (NBE) that shows promising results.
In its third quarter report of the 2019/20 fiscal year, NBE indicated that the total deposit mobilization reached at 989.2 billion birr with over 18 percent increment compared with a year ago similar period.
“Total deposit liabilities of the banking system reached 989.2 billion birr by the end of third quarter of 2019/20, indicating a 18.1 percent annual growth due to branch expansion, improved access to finance, growing saving culture of the public and increasing per capita income,” the report explained.
Eyob Tekalign, State Minister of Finance and Board Member of NBE, told Capital that in nominal terms it is significant. “It shows the way of expanding the GDP, but it does not mean our saving potential is at the maximum limit,” he says adding “our saving capacity is not yet tapped.”
“Cash withdrawal limit directive issued in May shows us the number of unbanked society is very big so the current saving will grow more,” Eyob added.
He added that the NBE directive is a good policy decision to achieve such kind of success besides expanding the digital economy.
Since the country introduced the cash withdrawal limit the number of bank users including public offices increased, according to the State Minister.
The NBE’s cash withdrawal limit directive states that the withdrawal amount for individuals is 200,000 birr per day and one million birr per month. The amount for companies is 300,000 birr per day and 2.5 million birr per month.
In the second quarter of the fiscal year that is from October to December 2019 the total deposit mobilization was 959 billion birr, while the third quarter increased by 3.2 percent compared with the second quarter.
From the total 989.2 billion birr deposit mobilization evaluated from January to March 2020 the saving deposit took the top position and followed by demand deposit.
The demand deposits, which accounted for 35.4 percent of the total deposits, reached 350.2 billion birr showing 24 percent annual increase.
Saving deposits also went up by 19 percent to 550.6 billion birr and accounted for 55.7 percent of the total deposits.
The share of state owned banks in total deposits outstanding was 59 percent while that of private banks was 41 percent.
Currently 18 banks operate in the country including two state owned banks. These banks opened 226 new branches during the review period, raising the total number of bank branches to 6,362 of which 70 percent were that of private banks, according to NBE report.
One branch on average serves 15,848.6 people. About 34.1 percent of the total bank branches are located in Addis Ababa.