Liquidity crisis in banking sector -

Liquidity crisis is the inability of financial institutions to provide its customers with necessary loans in due time according to their needs. It seems that the liquidity crisis in the country's banking sector has intensified.

Due to the ongoing liquidity crisis, customers at present are failing to take loans from banks. If this trend continues, it is not unlikely that the confidence of account-holders with the country's scheduled banks will fall.

Some economists have suggested the following measures to minimise the crisis:

1. Stopping bank loans to the government and also investment in the non-productive sectors.

2. Controlling the rate of inflation.

3. Making the country's share market dynamic and vibrant again.

4. Taking initiatives to stop money from getting siphoned off.

5. Maximising foreign remittances by sending more people to foreign countries for work.

The banking sector is yet to confirm that there is a liquidity crisis. But the notion is more or less clear from the prevailing situation in the country's banking sector. If this is a reality now, the government and the banking sector should try to take some of these steps and other ones to resolve the problem.

Md. Tarek Aziz Bappi

Department of Political Science,

University of Dhaka

tarekazizbappi65@gmail.com