Sadequr Rahman, a 73-year-old man, attempted to withdraw remittance funds from the Savar branch of Social Islami Bank Limited (SIBL), the money which his son had sent from Saudi Arabia in October. Raisuddin, son of Sadequr, sent Tk 100,000 on 24 October to cover family expenses and medical costs for his elderly parents. Bangladesh Bank provides liquidity guarantee of Tk 6,585 crore to 7 banks As of November 13, Sadequr had managed to withdraw Tk 35,000 in three installments. Speaking with this correspondent over the phone, Sadequr said he needed to withdraw at least Tk 70,000 to meet his family’s expenses. But, bank officials requested that he take the money in several installments, as SIBL faces a severe cash shortage. Like Sadequr, many customers of crisis-hit banks associated with the S Alam Group are struggling to access their hard-earned deposits due to widespread loan defaults. Borrowers have gone into hiding, and their businesses have become "sick" due to mismanagement of funds, according to an industry insider. Abul Hossain (name changed), an official at the Savar branch of SIBL, told UNB that the bank is facing significant difficulties, as many depositors are seeking to withdraw their full balances. He said the branch holds deposits amounting to Tk 87 crore, and that if even one-third of depositors attempt to withdraw money at short notice, it would be challenging for any bank. According to Bangladesh Bank (BB) regulations, deposited funds are invested in various long-term loans. No liquidity crisis, Tk 5,585cr support provided to 7 banks: Bangladesh Bank Hossain added that they are providing cash to depositors in small amounts and have assured them that their money will be returned in installments. The circulation of cash has decreased recently, but the bank’s management is working to recover its loans by regularising loan installments. Under the central bank’s (BB) guarantee to access liquidity support from the inter-bank money market, Islami Bank, Social Islami Bank, First Security Islami Bank (FSIB), Global Islami Bank, National Bank, and Union Bank have received several thousand crore taka in liquidity support from more financially sound banks. Despite this, depositors continue to gather at branches, head offices, and ATM booths of these cash-strapped banks, but they often cannot withdraw the amounts they need. Apart from National Bank, the Chattogram-based conglomerate S Alam Group has a controlling stake in the boards of the other banks now facing liquidity crises. A significant portion of loans was directed towards the S Alam Group, with funds reportedly siphoned abroad, rendering the loans in default. Consequently, banks linked to the S Alam conglomerate are experiencing a substantial cash deficit relative to customer demand. Muhammad Foranullah, the acting Managing Director of SIBL, told UNB that the bank is collaborating with the central bank to arrange instant liquidity solutions to meet cash demands. The bank has also collected loan installments and deposits from customers amounting to approximately Tk 1,500 crore over the last two months, which has boosted SIBL’s cash flow. In response to a query, he said SIBL is currently meeting depositor cash demands as required. But, some branches are encountering issues when multiple customers attempt to withdraw cash simultaneously. Foranullah went on to say, “Everyone is aware of the problem, but it will be prolonged if customers continue to withdraw cash beyond their immediate needs. Depositors will receive their money as the bank returns to normal operations.” Mohammad Abdul Mannan, the chairman of FSIB, mentioned that normal banking activities have resumed following liquidity support from the inter-bank money market. He explained that the bank has successfully recovered substantial funds from borrowers since its board was restructured. He noted that FSIB is prioritising repayments to meet customers’ basic needs, medical emergencies, urgent situations, and remittance encashments. The bank is also working to repay larger depositors in phases. Abdul Awal Mintoo, Chairman of National Bank, told UNB that the bank is paying its customers, though large withdrawals will be processed in phases. He said these problems have not arisen overnight but have developed over several years. Mintoo assured that the bank’s position would improve over time, asking depositors to remain patient.

Six major state-owned banks—Sonali, Janata, Agrani, Rupali, BASIC, and Bangladesh Development Bank (BDBL)—have been operating without managing directors (MDs) for nearly a month, creating a leadership vacuum in these key financial institutions. The Ministry of Finance sent a letter on September 19, officially canceling the contracts of the MDs for these banks. In response, the chairmen of the banks have urged Finance Adviser Dr. Salehuddin Ahmed to expedite the appointment of new MDs. Banks hit by liquidity crunch: Limited cash withdrawals spark nationwide frustration In a meeting on Monday, Sonali Bank Chairman Mohammad Muslim Chowdhury, Agrani Bank Chairman Syed Abu Nasser Bakhtiar Ahmed, and Rupali Bank Chairman Nazrul Huda met with the finance adviser to discuss the urgent need for leadership in the banks. They stressed the importance of filling the vacant MD positions as soon as possible. A chairman who attended the meeting confirmed that they had formally requested new MD appointments, and the finance adviser assured them that the matter would be reviewed. Finance Adviser urges banks to ensure rigorous loan scrutiny and inclusive lending Since the September 19 letter, the MDs have been officially removed from office, leaving the banks to operate without their top executives.

Bangladesh Bank has announced that all banks across the country will remain closed on Thursday, October 10, in observance of Durga Puja, following a government-declared holiday. The Ministry of Public Administration issued an official notification on October 8, confirming the nationwide general holiday as part of Durga Puja celebrations. The holiday was announced via an executive order from the interim government. In response, Bangladesh Bank issued a separate notice through its Department of Offsite Supervision. The notice was circulated late Tuesday night, informing banks of the closure. Read: Cumilla’s Bibir Bazar land port to remain shut for six days marking Durga Puja However, bank branches, sub-branches, and booths located in key areas such as seaports, land ports, and airports will remain operational under special arrangements to ensure uninterrupted services in these crucial sectors. This holiday closure is part of the national observance of Durga Puja, a major religious festival for Hindus. Read more: Durga Puja begins

Alauddin, a middle-aged migrant worker who recently returned from Saudi Arabia, faced a shocking reality last Thursday when he attempted to withdraw Tk 50,000 from the Bashabo branch of First Security Islami Bank (FSIB). Desperate to secure the funds for his father's medical treatment at Lakshmipur District Sadar Hospital, Alauddin was offered just Tk 5,000 by the bank. After explaining the urgency of his situation, he managed to persuade bank officials to increase the disbursement, but they only agreed to provide Tk 10,000, citing a severe liquidity crisis. “I told them it’s for my father’s treatment, but they said the bank is struggling with cash flow and couldn’t offer more,” Alauddin shared, visibly frustrated. “How am I supposed to cover these expenses?” Three weak banks in Bangladesh receive Tk 945 crore liquidity support The issue is not isolated. Similar incidents have been reported across the country. UNB learned that both FSIB and National Bank’s branches in Tangail saw gatherings of customers last Wednesday and Thursday, with many walking away disappointed after being offered only Tk 5,000 to Tk 10,000 per transaction, regardless of their withdrawal amounts. Senior FSIB officials, speaking to UNB, acknowledged the crisis, explaining that banks are facing unprecedented liquidity shortages due to a rush of withdrawals as customers scramble to meet their expenses. Customers were asked to withdraw smaller amounts gradually, said one official. Muhammad Abdul Mannan, Chairman of FSIB, confirmed the challenges but assured that steps were being taken. “We have signed an agreement with Bangladesh Bank to secure Tk 300 crore this week to meet emergency demands. Additionally, FSIB has gathered Tk 450 crore from its investments to address the shortage,” he said. Mannan pointed out that the central bank had guaranteed inter-bank loans to ensure liquidity in the short term. “It is a regular system in the banking sector, which was hampered due to various bad practices during the last government in the country,” said Mannan, who is also vice president of Bangladesh Association of Banks (BAB). Abdul Awal Mintoo, Chairman of National Bank Limited (NBL), echoed similar concerns, blaming Bangladesh Bank’s lack of regulation for the financial distress. National Bank has always maintained a solid reputation, but in recent years, it faced serious issues due to poor oversight by the central bank, he said, adding now, it’s their responsibility to step in and fix the liquidity shortage. Depositors are now feeling the brunt of the massive loans taken by companies like S Alam and Sikder Group, which have crippled banks after these groups failed to return the borrowed funds. With the regime change in Bangladesh, many of these individuals have gone into hiding or fled the country, leaving banks in dire financial straits. 6 financially strong banks provide Tk 1,000cr liquidity support to 5 weak banks The Bangladesh Bank has already restructured the boards of 11 banks in response to the crisis and imposed restrictions on the sale of assets linked to S Alam and some other groups. These assets may be sold to recover the defaulted loans, Bangladesh Bank Governor Dr. Ahsan H. Mansur said, adding that the government will ensure that depositors’ money is safe. Across Bangladesh’s 61 banks, covering over 11,000 branches, many are grappling with a significant cash crunch. According to central bank sources, the flow of money in the market has been reduced somewhat due to the contractionary monetary policy. Unrest in recent months, sparked by student protests and political upheaval, has further exacerbated the issue. At that time, banking activities were severely disrupted, leading to widespread delays in cash transfers and a backlog of transactions. Bangladesh Bank Governor has assured liquidity crisis resolution for pvt banks: Abdul Awal Mintoo

Movements in the exchange rate influence the decisions of individuals, businesses and the government. Collectively, these decisions impact economic activity, inflation and the balance of payments. Exchange rates can be measured in various ways, each providing different insights into the currency's value and its effects on the economy. Read:  Bangladesh Bank enhances foreign currency support for energy import Below are today’s (Sunday’s) foreign currency exchange rates: Currency              Buy (Tk)               Sell (Tk) US Dollar              119.00   120.00 Euro       129.52   133.93 British Pound     154.77   158.78 Japanese Yen    0.79        0.81 Singapore Dollar               90.45     93.52 UAE Dirham        32.39     32.68 Australian Dollar               80.17     82.27 Swiss Franc         137.52   141.03 Saudi Riyal           31.67     31.96 Chinese Yuan     16.81     17.24 Indian Rupee     1.40        1.44 Please note that exchange rates are subject to change at any time depending on market conditions and fluctuations. Source: Banks

The visiting International Monetary Fund (IMF) delegation has advised Bangladesh Bank to disclose detailed and complete information regarding bad and risky loans fin the public interest. Meeting sources said that the visiting IMF delegation gave this suggestion in the meeting held with the BB officials on Sunday (April 28).  In the meeting, the IMF asked to make the financial health of the banks and the inspection report open to the customers. At the same time, it urged to increase the number of inspections to prevent irregularities-corruption and loan scams. Officials concerned in the meeting said that bad loans or risky assets are increasing in banks due to various irregularities including big loan scams. Several banks have weakened which also acknowledged by the BB Governor.  Therefore, the IMF believes that the deposits of those banks which are in trouble are also at risk. In such a situation, the global lender suggested that the banks should disclose the full report of risky assets to the customers.  Read more: DUJ, DRU, TIB condemn ban on journalists entering Bangladesh Bank According to the IMF Officials, “If these reports are published, the customers will be able to make informed decisions about keeping their deposits.” In the meeting, the IMF sought to know whether the central bank's inspection of banks' financial health is continuing or not. Clarification has also been sought as to whether inspection reports are disclosed to customers or not.  In addition, the IMF delegation suggested increasing the quality and number of inspections to prevent irregularities, corruption and loan scams, sources said. When asked about the meeting with the BB, the executive director and spokesperson of the BB Mesbaul Haque said that the meetings with the IMF are ongoing. This meeting will be held step by step till May 8. He did not agree to make any comment other than that and said the details will be given in future. Read more: Islamic Banking in Bangladesh: Commendable contribution to the country’s economic growth

Cashless payments are adding to the joys of Eid shopping, traveling, Iftar and Sehri meals. Thanks to the hefty discounts offered by banks and mobile financial services (MFS) credit card holders are making best use of the facilities. Banks keeping in mind the demand of different types of their customers, provide up to 80 percent discount, cashback, and buy one get one offers in purchasing products and services using credit and debit cards during this Eid festival. Some banks are offering discounts on the purchase of various products including Eid clothes, shoes, and jewellery. In addition, iftar prices are discounted throughout the month of Ramadan. There are also many 'Eid gifts' including buy one get one offers. According to the people involved, the trend of increasing the prices of goods and services around the festival has been going on for a long time in Bangladesh. But with the passage of time, such a tendency is gradually decreasing; The picture is changing. Now in Bangladesh too, the prices of products are being discounted during the festival. Read: Standard Chartered unveils special deals, offers Ramadan-Eid to promote cashless experience “Banks have added a new level in terms of discounts. They offer many benefits in avoiding cash, which discourages the risk of carrying cash and encourages purchases on cards. Banks have arranged special offers for their card holders,” Mashrur Arefin, Managing Director and CEO of City Bank told UNB while talking about Eid offers of banks. He said that as many as 300 lifestyle stores offer up to 60 percent and more than 50 jewelery establishments offer up to 80 percent discount for their cardholders. In addition, customers will get up to 70 percent discount on online shopping payments. Besides, more than 130 restaurants have ‘buy one get one’ offer or up to 30 percent off on Iftar and Dinner. Apart from this, various offers have been announced on airfares for returning home and traveling abroad during Eid, he said. Encouraging a cashless society, currently, StanChart provides up to 60 percent discount, which is convenient to the customers in the use of seven types of credit cards to make Eid more enjoyable, said Sabbir Ahmed, head of consumer banking of StanChart. “We hope our customers will go cashless to make the most of the benefits and privileges offered by our card offer", he said. Read: Bangladesh moves towards cashless society: PM Hasina on launching Taka Pay card Soumya Basu, Country Manager, Bangladesh, Nepal & Bhutan of Visa told UNB, “We are on way to becoming a truly cashless Bangladesh with the rise of non-cash forms of payment.” “During the holy month of Ramadan, we have witnessed that Visa cardholders continue to avail the benefits of digital payments – its convenience, inherent security, and speed – while they shop and spend online and offline,” he said. “We expect this trend of transacting digitally to accelerate in the days leading to Eid and are delighted to empower our cardholders with the security, ease of use, and power of the Visa network,” Soumya pointed out. Moulude Hossain, Deputy General Manager, Strategy and Product, ‘Upay’ of UCB told UNB that upay has thousands of merchant points across the country so that our users can practice piety without any additional stress during the holy month of Ramadan and enjoy Eid festivity hassle-free. To add further convenience to "our users’ lifestyles, we have recently introduced UCB-upay co-branded prepaid card, which anyone can avail of even without having a bank account," he said, On the other hand, upay brought the most exciting offers for its valuable users in Ramadan to double the joy of Eid festivity, he said. Read more: Nagad MD proposes cashless transactions to save billions and build a smart Bangladesh More banks including Eastern Bank, Brac Bank, Bank Asia, NBRC Bank, AB Bank, and Islami Bank Bangladesh, among MFSs bkash and Nagad also offer discounts in Eid in cashless shopping and travelling.

Every year, thousands of Bangladeshi students go abroad for higher studies. Researches show that the number of students going abroad has tripled over the last 15 years. With such a huge volume of students going abroad, there is a natural question: How are the living costs or the tuition fees transferred from Bangladesh? This is where the student file comes in.  What is a Student File?  According to the regulation of Bangladesh Bank, there is no direct channel to send money to a foreign account from an existing local savings/current account. There is also a limit on how much foreign currency can be carried in each foreign trip (US$ 12,000) as well as a limit on credit card payments.  In such a scenario, a student opting to study abroad faces an imminent challenge regarding tuition fee payment or remitting the cost of living. Some European universities require students to maintain a “Block Account” which essentially withholds the entire cost of study and disburses locally to the students as per their need.  Read more: Study in Ireland: Application process, cost for international students A student file essentially bypasses this regulation legally where the bank remits the payment on behalf of the student. A student file is the only authorized way through which a student can send their tuition fee or remit the living cost abroad.  How to Open a Student File?  The process of opening a student file is pretty straightforward. At first, the student or their legal guardian needs to open a savings account with a relevant bank that offers the student file service. After that, the bank can entertain the request for opening a student account.  Typically, a student account can be opened on the same day as that of the application. The cost of opening a student file and the documents required vary from bank to bank. Read more: Study in Thailand: Admission process, cost for International Students But first, here’s what’s needed to open a savings account.  - Passport-size picture of the account holder (to be attested by the introducer)- NID/ Passport copy - Passport-size picture of the nominee - NID/Passport copy of the nominee - Utility bill copy (for address verification). Typically, the following documents are required for opening a student file in any bank.  - All academic certificates (original and copy)- All academic transcripts (original and copy)- IELTS certificate - Copy of passport - Visa document - Acceptance letter from the university - Tuition and living cost certificate - Detailed information about the financer. Read more: Higher Study Opportunities in Turkey for International Students: Process, Cost Which Banks Provide Student File Service?  Several leading banks in Bangladesh provide student file service including some government banks. However, it is important to note that due to the recent dollar crunch and new regulations from Bangladesh Bank, some banks are not opening new student files but are continuing to operate the existing ones. Also, having a savings account in the relevant bank is a key prerequisite for opening a student file. 

Bangladesh Bank (BB) has directed keeping the scheduled banks open on April 19-21 (Wednesday to Friday) to facilitate payment of garment workers' salary, Eid bonus and allowances. The central bank has asked the banks to keep open the branches before Eid-ul-Fitr in the industrial areas including Dhaka metropolitan, Ashulia, Tongi, Gazipur, Savar, Bhaluka, and the industry related branches of banks located in Narayanganj and Chittagong ensuring adequate security. Read more: Gazette published fixing Tk 8,000 as minimum wage for RMG workers The Department of Off-site Supervision of Bangladesh Bank on Monday issued a circular in this regard

Despite Bangladesh Bank’s initiatives to promote good governance in the banking sector, 17 banks have recently violated their loan disbursement limits, and are now embroiled in a severe liquidity crisis. Having been over-aggressive in providing loans, they are now unable to recover the loans and attract new deposits as desired, according to a latest internal report of the central bank seen by UNB. The banks should not sanction any new loans until they restore the ratio of their loans to deposits in accordance with limits set by Bangladesh Bank, which regulates the financial sector.   Also Read: Banks' assets will decrease by 40% if international reporting standards followed: FRC Chairman Conventional banks can provide loans of up to Tk 87 for every Tk 100 in deposits, while Shariah-based banks can give loans of up to Tk 92 against every Tk 100 in deposits, according to the rules of Bangladesh Bank. This is called Advance Deposit Ratio (ADR) or loan-deposit ratio limit in banking terms. According to the central bank report covering January 1-26 of this year, 17 banks violated the limits set for them on lending order due to lack of discipline. As a result, the concerned banks have been plunged into an extreme liquidity crisis, making it difficult for them to sanction new loans. Some of them are even unable to pay depositors in some cases. Experts fear that the existing situation has created additional risks for depositors. According to them, irregularities, corruption and ‘ghost loans’ - loans to firms that turn out to be non-existent -are behind the collapse of the banking system’s loan disbursement process. Also Read: Prime Bank receives $50m from IFC to support trade, forex liquidity needs in Bangladesh “In the banking sector, there have been allegations of giving large amounts of ghost loans in recent times. If this continues, the sector will be at risk,” said Dr ABM Mirza Azizul Islam, economist and adviser on finance to the last caretaker government. Mirza Azizul told UNB, "Lending beyond the limit against deposits disrupts the credit system." Besides, the debt collection situation of the banks is not satisfactory now. In such a situation, if the non-performing loans increase further with additional loans, then there is a danger for the bank and its depositors will suffer, he added. He suggested the intervention of the central bank in these banks immediately. Also Read: BB signs deal with 32 banks to accelerate disbursement of green fund According to the Bangladesh Bank report, the ADR of National Bank Ltd stood at 98.23 while that of AB Bank was 96.64 in its conventional stream and 103.45 in its Shariah stream. State-owned Basic Bank’s ADR stood at 91.17, One Bank’s was 89, and multinational National Bank of Pakistan’s was 87.52. Widespread irregularities and corruption have already been reported in these banks. Apart from this, Community Bank's ADR was 88.28, NRB Bank’s at 88.05 and IFIC Bank's ADR was 87.48, the report states. Shariah-based Exim Bank's ADR stood at 100.28, Standard Bank's at 96.28, Premier Bank's Islamic Window 155.09 and Bangladesh Commerce Bank's Islamic Window's ADR was 133.26. Read More: Banks’ transaction time from 9:30 am to 2:30 pm for Ramadan Apart from this, the ADRs of five other Shariah-based banks ranged between 93.01 to 104.54. A managing director (MD) of a private bank told UNB that the lending limit has undoubtedly been set by Bangladesh Bank based on adequate research and global best practices. No bank should have to cross the limit. “These violations are creating risk in the banking sector. Depositors in particular will be at greater risk. Already some banks and non-bank financial institutions are not able to return money to depositors,” he said, maintaining anonymity. The central bank has also extended the period of ADR adjustment five times to allow the banks to bring their lending practices in line with the limits. Read More: BB disburses Tk 4000 crore as liquidity support to 5 Islami banks However, many banks could not coordinate this. In such a situation, Bangladesh Bank even increased the required ADR to improve the overall liquidity situation of the banking sector to maintain the pace in credit flow to the private sector. The executive director and spokesperson of Bangladesh Bank, Md Mezbaul Haque, told UNB that although some banks may at times find themselves in violation of the ADR set for them, the central bank would under normal circumstances give them time to get themselves back within the limit. “But if they stay outside the limit for long, then they must be warned and action would be taken accordingly,” Mezbaul said. Read More: One of Silicon Valley's top banks fails; assets are seized