City Bank will provide Tk 100 crore in liquidity support to First Security Islami Bank (FSIB), which is currently facing a liquidity crisis. FSIB has applied to the Bangladesh Bank for a guarantee of this support. If approved, FSIB will receive the funds immediately. The central bank is expected to review the application positively since City Bank has adequate liquidity. This move comes after a meeting where managing directors of ten banks agreed to support struggling institutions. Many FSIB customers have reported difficulties in withdrawing their funds. FSIB’s liquidity support request is part of a larger effort, with seven struggling banks seeking a total of over Tk 25,000 crore. FSIB requested the highest assistance of Tk 7,900 crore. The central bank has signed agreements to act as a guarantor for five banks but has not yet determined the specific amounts each bank will receive. The liquidity crisis is attributed to alleged embezzlement and improper loan practices, with ongoing investigations into these claims. Following a recent political upheaval, the boards of these struggling banks were dissolved and restructured, particularly those associated with controversial entities.
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