Even the weak banks are not getting rid of the liquidity crisis.
As soon as I entered the First Security Islami Bank branch in Dilkusha, Dhaka, at around 2:15 pm yesterday, I noticed a large crowd of customers in front of the cash counters. Everyone had come to withdraw cash. However, no customer was able to withdraw more than 10,000 taka from this branch.
In this regard, a customer named Sohrab Hossain told our time that customers of this branch can withdraw 5 to 10,000 taka. And customers of other branches are returning checks when they try to withdraw more than 5,000 taka. As I went to the bank manager’s room to talk to him about the matter, I caught sight of a notice that had been hung at the entrance of the manager’s room several days ago. It said that online check payments will be temporarily closed in this branch from November 5 due to unavoidable reasons. Then I went to the manager’s room and found that he was not in the office.
An employee said that he had gone out on some business. Not only First Security Islami Bank, but also Social Islami Bank, Union Bank, Global Islami and National Bank are unable to return the deposit money as per the customers’ demands. Customers are also facing problems in withdrawing the profit money from remittances and savings certificates.
Unpleasant incidents are still happening in some bank branches due to the inability to return the money. That is, despite getting special loans from interbank under the guarantee of the central bank, the liquidity situation of the banks has not improved much. In such a situation, the central bank is considering providing liquidity support to weak banks in crisis through alternative methods. However, a final decision has not been made yet on what that alternative method will be.
In this regard, Bangladesh Bank Executive Director and Spokesperson Husne Ara Shikha said that the central bank has not yet decided to provide support to the banks in the country that are under pressure due to the liquidity crisis through any other method. However, discussions are ongoing with the banks on the matter at the moment. Based on that discussion, the central bank will consider what kind of measures can be taken.
Due to various irregularities and loan fraud, about 12 banks in the country have been in liquidity crisis for the past two years. Of these, 8 banks were under the control of S Alam during Sheikh Hasina’s tenure. Most of them failed to maintain the CRR and SLR of the central bank. Still, former Governor Abdur Rouf Talukder did not take any action against the banks. Later, when these banks fell into further liquidity crisis, they were allowed to conduct transactions despite having a current account deficit.
However, after the fall of the Awami League government, the new Governor Dr. Ahsan H. Mansur stopped all the facilities that were provided. This started to reveal the true financial picture of the banks. In the meantime, the boards of a total of 11 banks, including eight banks under the control of S Alam, have been dissolved. After that, the liquidity crisis of several banks on this list has become more pronounced. As a result, the pressure to withdraw existing deposits from the banks has increased considerably.
Yesterday, before 2 pm, a customer named Yasin Arafat came to the Dilkusha Principal branch of Social Islami Bank to withdraw 30,000 taka. But he was told that it was not possible to withdraw more than 5,000 taka. Yasin Arafat told our time that he is a customer of the Muradnagar branch of this bank in Comilla. He has 12 lakh taka stuck in the bank. At the beginning of the government change, he was able to withdraw 40 to 50 thousand taka every day. Now he does not want to withdraw more than 5,000 taka.
Opposite this bank is the Dilkusha branch of the National Bank. When we went there, we saw that the bank was not very crowded. However, out of the 10 to 12 customers who are inside the bank, eight of them are standing in front of the cash counter with checks. A customer named Dulal who came to this bank told our time that more than 10,000 taka cannot be withdrawn at this branch. However, this 10,000 taka can only be withdrawn by the customers of this branch. No online check payment is available. However, if there is someone known, it can be withdrawn through lobbying.
Bangladesh Bank is providing liquidity assistance under a special system to banks that have become weak due to irregularities and corruption during the Awami League era. In the last one and a half months, seven weak banks have been given special loans of Tk 7,500 crore from the interbank market. Of this, Islami Bank received Tk 2,950 crore, Social Islami Bank Tk 1,175 crore, First Security Islami Tk 1,000 crore, Union Bank Tk 400 crore, Global Islami Tk 295 crore, National Bank Tk 920 crore and Exim Bank Tk 700 crore liquidity. Although it is less than the banks’ needs. As a result, these banks are not able to return the money to the depositors despite receiving assistance. The banks financing the weak banks are Sonali, Mutual Trust, Eastern, Shahjalal Islami, City, BRAC, Pubali, Dhaka and Bengal Commercial Bank.
Follow: greenbanglaonline24
