Mahfuz Emran: In this period of high inflation, people’s saving power has decreased. Due to lack of trust, many are withdrawing money from the bank and keeping it in their hands. Again, against the sale of dollars from the reserve, market money is coming up. All in all, the banking sector is in extreme liquidity crisis. Many banks meet daily expenses by lending. Till last Monday, the borrowing amount of the banks from the central bank and interbank stood at Tk 67,080 crores. Of this, Tk 53,194 crores were borrowed from the central bank. There has never been a precedent for borrowing so much before.
Those concerned said that this situation of the entire banking sector has been created due to a few banks. Generally, if the credit demand increases in the private sector, the banking sector faces a liquidity crisis. Now due to lack of investment demand, private sector credit growth is around 10 percent. However, various frauds and lack of trust are the main causes of liquidity crisis in the banking sector. Due to lack of trust, customers of some banks withdraw money from their account and keep it with themselves. Many are buying dollars and keeping them at home instead of keeping money in the bank. People’s saving power has also decreased. Again, selling from reserves continues to meet the long-standing dollar crisis. About Tk 65 thousand crore have come up against the sale of $5.9 billion to various banks so far, this financial year.
In this context, the executive director of the Policy Research Institute (PRI) Ahsan H. Mansoor told Daily Industry that the central bank has stopped giving direct loans to the government, citing inflation control. But the effect of lending to commercial banks in this way is the same in inflation. It is also like providing money by printing money from the central bank. He said, this situation has been created due to some banks. It is not right to give liquidity support like this without taking strict action against them. Bangladesh Bank is giving them liquidity, but not punishing them. Not even questioning where the money is going. If you want to fix the banking sector, you have to stop them. He said that the main problem of banks in crisis is good governance. The board of these banks should be dissolved and reorganized. Plan how to improve the situation. Then the issue of not providing liquidity as needed should be looked at.
Every bank has a current account with Bangladesh Bank. Against this account, banks settle various payments including maintenance of cash statutory deposits (CRR) and check clearing from one bank to another. At present, five Shariah-based banks have emptied Bangladesh Bank’s accounts, let alone maintaining CRR and statutory liquidity (SLR). On the contrary, a report has emerged that the central bank owed Tk 3,491 crore to these banks till last September. Generally, after a bank goes into this state, the bank’s check clearing should be stopped. However, check clearing continues at the Central Bank’s special facility. These banks are also giving new loans. Although this is the case now due to various reasons, at one time only Islami Bank Bangladesh had a surplus of Tk 15 to 20 thousand crores. If someone was in crisis, he would borrow from them.
According to the data of Bangladesh Bank, the banks are borrowing Tk 15 to Tk 20 thousand crore every day for different tenures. On Monday, various banks took Tk 15,120 crore from Bangladesh Bank. Among them, 15 banks have taken a one-day term loan of Tk 7,085 crores. 20 banks and two financial institutions borrowed Tk 7,550 crores for seven days. And three Shariah-based banks borrowed Tk 485 crores for 14 days. In total, last Monday, the loan status stood at Tk 53,194 crores. Apart from one day term loan, three-day term loan was Tk 24 crore. Seven-day term loan is Tk 38,232 crores. 14-day term loan status of Shariah-based banks is Tk 7,853 crores.
Those concerned said that on Monday, one bank borrowed Tk 4,595 crores from another bank for various periods including inter-bank loans. Out of this, the amount of borrowing in one-day term loans at an average interest rate of 8.54 percent was Tk 3,965 crores. The rest was borrowed in different terms. In all, the debt status was Tk 13,886 crores.
To borrow from the central bank, banks have to pledge various instruments like treasury bills, bonds. Since Shariah-based banks cannot buy interest-bearing bills and bonds, these banks have less borrowing facilities. What was left for the five troubled banks has already ended. As a result, now they are not getting loans except through special means.
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