Call money market overheated ahead of Eid

Staff Correspondent : Commercial banks are increasing their borrowing levels to cope with the liquidity crunch. At the beginning of this month, on Monday, the commercial banks borrowed Tk 25,006.45 crore from the central bank under special liquidity support. On the same day, call money borrowed Tk 2,200 crores from the market. One bank has borrowed another Tk 300 crore from another bank under short- and medium-term instruments. All together, the banks have borrowed Tk 27,506 crores on this day.
Meanwhile, on Tuesday, banks borrowed Tk 4,646 crore from other banks under the call market, short and long-term instruments. Of this, call money has taken Tk 3,823 crores from the market. The remaining Tk 823 crore has been taken under short and long term loans.

Liquidity pressure has increased in banks in recent times. The demand for cash in banks has increased especially during fasting and Eid. Customers are withdrawing money from the bank to meet the additional expenses. In addition, cash is getting stuck while buying dollars from the central bank to repay the foreign debt. Besides, the loan disbursement from the banks increased more, but the deposits increased less. Less money is being collected from disbursed loans. Due to these reasons liquidity crisis is increasing in banks.
According to the report of the Central Bank, the liquidity in the banks was Tk 4 lakh 39 thousand crores in July. In January, it decreased to Tk 4 lakh 24 thousand crores. In the last 7 months, liquidity has decreased by Tk 15 thousand crores. Earlier liquidity was increasing in banks.
Meanwhile, on Wednesday, commercial banks borrowed Tk 28,867.14 crore from the central bank under special liquidity support. Which is marked as maximum loan in one day. Earlier last year, the central bank borrowed a maximum of Tk 26 thousand crore from the central bank in a single day. Borrowed Tk 25 thousand crore on Monday.
Banks are supposed to have a portion of their total liquidity in the form of cash to carry out their day-to-day operations. But many banks are unable to keep it. As a result, banks are now borrowing. Borrowing from banks and markets is a regular thing, but borrowing from the central bank and short and long-term borrowing from other commercial banks is not a normal occurrence. But the banks are now relying on this loan.