The banks are National Bank, Social Islami Bank, First Security Islami Bank,
Union Bank, and Global Islami Bank

TDS Desk:

The Bangladesh Bank (BB) has signed agreements with five crisis-hit banks, offering them guarantees to secure liquidity support from the interbank money market.

If a bank facing a liquidity crisis receives a facility from another bank, it will request a guarantee proposal from the central bank accordingly.

The Bangladesh Bank will provide guarantee facilities after considering the overall situation.

So far, seven distressed banks have applied to the central bank for guarantees to access more than Tk25,000 crore in liquidity support from the interbank money market.

Initially, the central bank on Thursday and Sunday signed agreements with five banks – National Bank, Social Islami Bank, First Security Islami Bank, Union Bank, and Global Islami Bank.

A senior official of the central bank said that the banks with which agreements have been signed will now collect funds from the interbank market and submit them to the Bangladesh Bank for guarantee, subject to board approval. After that, the central bank will assess how much money each bank can take under the guarantee and approve the amount.

Previously, seven banks applied to the central bank for special loans. First Security Islami Bank sought a guarantee for Tk7,900 crore, Islami Bank Bangladesh for Tk5,000 crore, National Bank for Tk5,000 crore, EXIM Bank for Tk4,000 crore, Global Islami Bank for Tk3,500 crore, Social Islami Bank for Tk2,000 crore, and Union Bank for Tk1,500 crore.

After the fall of Sheikh Hasina’s government on August 5, the boards of these banks were dissolved and reconstituted.