Bangladesh Bank is devising an interest-free “special liquidity support” plan for Shariah-based banks grappling with severe liquidity shortages. The central bank intends to extend this support to Islamic banks against “Shariah-based Special Bond,” aligning with Islamic finance principles.
The government, facing liquidity challenges, issues bonds through the central bank to meet payment obligations. The proposed bonds, with potential tenures of 90 and 180 days, will be callable instruments, allowing the government to withdraw them before maturity. The move aims to assist Shariah-based banks facing liquidity crises, with total current account deficits for five Islami banks reaching nearly Tk 14,000 crore as of January 18.
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