The Bangladesh Bank (BB) has granted a three-month extension to several crisis-prone banks for repaying the central bank guaranteed loan.
These banks include First Security Islami Bank, Global Islami Bank, Social Islami Bank, Union Bank, and National Bank. These banks were unable to meet the December deadline for repaying the first phase of loans obtained under the BB's guarantee scheme.
This loan guarantee scheme allows crisis-prone banks to borrow from financially sound banks in the interbank money market with BB's backing.
In the initial phase, these banks received a guaranteed loan of Tk 900 crore, with a three-month repayment period. However, due to ongoing financial difficulties, they were unable to repay the loan within the stipulated timeframe.
The BB introduced this guarantee system in September 2024 to address a liquidity crisis in several banks, including Islami Bank Bangladesh. Following a significant withdrawal of loans by certain business groups linked with the previous government.
Under the scheme, seven banks have received a total of Tk 7,350 crore in liquidity support, with Islami Bank Bangladesh receiving the largest amount at Tk 2,395 crore.
Despite this support, the financial situation of these banks has continued to deteriorate. To further alleviate the crisis, the BB recently provided an additional Tk 22,500 crore in liquidity support.