Bangladesh Bank has injected an extraordinary Tk 52,500 crore into 12 struggling banks by printing fresh currency, marking one of the largest liquidity interventions in the country’s financial history.
Data released by Bangladesh Bank on Saturday shows that this massive support package is part of a wider strategy to stabilise the country’s fragile banking sector, which also includes plans to consolidate several weak institutions through mergers.
Of the total, Tk 33,000 crore was issued as demand loans to 10 banks to help them meet depositor withdrawals and restore short-term liquidity. An additional Tk 19,000 crore was provided by converting existing current account deficits into demand loans across nine banks, effectively offering them a critical financial breathing space.
Among the recipients are First Security Islami Bank, Social Islami Bank, National Bank, EXIM Bank, Global Islami Bank, Islami Bank Bangladesh, AB Bank, Bangladesh Commerce Bank, Investment Corporation of Bangladesh, Basic Bank and Padma Bank. First Security Islami Bank received the largest injection at Tk 14,200 crore.
Speaking on the developments, Bangladesh Bank Governor Dr Ahsan H Mansur confirmed that the central bank is moving ahead with plans to merge five private Islamic banks in the coming weeks, irrespective of the upcoming national elections. "This is an ongoing process and we expect the next government to sustain these reforms," Dr Mansur said.
He added that liquidity assistance had already been extended to these institutions to stabilise operations ahead of the mergers. Six banks, identified as vulnerable due to significant irregularities and loan fraud, are scheduled to be consolidated by July.
“These banks will temporarily come under government management before their shares are transferred to both local and international strategic investors following restructuring,” Dr Mansur explained.
The unprecedented scale of support underscores the severity of challenges facing Bangladesh’s banking system, as authorities race to safeguard public confidence and ensure the sector can continue to support economic growth.
