Seven banks have so far received Tk 65.85 billion in liquidity support from 10 affluent banks and the cash feeding under the regulator-underwritten guarantee scheme will continue, officials said.
"Such liquidity support will be continued in the coming days," spokesperson for the Bangladesh Bank (BB) Husne Ara Shikha told the FE Thursday, without elaborating.
Earlier, some cash-hungry banks had sought liquidity support from the central bank immediately to mitigate their ongoing crisis.
Some of them have already obtained a central-bank guarantee to avail liquidity support from the interbank money market.
As part of the arrangement, Islami Bank received Tk 20.96 billion, Social Islami Bank Tk 11.75 billion, First Security Islami Bank Tk 10 billion, National Bank Tk 9.20 billion, Exim Bank Tk 7.0 billion, Union Bank Tk 4.0 billion, and Global Islami Bank Tk 2.95 billion from 10 well-off banks.
Currently, a section of banks has faced difficulties in handling the customers rushing to withdraw their money out of heightened panic, which ultimately further accentuates their woes, bankers said.
Massive loan irregularities and mismanagement in the banking sector during the recently deposed Awami League government have left the banks in a vulnerable situation, they explained.
On the other hand, Sonali Bank provided Tk 30 billion, City Bank Tk 12.95 billion, Pubali Bank Tk 5.0 billion, Shahjalal Islami Bank Tk 4.0 billion, Dutch-Bangla Bank Tk 4.0 billion, BRAC Bank Tk 3.0 billion, Dhaka Bank Tk 2.50 billion, Mutual Trust Bank Tk 2.20 billion, Eastern Bank Tk 2.0 billion and Bengal Commercial Bank Tk 200 million to the financially weak banks.
Officials, however, says affluent banks have provided only Tk 10 billion to the troubled banks after a fresh instruction issued by Bangladesh Bank Governor Dr Ahsan H. Mansur on November 11.
That day, the central bank governor asked 17 well-off banks to extend their liquidity support to cash-seeking banks for ensuring stability in the country's banking system.
Earlier, seven crisis-hit banks had received Tk 55.85 billion as liquidity from nine well-off banks, according to the BB officials.
The central bank has already imposed nine conditions, like liquidity support will be maximum for one year on three-month basis, interest rate will be fixed at 11.50 per cent, equivalent to the existing level of special liquidity facility (SLF) rate, in the agreements with the banks in need of cash support.
In the event of failure to repay by the crisis-hit banks, the liquidity- providing banks can create 90-day tenure of forced loans in the name of the borrowing banks.
"An additional 2.0-percent interest or profit will be imposed on the SLF rate if the loans are not repaid on time," the credit deal reads.
If the BB fails to recover funds from the borrowers' current accounts, it will recover cash by selling off the banks' permanent assets, bonds and other securities.
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