The banking sector in Bangladesh is facing a severe liquidity crisis due to financial irregularities, the central bank’s contraction policy, and poorly executed mergers. Banks are borrowing heavily from both other banks and the Bangladesh Bank to manage the situation. Last 24 April, banks facing liquidity issues borrowed Tk 20,657 crore from the central bank, amounting to more than Tk 2,37,000 crore in the 14 working days of this month alone.
The crisis is exacerbated by loan scams, the central bank’s contractionary policy, and poorly timed bank mergers, which have caused panic among customers and led to mass withdrawals. Despite high-interest rates on bank deposits, customers are turning to government securities for the safety of their money.
Source for more details:
