The Bangladesh Bank has not made a definitive decision on providing struggling banks with liquidity support through alternative measures beyond the interbank system.Speaking to journalists on Monday evening, the central bank's spokesperson Husne Ara Shikha confirmed that discussions are ongoing with the banks facing liquidity crises, but no decision has been made on whether alternative measures will be adopted.Currently, several banks are facing a severe cash crunch, unable to return deposits to their customers or attract new deposits.As a result, the central bank is exploring options to provide funding to these banks to help them overcome their dire liquidity conditions.A senior official said Bangladesh Bank is considering floating treasury bills and bonds in the market to raise funds and support the crisis-hit banks.Usually, Bangladesh Bank sells treasury bills and bonds to other banks on behalf of the government. These instruments act as collateral, enabling banks to secure loans.When a bank faces a liquidity shortage, it can obtain funds from Bangladesh Bank by pledging these bills and bonds. Loans cannot be taken without offering collateral.However, during the tenure of the ousted Awami League government, the central bank allowed several banks, including Islami Bank, to borrow funds without collateral through special approvals.After the fall of the Sheikh Hasina regime, several more banks joined the list of those unable to return customers' deposits.These banks are also in a position where they cannot provide collateral for loans. —bdnews24.com

Source: bd News24 November 26, 2024 20:29 UTC