Additional liquidity deposits in the banking sector are one lakh 90 thousand crores

According to the data of Bangladesh Bank, at the end of August this year, 46 public and private banks of the country have excess liquidity, amounting to one lakh 90 thousand 307 crore taka.

Those related to the sector say that due to irregularities and mismanagement, a handful of banks have fallen into financial crisis. They are unable to refund the customer. But beyond this, most banks have excess money lying around. Deposits in good banks are increasing every day. There is no shortage of liquidity in the market. Now some weak banks need financial help. Money is being given on central bank guarantee, the problem will be over soon.

The Awami League government resigned from the post of Prime Minister on August 5 in the face of the unforgettable coup of the students and left the country. Through this, the unprecedented misrule and arbitrariness of the Awami League for almost 16 years came to an end. Then came changes at the highest level in the financial sector. The central bank has already dissolved the board of 11 banks and reorganized it. In such a situation, customers are withdrawing money from many weak banks and depositing it in good banks. Due to this, some banks are unable to pay as much as the demand of the depositors due to the shortage of cash. On the other hand, most of the country's banks have excess liquidity.

When asked, Managing Director (MD) and Chief Executive Officer (CEO) of Eastern Bank, Ali Reza Iftekhar told MoreNews that there is no liquidity problem in most of the country's banks. About 30 to 35 private banks have excess liquidity. Deposits in good banks are increasing. A handful of banks are in trouble, 10 banks with excess liquidity are bailing them out. Which is guaranteed by Bangladesh Bank. We hope that the problems of the troubled banks will be resolved in a few days.

An official of Bangladesh Bank told Morenews that some banks are in trouble due to various irregularities. They need financial support. Now the central bank is not giving money, because inflation is too high. If you put money in the market, it will increase. So weak or troubled banks are asked to lend from strong banks. Because strong banks do not lack liquidity. They have accumulated a lot of extra money. There is a need for assurance of return, so as not to get into trouble with the loan. So the central bank is the guarantor, guaranteeing the repayment of the loan.

S Alam Group took control of eight banks with the help of Bangladesh Bank and an intelligence agency during the Awami League government. These are – Islami Bank Bangladesh, First Security Islami Bank, Al Arafa Islami Bank, Social Islami Bank, Global Islami Bank and Union Bank. Apart from this, they also took control of Bangladesh Commerce Bank and National Bank. These eight banks are suffering from liquidity crisis

As per the rules, banks are required to keep a portion of the deposits as statutory deposit (SLR) with the central bank to safeguard customer deposits. And it has to be saved by buying government treasury bills and bonds. According to central bank policy, Shariah-based banks are required to maintain a 4 percent CRR (Cash Reserve Ratio) of cash with the central bank against total customer deposits with them. Apart from this, 5 and a half percent of the deposit has to be kept as Statutory Deposit (SLR). On the other hand, conventional banks are required to keep 4 percent of total deposits in cash and 13 percent of deposits as bill and bond statutory deposit (SLR). If they fail in these two cases, the banks have to face the penalty of the central bank.

According to the data of Bangladesh Bank, four Shariah-based banks and 42 conventional banks have more money than required as easily exchangeable assets or SLR. Among them, the state-owned Sonali Bank is at the top in saving SLRs. Their additional deposit is Tk 49 thousand 44 crores. Apart from this, there are additional SLR deposits in four other state-owned banks. The banks are – Agrani, Rupali, Janata and BDBL.

The foreign-owned Standard Chartered Bank is second in holding SLRs. Their additional deposit is 16 thousand 169 crores. Bank Asia has additional SLR reserves of Tk 8,619 crore, Pubali Bank Tk 8,534 crore and BRAC Bank Tk 8,244 crore. Apart from this, 7 more banks have additional SLR reserves of Tk 5,000 to 7,000 crore.

Hosne Ara Shikha, executive director and spokesperson of Bangladesh Bank, said that there is no shortage of liquidity in banks. Most banks have money lying around. Some banks are in trouble. Financial assistance has already started to be given to them under the guarantee of Bangladesh Bank. Last week four weak commercial banks were given financial assistance in the form of Tk 945 crore loans. Other weak banks will also get help. Hope this will restore confidence among the depositors. The crisis of troubled banks will be over.

Recently, the Governor met with the Managing Director (MD) of Sabal 10 Bank and their representatives to lend to weak banks against the guarantee of Bangladesh Bank. Ahsan H. Mansoor. The banks are - state-owned Sonali Bank, private sector BRAC, Eastern, City, Shahjalal Islami, Mutual Trust, Pubali, Dhaka, Dutch-Bangla and Bank Asia.

Seven distressed banks sought liquidity assistance of around Tk 29,000 crore to turn around. Among them Islami Bank 5000 crore, First Security Islami Bank 7900 crore, Social Islami Bank 2000 crore, Union Bank 1500 crore, Global Islami Bank 3500 crore, National Bank 5000 crore and Exim Bank 4000 crore. Need money help.

Five banks have already signed agreements with Bangladesh Bank to receive support. These are the private sector National, Social Islami, First Security Islami, Union and Global Islami banks.

S Alam Group took control of eight banks with the help of Bangladesh Bank and an intelligence agency during the Awami League government. These are – Islami Bank Bangladesh, First Security Islami Bank, Al Arafa Islami Bank, Social Islami Bank, Global Islami Bank and Union Bank. Apart from this, they also took control of Bangladesh Commerce Bank and National Bank. These eight banks are suffering from liquidity crisis. However, the situation of six of these banks has reached such a level that many of their branches do not have cash to carry out transactions. Branch officers are under pressure from depositors.

When Sheikh Hasina's government was overthrown in the popular uprising of students on August 5, the board of directors of the banks was dissolved and reorganized. Among them, the central bank dissolved the board of 11 banks, including eight under the control of S. Alam. The other three banks whose board has been reconstituted are IFIC, UCB and EXIM Bank. Among them, former prime minister Sheikh Hasina's private industry and investment advisor Salman F. Rahman was in possession of IFIC Bank, former land minister Saifuzzaman Chowdhury and his family controlled United Commercial Bank.

Apart from this, Exim Bank was occupied by Nazrul Islam Majumdar, former chairman of Bangladesh Association of Banks (BAB), an organization of influential businessmen and entrepreneurs and directors of private banks.