Md Mehedi Hasan

Bangladesh Bank has directed five Shariah-based banks to resolve their current liquidity crisis while three of them were asked to bring down their advance-deposit ratio (ADR) within the regulatory limit as soon as possible. 

The government has started the fiscal year with the resolve to borrow less from the central bank to fund its budget deficit as it looks to rein in the runaway inflation to a tolerable level ahead of the polls.

For the first time, the central bank has published full-fledged data on stressed assets of banks, laying bare the sector’s deep ills that have been a subject in the public discourse for long as irregularities and scams often make headlines.

Fourteen non-bank financial institutions (NBFIs) out of a total of 35 were in the red zone last year as per the stress test report of the central bank. 

Banks in Bangladesh were bottom-ranked in 2022 among South Asian lenders when it comes to capital base, owing largely to rising non-performing loans. 

A majority of banks in Bangladesh are facing difficulties in running their day-to-day banking activities owing to a tightening liquidity caused by the dragging foreign currency crisis, slower deposit growth and lacklustre loan recovery. 

Investment in cybersecurity is very much essential and banks which are not investing in their digital operations and cyber security will totally go out of business within the next three or four years, said Selim RF Hussain, chairman of the Association of Bankers, Bangladesh (ABB). 

Bangladesh Bank slapped five shariah-based banks with fines amounting to Tk 281.3 crore in the first six months of the year for their failure to maintain the minimum levels of cash and liquidity.

Islami Bank has tightened its lending activities as the embattled bank looks to shore up its financial health by September.

In 2011 when mobile financial service (MFS) was introduced in Bangladesh, 27 banks took the approval from the central bank as many had correctly predicted an impending boom in mobile banking amid rising usage of cell phones. 

Bangladesh’s external sector continues to be in distress as the overall negative balance widened by 23.5 percent last fiscal year despite the narrowing trade gap and current account deficit.

The Bangladesh Bank has stepped up efforts to roll out a national card this year in order to cut the country’s reliance on international cards and save foreign currencies. 

Migrant workers sent home $1.97 billion in July, down 5.86 percent from a year earlier, in yet another bad tiding for the country’s strained foreign exchange reserves.