It is alleged that billions of rupees were looted from various banks with the help of the central bank during the previous government. The former governor who assisted in the robbery. Atiur Rahman, Fazle Kabir and Abdur Rauf Talukder – these three people have given gadhaka. But now the banks are paying for it. The customers of the bank are giving losses. Two months have passed since the appointment of the new governor of the central bank, but people's confidence in the bank has not yet returned. Many customers are not able to withdraw money as required from the bank. Due to not being able to withdraw their money from the bank, there is pent-up anger and dissatisfaction among the customers.
On the other hand, private sector entrepreneurs are unable to take loans from banks due to acute liquidity crisis. Due to disruption of production, there has been stagnation in business and trade. The liquidity crisis has already reduced the amount of credit for the import of capital equipment. Even many private companies are now unable to pay their employees. In such a situation, the central bank has once again increased the policy interest rate. This will further increase the loan interest.
Traders are worried about this latest initiative of the central bank. They argue that if the interest on loans increases, their business operations will be under pressure. Besides, you may have to withdraw from new investment plans.
Bangladesh Bank increased the policy interest rate by 50 basis points to 10 percent. This is the fifth time this year and the third time during the tenure of Governor Ahsan H. Mansoor that the policy rate has been increased. It is also called repo rate.
Basically, the interest rate at which commercial banks borrow from Bangladesh Bank is called repo rate or policy interest rate. It should be noted here that this is the first time that the policy interest rate has exceeded the rate of inflation.
As a result, interest rates on deposits have increased. But still banks are not able to collect money as per demand. And due to lack of money, several banks are not able to pay their customers. Customers from weak and sharia-based banks are not getting the money they need when they withdraw their money—in addition, for the past two months, when they visit a bank booth, they are told there is no money. Some online transactions are also closed. Many are also worried about the collected money. Unpleasant incidents are also happening in bank branches in different areas of the country. They were also seen blocking the road without getting money. Many people are unable to withdraw money from the bank even after waiting for the last two months. In such a context, many have given up saving money. People have reduced the amount of money they keep in banks, especially due to political changes. Besides, the failure of some banks has reduced the confidence of the people in the banking sector. As a result, the amount of cash in the hands of people outside the banking sector is increasing.
Economists say that the interim government has already taken various initiatives to reform the banking sector. However, it is not only limited to reforms, but also work to keep the trust of bank customers or depositors intact. Initiatives should be taken first so that people approach the bank with confidence.
According to the data of Bangladesh Bank, cash outside the bank was Tk 2 thousand crore more in July compared to June this year. In July, the amount of cash outside the banks was Tk 2 lakh 91 thousand crores. This trend continued in August as well and the amount of cash outside the bank increased consistently for 9 consecutive months.
According to the central bank, deposits have not increased in the first two months of the current fiscal year 2024-25, but have decreased by about 11 thousand crores. In the recent past, there has been no precedent of such a decrease in deposits in the banking sector. Bankers say that many customers are not interested in depositing money in banks even though the banks give high interest rates on deposits.
In this context, Syed Mahbubur Rahman, Managing Director of Private Mutual Trust Bank, told Bangla Tribune that it is important to restore people's trust in the bank. If customers or depositors lose confidence, the banking sector may face disaster. He said, 'If people keep cash with themselves like this, the liquidity crisis of weak banks will increase. This may increase the interest rate of deposits and loans.
According to the data of the central bank, in November 2023, 2 lakh 48 thousand crore rupees were out of the bank. From December next month i.e. a month before the national elections till August this year, the trend of increasing the amount of cash outside the banks continues. According to the central bank, from November 2023 to August this year, the amount of money outside the banks has increased by 17 percent or Tk 44 thousand crore. From this time there was a cash crisis in the banks and there was instability in the dollar market. Especially after the fall of the Sheikh Hasina government on August 5, politicians, businessmen and officials of various classes started withdrawing more and more money from the bank. This creates a liquidity crisis in banks. The central bank limits the withdrawal of money under compulsion. In the beginning, Bangladesh Bank issued instructions that no more than one lakh taka can be withdrawn. Then maximum two lakh, next week maximum three lakh, next week four lakh and last instruction allows to withdraw 5 lakh per week central bank. It has been seen that customers could not withdraw money as per demand from any bank for more than one month. However, even though the limit set by the central bank has been lifted since September 8, Shariah-based banks are still unable to pay according to the demands of their customers.
Dr. August 13 this year. After Ahsan H. Mansoor was appointed as the governor of Bangladesh Bank, the boards of 11 banks including 8 banks under the control of S. Alam were dissolved. This also does not benefit the customers much. Although the volatility in the foreign exchange market has eased, several banks are suffering from liquidity crisis.
However, Bangladesh Bank has formed a task force to reform the banking sector. Six people experienced in the financial sector have been appointed as members.
A few days ago, the governor of the central bank urged customers to be patient in an event. Ahsan H. Mansoor. He advised not to withdraw all the money from the bank together, but to withdraw only that much. He is currently in the US capital Washington to attend the annual meetings of the International Monetary Fund (IMF) and the World Bank.
Customers surrounded Chandpur Social Islami Bank and locked it on Tuesday (October 22) without getting money. It is known that the number of customers of Social Islami Bank Limited Chandpur district branch is 22 thousand. But the bank can pay 100 customers. Meanwhile, on Monday (October 21), the customers protested by blocking the highway after not getting money at the branch of National Bank of Ghazaria Upazila of Munshiganj. Around 3 o'clock on this day, hundreds of customers held this program at Bhaberchar bus stand area of ​​Dhaka-Chittagong highway.
Traffic was blocked for half an hour as customers blocked the highway. The statement of local customers is that customers who have saved money in National Bank have been harassed for the past three months to withdraw their money. The bank is not giving money to anyone on demand. Apart from this, many customers wait at the bank almost every day from 10 am to 5 pm and return home empty handed without getting money.
There has been an incident of customer's check being returned due to cash shortage at Chouddagram branch of National Bank, Comilla. From the morning of October 10, the customers could not withdraw even 10,000 taka in a check. Many customers left angry.
A customer named Sahida first gave a 40,000 check and then a 10,000 check and tore up the two checks in front of the officials in anger after not getting the money. Currently, the number of customers of this branch is more than 30 thousand.
Several customers have said that they have not been able to come to the bank for two weeks and withdraw money. When you come to the bank, they say come next week and it will be fixed.
Customers complain that most of the banks are running short of money. Although the central bank has taken various initiatives to overcome the crisis, there is no lack of irony of customers. In such a situation there is a negative impact on banks and financial institutions.
Meanwhile, expatriates are in trouble even after sending remittances. Social Islami Bank is unable to collect remittance money. Desperate, many are sending money to illegal channels.
Meanwhile, First Security Islami Bank is also not able to pay the customer as per the demand. Last Sunday (October 20), several customers were unable to withdraw the Tk 3 lakh check at the Rampura branch. It was informed from the cash counter that it is not possible to pay 1 lakh in cash.
Customers have expressed dissatisfaction with First Security Islami Bank and several Shariah-based banks, but they could not withdraw money as required for the whole of last week.
A customer of Islami Bank in Chandpur Sadar Upazila also made the same complaint. He said that he is not able to withdraw the required money. As a result, his urgent tasks were blocked.
There is no money in any ATM booth of Islami Bank, Social Islami Bank, First Security Bank, Bangladesh Commerce Bank, Al Arafah Bank in Dilkusha area of ​​the capital. Besides, the same picture was seen in other areas of the capital. Booth workers said that most of the booths have not been given money since S Alam lost control. After investigation, it is known that the banks which were under the control of banking sector mafia S. Alam, have faced extreme liquidity crisis.
In this context, Bangladesh Bank's Executive Director and Spokesperson Husne Ara Shikha told Bangla Tribune, 'Bangladesh Bank is trying its best to regain the trust of the customers. However, if the tendency of all people to eat together continues, no matter how much money is given to the bank, the bank will not be able to handle the pressure of so many people.
However, Bangladesh Bank has recently taken the initiative of providing loan assistance to some weak banks to overcome the liquidity crisis. The central bank of the country, Bangladesh Bank Bank, is providing liquidity guarantees to banks weakened due to various irregularities including loan fraud. So far 6 banks have received central bank guarantee of about 5 thousand crore rupees in the last one month. Out of this, Islami Bank Bangladesh Limited received Tk 1,495 crore, Social Islami Bank got Tk 1,000 crore, Global Islami Tk 295 crore, First Security Islami Bank Tk 775 crore, Union Bank Tk 150 crore and National Bank got Tk 820 crore.
Sonali Bank, Dutch Bangla Bank, Eastern Bank, City Bank and Mutual Trust Bank have given liquidity facilities to these banks which are in liquidity crisis.
According to Central Bank data, on Tuesday (October 22), 4 banks received Central Bank guarantee facilities of Tk 875 crore. Out of this, Islami Bank got Tk 695 crore, Social Islami Bank Tk 100 crore, Global Islami Bank Tk 50 crore and First Security Islami Bank got Tk 25 crore.
