Amid the ongoing unrest, the country's banking sector has once again been deeply affected.
But experts believe that the change of government in the face of mass protests can also bring good news for the economy.
Although online and ATM-based transactions took place on a short scale, almost all economic activities including remittance, import, export remain halted as banks remain closed, bankers said.
Bankers and economists said that during this closure, all foreign trade activities were closed and if there is an internet blackout again then domestic transactions will also be halted.
The flow of remittances in the country was interrupted. It was not possible to open import and export letters of credit. Due to this, the current economic crisis of the country will be more fragile, they warned.
Ahsan H Mansur, executive director at the Policy Research Institute (PRI) of Bangladesh said: “The change of government in the face of mass protests can also bring good news for the economy. It has to be seen who will control and direct the next government.”
“If institutional reform of the country including Bangladesh Bank is possible, it will not take much time to overcome the ongoing loss in the economy,” he added.
Bankers said that around the capital, some branches in Motijheel, Karwan Bazar, Shahbagh, Old Dhaka, Uttara, Mirpur areas were opened on Sunday morning, but their activities ceased when violence started.
On Sunday, activities in the bank were also limited, if Friday and Saturday are added, the bank will remain closed for six consecutive days at this time.
However, apart from the closure of banks, only ATM booths were operational among the recognized means of money transactions in the country, due to internet shutdown.
In the last week of July, the ATM booths were closed due to liquidity shortage.
Cash crunch in ATMs
Bankers also said there is still a cash crunch at ATM booths, bankers also said. Complaints were received that money was not available as per the demand in the ATM booths in different districts of the country including the capital Dhaka.
Most of the booths in Rampura, Badda, Khilgaon, Basabo and Shahjahanpur in the capital remain closed on Monday.
A security staff member of MTB Bank's ATM booth on Merul Badda said that bands of protestors were marching one after another. Any time the procession turns into a conflict, the situation will escalate. For this reason, instructions have been given to lower the shutters of the booths.
A depositor said that he visited several places in Badda, Shahjahanpur and Khilgaon, for a booth. But on the main road the booth was closed.
Another setback in forex income
Incidents of violence and death in the country have created intense anger and anxiety among remitters.
In some countries in Europe, North America and the Middle East, expatriates held rallies and demonstrations in solidarity with the student movement, where the idea of remittance shutdown was introduced.
The impact of the expatriate announcement became visible in July's remittance inflows.
Last month, remittances to the country reached $1.90 billion, which is the lowest in the last 10 months.
Remittances fell by about 25% in July compared to June.
On the last day of July, $120 million came as remittance, but it was not enough as the country’s remittance inflow declined 3.2% year-on-year (YoY) to $1.90 billion in July.
A major fall in remittances has taken a toll on the country's foreign exchange reserves. Reserves fell by about $1.30 billion in July.
According to the data of the central bank, as per BPM6, the country's reserves were $21.78 billion on June 30.
On July 31, the amount fell to $20.48 billion.
However, usable net reserves are now less than $15 billion, according to the sources.
Alternative offline internet infrastructure
Keeping the previous shutdown experience in mind, this time Bangladesh Bank (BB) said they develop an alternative internet infrastructure to keep the financial sector insulated and ensure smooth execution of transactions in the event of any unexpected situation, such as the recent countrywide internet outage.
The central bank shared the plan at a meeting with the Association of Bankers, Bangladesh (ABB), a platform of top officials of banks, at its headquarters last week.
Central bank governor Abdur Rouf Talukder presided over the meeting while managing directors and CEOs of Pubali Bank, City Bank, Jamuna Bank, Eastern Bank, Bank Asia, Islami Bank Bangladesh and Mutual Trust Bank were also present.
"We have learned a lot from the recent abnormal situation," ABB Chairman Selim RF Hussain told the media after the meeting.
The learnings are that two forms of security have to be ensured, one for brick-and-mortar branches and the other for online banking, said Hussain, also the managing director of Brac Bank.
"We have to make an alternative internet infrastructure…and improve broadband capability so that we can continue banking services… The good news is that Bangladesh Bank is thinking about an alternative internet infrastructure for banks," he said.
He said the IT department of the central bank would prepare a draft plan and share the document with the banks.
