Commercial banks are gradually recovering from a long-standing liquidity crisis, due to central bank cash injections despite a rigid monetary policy, according to officials and bankers.
This upward trend is visible in two major liquidity indicators: the volume of excess liquidity in banks and the total amount of uninvested cash in vaults during the last several months.
Excess liquidity includes cash and cash-equivalent assets like treasury bills and bonds, along with cash reserves. Uninvested cash refers to available credits in the vaults.
Data from Bangladesh Bank (BB) shows that uninvested excess cash in the banking system was Tk 116.30 billion in June 2023, but dropped to Tk54.3 billion in November 2023 and Tk51.56 billion in January 2024. However, it has since rebounded, rising to Tk76.43 billion in February and Tk84.09 billion in April 2024.
Similarly, excess liquidity in commercial banks has shown signs of recovery. It was Tk1 lakh 66 thousand crore in June 2023, fell to Tk1 lakh 41 thousand crore in November 2023, and then to Tk1 lakh 55 thousand crore in January 2024.
By February, it rose to Tk1 lakh 62 thousand crore and reached Tk1 lakh 76 thousand crore in April 2024.
The central bank has been consistently providing liquidity injections to commercial banks, significantly improving their liquidity position.
According to Bangladesh Bank data, liquidity support to banks rose from Tk63,347 crore in June 2023 to Tk3 lakh 45 thousand crore in November, Tk3 lakh 51 thousand crore in December, and Tk3 lakh 63 thousand crore in January 2024. Although it dropped slightly to Tk3 lakh crore in February, it remained high at Tk3 11 thousand crore in March 2024.
