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Bangladesh Bank Cuts Liquidity Support For Nine Troubled Banks - BIZDATA INSIGHTS

Bangladesh Bank Cuts Liquidity Support for Nine Troubled Banks

Industry: Bank
Company: Bangladesh Bank, Bangladesh Commerce Bank, First Security Islami Bank Limited, Global Islami Bank Limited (GIBL), ICB Islamic Bank Limited, Islami Bank Bangladesh Limited (IBBL), National Bank Limited (NBL), Padma Bank Limited, SOCIAL ISLAMI BANK LTD (SIBL), Union Bank Limited
Company Intelligence Tag: Regulatory Insights

Bangladesh Bank has scaled back special liquidity support for nine banks, including five Shariah-based institutions, despite a vacancy in the governor’s position. The affected banks are National Bank, Padma Bank, ICB Islamic Bank, and six others majority-owned by the S Alam Group: Islami Bank Bangladesh, First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and Bangladesh Commerce Bank. These institutions have struggled with liquidity issues and previously relied on central bank support.

As of August 12, the central bank has instructed these banks not to honour cheques exceeding Tk 1 crore, though withdrawals above this limit can still be made from the issuing bank. This measure aims to ease the central bank’s liquidity burden. The banks have faced a combined deficit of Tk 30,202 crore in their accounts with the central bank and have utilised emergency funding under the “lender of last resort” facility. 

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