Four Weak Banks in Bangladesh Received Liquidity Support of Tk 945 Crore

A total of Tk 945 crore in liquidity support was given to four weak banks: First Security Islami Bank, Social Islami Bank, Global Islami Bank, and National Bank.

Nine requirements have been placed in the agreement between the Central Bank and these five institutions. The banks are required by the agreements to pay a guarantee charge of 0.25% on the amount guaranteed. The guarantee will last, depending on the circumstances, for a maximum of three months. The debt must be repaid profitably after it matures. They can take out another three-month loan after repaying the original loan in accordance with the agreement, making the entire procedure last a full year. In the event that the loan is not repaid on schedule, Bangladesh Bank is permitted by agreement to take the sum from the relevant banks’ current accounts.

According to the central bank, First Security Islami Bank received Tk 200 crore from City Bank, Tk 50 crore from Mutual Trust Bank and Tk 50 crore from Dutch-Bangla Bank. City Bank gave Tk 300 crore to Social Islami Bank, and Mutual Trust Bank gave Tk 50 crore. Eastern Bank gave Tk 25 crore to Global Islami Bank. City Bank gave Tk 200 crore to National Bank, Mutual Trust Bank gave Tk 50 crore, and Bengal Commercial Bank gave Tk 20 crore.

If required, banks will have to give the central bank the information and paperwork they need, and Bangladesh Bank has the authority to alter the guaranteed requirements.