Liquidity-strapped banks are expected to receive support as well-off bankers agree to lend to struggling institutions due to regulatory interventions. Top management from stronger banks will seek liquidity support from their boards for troubled banks, with the Bangladesh Bank (BB) providing a three-day repayment guarantee. Five cash-hungry banks—National Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank, and Union Bank—have signed agreements with the BB for credit support, despite concerns from fund-surplus banks. The BB clarified its guarantee policy in a recent meeting, rejecting calls for special bonds. The current account deficit for nine troubled banks has surpassed Tk 180 billion. Conditions for liquidity support include a fixed interest rate of 11% and provisions for forced loans if repayments are missed. The BB may deduct funds from banks’ current accounts or recover cash through asset sales if necessary.
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