Home ›› 14 Feb 2023 ›› Front
Islami Bank Bangladesh Ltd (IBBL) has requested the Bangladesh Bank to provide it with Tk7957.31 crore more as special liquidity support for meeting its ongoing liquidity shortage.
The largest shariah-based bank made its plea to central bank governor Abdur Rouf Talukder on January 30 against receivable subsidies and incentives from the government.
IBBL in a letter, signed by its Managing Director and CEO Mohammed Monirul Moula, mentioned that the demand for deposit withdrawal from the banks has increased due to current inflationary pressure.
“Now we face pressure to deal with the additional deposit withdrawal activities,” Moula said in the letter.
The letter said that the bank cannot collect liquidity from any other sources due to systematic reasons as it is a shariah-based bank.
“In this situation, providing liquidity support for us has become an imperative,” the letter whose copy The Business Post obtained reads.
Despite frequent attempts over phone, Managing Director Mohammed Monirul Moula could not be reached for his comments in this regard.
After getting the IBBL letter, the central bank on February 05 launched a new liquidity support policy--mudarabah liquidity support--for the Islamic banks.
Islamic banks will be able to seek this liquidity support against receivable subsidies and incentives from the government.
The repayment tenure of the short-term loan will be 7, 14 and 28 days. The amount of mudarabah liquidity support shall be for a minimum of Tk10 crore.
Contacted, Bangladesh Bank executive director and spokesperson Md Mezbaul Haque told the Business Post that the central bank is yet to provide any liquidity support under the new mudarabah liquidity support policy.
The letter said that IBBL’s total subsidies and incentives from the government stood at Tk7957.31 crore.
Of them, Tk7,074 crore was as fertiliser subsidy while Tk400.69 crore as electricity and fuel subsidy, Tk144.89 crore as financial incentives and Tk337.73 crore as remittance incentives, said the letter.
The largest private bank already received liquidity support from the central bank several times.
The bank in December last year secured Tk8,000 crore overnight OD (overdraft) facility from the central bank at a special repo rate of 8.75 per cent under special consideration.
Before taking the move, the banking regulator disbursed Tk4,000 crore as liquidity support to five Islami banks, including IBBL.
Recently, the largest private bank faced mounting deposit withdrawal pressure over widespread loan irregularities.
S Alam Group, a Chattogram-based business conglomerate, is the majority shareholder in the bank.
