Staff Reporter :
Six weak banks have received Tk 1,640 crore in loans to resolve their liquidity crises, provided by three relatively stronger banks. Sonali Bank, Mutual Trust Bank, and Dutch Bangla Bank extended this support to First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, National Bank, and Exim Bank.
The loan distribution is as follows First Security Islami Bank got Tk 375 crore, Social Islami Bank Tk 300 crore, Union Bank Tk 150 crore, Global Islami Bank Tk 95 crore, National Bank PLC Tk 320 crore and Exim Bank PLC Tk 400 crore.
The funds were transferred on Thursday after receiving approval from Bangladesh Bank. Islami Bank has also requested similar liquidity support.
Shahriar Siddiqui, a spokesperson and Director at Bangladesh Bank, told bdnews24.com, “Liquidity assistance has been provided to these banks in response to their requests. This support will be extended to more banks in the future, after their applications are reviewed.”
Since the change in government, issues of irregularities in the banking sector have come to light. The Chattogram-based S Alam Group, in particular, has been accused of embezzling loans from the Islamic banks under its control.
Bangladesh Bank has already appointed administrators at all banks receiving liquidity support. With the exception of Exim Bank, the remaining five banks are controlled by the S Alam Group.
A Bangladesh Bank official stated, “There is a liquidity crisis in several banks. Ten stronger banks have already agreed to provide cash to these weaker banks. We hope that customers will not be left empty-handed.”
There has been a significant shift in the leadership of the financial sector since the student-led mass movement toppled the Awami League government on August 5. A campaign was launched to ‘free’ Islami Bank, and similar campaigns soon spread to other banks.
In response to the protests, Bangladesh Bank Governor Abdur Rouf Tarukder, the Deputy Governor, the head of the Bangladesh Financial Intelligence Unit, and the policy advisor resigned. Ahsan H. Mansur took over as the new Governor of Bangladesh Bank in August. Since taking office, he has ended the illegal transfer of funds from Bangladesh Bank to Sharia-based banks.
This action led to a liquidity crisis in Islamic banks. At one point, customers at First Security Islami Bank were unable to withdraw more than Tk 20,000. Similar situations occurred at Global Islami Bank and Union Bank. Bangladesh Commerce Bank is also facing a liquidity crisis.
Under these circumstances, Governor Mansur approved loans from stronger banks to weaker ones, with ten stronger banks agreeing to provide the necessary funds.