Wednesday, 30 November, 2022

No liquidity crisis in banks: BB

  • Staff Correspondent
  • 15 November, 2022 12:00 AM
  • Print news

Bangladesh Bank on Monday assured that the country's banking system has no liquidity crisis since banks are holding excess funds of Tk 1.69 trillion.

"There is no liquidity crisis in the banking system as the banks have excess liquidity of Tk 1.69 trillion," Abul Kalam Azad, executive director at BB, told a press conference at BB headquarters in Motijheel, amid fake news about a liquidity crisis in the banking sector.

According to the BB spokesperson, rumors are being spread on social media, suggesting people to withdraw their bank deposits.

"Rumours are suggesting that banks lack cash or are experiencing liquidity problems, which is not true," Azad explained.

In response to propaganda in various social media claiming that people are

  withdrawing their deposits from banks, the central bank released a press release on Sunday claiming that deposits in banks are completely secure.

“Bangladesh Bank will take immediate steps to resolve any disruption in the liquidity management of banks,” Azad said.

The central bank officials assured the banks that a "standard repo rate and liquidity support" will always be provided for liquidity management.

Bangladesh's central bank has an active inspection and supervision department. There have been no bank closures in 51 years since the country's independence, and there is no expectation that any bank will close. People's deposits are completely secure. “Nothing has happened to alarm people about their savings in banks,” Abul Kalam Azad said.

Likewise, Azad expressed surprise about the rumours on restrictions on letters of credit, saying that "this is not true" as the central bank has updated information on this matter.

“This month, there were $1232 million worth of LCs opened, compared to $4743 million in October,” he said.

LCs can be opened without restrictions by Bangladesh Bank, and the respective banks can open loans based on remittance income, foreign currency funds, he noted.  By next January-February, the foreign exchange market should be back to normal in terms of supply and demand, he added.