Hasina orders assessment of liquidity status in banks amid murmurs of crunch

The Banking and Finance Division has been asked to report on the liquidity situation as soon as possible

Three days after terming the murmurs of a liquidity crisis in the banks as pure lies, Prime Minister Sheikh Hasina has ordered officials to report her after assessing the liquidity situation of banks.

She issued the order during a meeting with the secretaries of government ministries and divisions on Sunday, confirmed Cabinet Secretary Khandker Anwarul Islam during a briefing after the meeting.

“It [liquidity crunch] was discussed indirectly and the Banking and Finance Division has been ordered to take a look into it,” the top civil servant in the country said when he was approached about the matter at the briefing.

The situation with Islami Bank was also discussed in the meeting, he said.

“Overall... a few more banks were discussed. So many chatters are swirling around right now. They [Banking and Finance Division] were asked to inform us immediately about what the real situation is.”

A top vernacular daily this week broke the news about an unscrupulous gang withdrawing around Tk 70 billion through various ways using eight shell companies from Islami Bank Bangladesh Ltd.

Of the amount, a whopping Tk 24.9 billion was withdrawn between Nov 1 and Nov 17.

These shell companies were also responsible for withdrawing Tk 23.2 billion from Social Islami Bank Limited and First Security Islami Bank Ltd. In total, Tk 95 billion from the three banks have been withdrawn.

At a rally in Jashore on Thursday, Hasina had said any talk of a liquidity crisis in the banks is plain rumour and urged members of the public not to heed them.

“It’s a lie that there is no money in the banks,” she said while addressing the rally.

"I had a meeting with the governor of Bangladesh Bank [Nov 23]. We have no problem. Every bank has enough money," the prime minister added.

She blamed the BNP for spreading “rumours” about the economy.

In an urgent statement on Nov 13, Bangladesh Bank brushed aside social media posts advising people to draw their deposits from banks as “conspiratorial” and assured members of the public that the banks in the country are not facing a liquidity crisis.

“Conspiratorial news is being spread on social media to draw deposits from banks,” the Bangladesh Bank said.

“The banking system of Bangladesh is in a strong position. There is no liquidity crisis in the banking system.”