Five banks on Wednesday provided a total of Tk945 crore to four struggling banks through the interbank market, with the Bangladesh Bank assuming responsibility for repaying any loans if these crisis-hit banks fail to do so, according to central bank Spokesperson and Executive Director Husne Ara Shikha.
First Security Islami Bank PLC received Tk300 crore from three banks — City Bank PLC (Tk200 crore), Mutual Trust Bank PLC (Tk50 crore) and Dutch-Bangla Bank PLC (Tk50 crore), with the bank’s maximum borrowing limit of Tk1,500 crore.
City Bank and Mutual Trust Bank also extended Tk300 crore and Tk50 crore respectively to Social Islami Bank PLC, which has a borrowing cap of Tk2,000 crore.
Eastern Bank PLC provided Tk25 crore in loan to Global Islami Bank PLC, with the latter’s maximum borrowing limit of Tk500 crore.
Scam-hit National Bank Limited secured Tk270 crore from three banks — City Bank (Tk200 crore), Mutual Trust Bank (Tk50 crore) and Bengal Commercial Bank PLC (Tk20 crore), with NBL’s maximum borrowing limit of Tk2,000 crore.
The four struggling banks, which were previously under the control of S Alam Group, have undergone board restructuring recently following political changes in the country.
The interest rates for the loans will vary among banks based on the amounts and their capacity, potentially aligning with the central bank’s standing lending facility rate, currently at 11%.
This liquidity support will be available for three months, with the possibility of rolling over for up to one year.
On September 22, the Bangladesh Bank signed memorandums of understanding on credit guarantee with five financially troubled banks, namely National Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank and Union Bank, to help these banks partially return funds to their depositors.
