Five
struggling banks have received liquidity support of BDT 10 billion from six
relatively stronger banks, secured against a guarantee from the Bangladesh
Bank. The banks benefiting from this loan assistance are First Security Islami
Bank, Social Islami Bank, Global Islami Bank, National Bank, and Union Bank. Bangladesh Bank’s Executive Director and Spokesperson Husne Ara Shikha confirmed this on Wednesday (October 2).
According
to sources, First Security Islami Bank secured a BDT 3 billion loan from City
Bank, Dutch-Bangla Bank, and Mutual Trust Bank. Similarly, Social Islami Bank
received nearly BDT 3 billion in loans from City Bank and Mutual Trust Bank.
Meanwhile,
National Bank received liquidity support from Bengal Commercial Bank, Mutual
Trust Bank, and City Bank. Global Islami Bank secured loans according to its
demand from Eastern Bank, Mutual Trust Bank, and Dutch-Bangla Bank. Additionally,
Union Bank received BDT 3.5 billion in liquidity support from Sonali Bank.
In
August, following the formation of the interim government, Dr. Ahsan H. Mansur
assumed the role of the Governor of Bangladesh Bank. As a first step in
reforming and restructuring the banking sector, the boards of directors of 11
troubled banks were dissolved. This led to widespread customer concern,
causing a rush at bank branches as many attempted to withdraw their funds. In
response, Bangladesh Bank announced an initiative to provide liquidity support
to the struggling banks. On September 22, the central bank stated that the
stronger banks would offer special loans to the weaker ones through
deposit placements for a specified term. However, stronger banks would not be
forced to participate. Shortly after, five troubled banks signed agreements
with the central bank to secure loan assistance, which they have now started to
receive from the stronger banks.
At
least 14 banks, including Sonali Bank, Dutch-Bangla Bank, BRAC Bank, City Bank,
and Shahjalal Islami Bank, have expressed interest in offering risk-free loans
due to Bangladesh Bank's guarantee.