Five liquidity-strapped commercial banks in Bangladesh, including National Bank and Social Islami Bank, have not yet received any funds despite securing guarantees from the central bank for liquidity support. These banks signed agreements with Bangladesh Bank to access interbank credit, but none have successfully borrowed from banks with surplus liquidity due to concerns over the creditworthiness of the struggling banks. The central bank has noted that there has been no transaction under the guarantee mechanism so far. The central bank’s assessment of liquidity needs extends to two other banks, Islami Bank and Exim Bank, amidst ongoing financial challenges. The Bangladesh Bank has imposed nine conditions for the liquidity support, including a maximum duration of one year with a fixed interest rate of 10.50%. If the borrowing banks fail to repay, lenders can convert loans into forced loans for 90 days, and the central bank can recover funds by deducting from the banks’ accounts or selling their assets. Additionally, a 2% penalty on interest will apply for late repayments.
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