Dozens of banks fell into deep crisis due to unlimited looting during the Awami League period. During the time of Governor Abdur Rauf Talukder, Bangladesh Bank provided money by overprinting to keep these banks alive. After the fall of the Sheikh Hasina government in a student uprising, the new governor promised not to provide liquidity to banks by printing money. But he could not keep that promise for long. Bangladesh Bank has started helping weak banks by printing money again. Related sources say that the Central Bank has provided Tk 22,500 crore from the vault to the banks last Monday and Tuesday.
The governor also admitted to helping weak banks by printing money. Ahsan H. Mansoor. In a press conference organized by Bangladesh Bank on Thursday, he said that financial assistance will be provided as needed to restore the confidence of customers of weak banks.
The governor said, 'Though initially the policy of refraining from printing money was adopted, but in the current situation this position has been temporarily withdrawn. Does the human condition change? Issuing bonds to supply money; But the monitoring policy remains as tight as before. There is no net money creation in this process. On one side is being assisted, on the other is being raised through bonds. This assistance will be provided according to the customer's needs. I have to protect both depositors and inflation.'
The previous government also helped by printing money, and it is still being given, now what is the difference? In response to such questions, the governor said that money is no longer being stolen from the bank. The money has flown out after the aid was overprinted earlier. But now accountability is being ensured. Earlier assistance was given to the banks but there was no improvement. But there has been a fundamental change here. The board of the bank has changed. Banks are being monitored.
Bangladesh Bank has provided liquidity assistance to the private sector National Bank, Exim Bank, Social Islami Bank, First Security Islami and Union Bank, which were suffering from liquidity crisis mainly during the Awami League government period.
According to sources, First Security Islami Bank (FSIBL) has received liquidity assistance of Tk 7,900 crore from the Central Bank on Monday.
National Bank has taken assistance of 7.5 thousand crore rupees. Three other banks have taken about 6 thousand crore rupees.
A deputy governor said on condition of anonymity, Bangladesh Bank Governor Dr. Ahsan H. Mansoor. Later, the governor held a separate meeting with the chairman-MDs of each bank. The governor gave an idea about the amount of financial assistance that will be given to a bank. In all, the weak banks have given a demand of 70 thousand crore rupees. The central bank will give Rs. And to control inflation, the central bank will withdraw money from banks through bills and bonds. And if the World Bank, IMF and any donor agencies raise questions about the aid by printing money for loan waiver conditions, it will be explained.
National Bank Chairman Abdul Awal Mintu confirmed the meeting with the Governor regarding the liquidity support of the banks. He said, liquidity support has been re-introduced to restore customer confidence.
According to sources, after August 5, banks were not agreeing to open S Alam Group's LC. In such a situation, the governor also instructed the banks to open LCs of edible oil, sugar and flour companies owned by S Alam Group to ensure the import of daily necessities before Ramadan.
At least 12 banks, including the discussed five banks, are in extreme liquidity crisis due to various loan frauds and irregularities during the Awami era. Eight of these banks were previously owned by the controversial conglomerate S Alam Group. Despite these irregularities, Bangladesh Bank Governor Abdur Rauf Talukder during Sheikh Hasina's tenure did not take any action against these institutions. In this situation, the liquidity crunch takes a deeper form; But despite the current account deficit of these banks, the aid was approved in violation of the Central Bank's regulation.
However, on August 20, new governor Ahsan H. Mansoor said in response to a question from reporters, that weak and troubled banks will not be given assistance by printing money. No solution can be found by printing money for the bank. But Bangladesh Bank could not keep that promise.
