The Bangladesh Bank is set to provide Tk 8,000-crore special liquidity support to crisis-hit Islami Bank Bangladesh Ltd (IBBL) as the Sharia-based lender has failed to keep adequate CRR (cash reserve ratio).
The central bank has decided to provide Tk 8,000-crore overnight OD (Overdraft) facility to the bank at a special repo rate of 8.75 per cent under special consideration.
IBBL provided an equivalent amount of demand promissory note to the central bank against the overnight OD (Overdraft) facility.
A demand promissory note is a legally binding document between a borrower and a lender.
Bangladesh Bank executive director and spokesperson Mezbaul Haque confirmed the matter to The Business Post.
“As a regulator, we have a responsibility to save the bank at its crisis moment,” he added.
The central bank has taken the initiative at the request of the bank recently.
The central bank officials said that the liquidity situation of the bank is very vulnerable as IBBL failed to keep CRR with the central bank in 24 days of November and December last year.
CRR shortfall of the bank was Tk 5,101 crore on December 28 of the just-concluded year, the BB data showed.
Previously in December, Bangladesh Bank disbursed Tk 4,000 crore as liquidity support to five Islami banks, including IBBL, to help overcome the ongoing liquidity crisis.
Recently, the largest private bank faced mounting deposit withdrawal pressure over widespread loan irregularities.
