Cenbank governor hints at continuation of inter-bank liquidity scheme
He directed the bank MDs to keep watch on the foreign exchange so that no one can hoard US dollars or divert it to cross currency aiming manipulation
Bangladesh Bank (BB) Governor Dr Ahsan H Mansur asked a number of financially sound banks to provide more funds as liquidity support to prop up the less solvent banks in the banking sector, under the central bank's guarantee system.
During an unscheduled meeting with the Managing Directors (MDs) and Chief Executive Officers (CEOs) of 17 banks today (11 November), the governor hinted that some banks will require more liquidity support, which would be met through the inter-bank liquidity management.
The MDs of state banks - Sonali, Rupali, Janata, Agrani and private sector banks - Brac, City, Pubali, Easter, Dutch Bangla, Dhaka, NCC, Mercantile, Premier, Jamuna, MTB, Southeast were present in the meeting.
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The department of Off-Site Supervision of the central bank organised the meeting on an emergency basis to discuss important issues with the banks. The issues are international LC payment and the present situation of the foreign exchange market.
Speaking at the meeting, he said the central bank will not print more currency to paper over the crisis like it did under some recent governors.
The MDs of banks informed the governor that the foreign exchange market is stable now, which will be at a positive level in January next.
Governor Dr Mansur warned the bank MDs to keep watch on the foreign exchange so that no one can hoard US dollars or divert it to cross currency aiming manipulation.
He also warned regarding the deployment of international LCs against some banks, despite having enough dollars for the banks.
The central bank will take administrative measures if any delay in LC payment is found in the future from now on, he added.
The MDs in the meeting demanded an increase in interest rate on credit cards' payments adding additional maintenance costs to the credit card services of respective banks.
Besides, the MDs also wanted to log cases as soon as declaring a loan as a write-off. But in the existing rule, banks have to wait two years to file a case.
The governor noted the demands of MDs, but he did not make any decision on these issues. He also asked the central bank officials to collect more information inquiries regarding the justification of these demands.
Governor Dr Mansur also pointed out that the banks have a capital shortfall and cannot provide dividends for stock market investors.
