Bangladesh, July 28 -- Scheduled banks now seem to be in a quandary with excess liquidity buildup following deposit resurgence and weak loan demand amid prolonged economic slowdown, bankers say.

Amid various regulatory moves and deposit-mobilising drives by the country's banks, people's trust in the once-shaken banking sector started improving. As a matter of fact, the deposit growth keeps rising, which basically helps boost their stock of excess liquidity.

But such liquidity buildup fails to lighten up mood of the bankers because the demand for private-sector credit has fallen to a record low. On the other hand, yields on government securities have not risen apace with abundance of liquidity in the banking system.

As a result, banks ...