State-run Sonali Bank has provided Tk 550 crore liquidity support to two more struggling banks through interbank market, with the Bangladesh Bank assuming responsibility for repaying any loans if these crisis-hit banks fail to do so.
Exim Bank received Tk 400 crore and Union Bank got Tk 150 crore from the state-owned bank.
Due to financial irregularities and corruption, several banks have become weak.
To help them recover, the Bangladesh Bank initiated efforts to gather funds from the interbank money market.
The BB expected that the bailouts could help them pay back depositors money and recover confidence crisis of the depositors.
This liquidity support will be available for three months, with the possibility of rolling over for up to one year.
Under the Bangladesh Bank鈥檚 guarantee, 10 solvent banks agreed to provide loan assistance to the struggling banks.
As part of the first phase, five strong banks lent Tk 945 crore to four weak banks, namely First Security Islami Bank, Social Islami Bank, Global Islami Bank and National Bank.
In the second phase, three strong banks provided Tk 1,480 crore to five banks, which included the initial four and Islami Bank Bangladesh. IBBL received Tk 800 crore, SIBL Tk 250 crore, National Bank Tk 230 crore, Global Islami Bank Tk 125 crore and First Security Islami Bank Tk 75 crore, most of the amounts were also sourced from Sonali Bank.
Union Bank, plagued by financial mismanagement, received this loan under the central bank鈥檚 guarantee.
S Alam Group allegedly took Tk 18,000 crore from Union Bank in names and anonymous names, which constituted 64 per cent of the bank鈥檚 total lending.
Around 42 per cent of Union Bank鈥檚 loans have allegedly become non-performing, although the bank informed the central bank that its non-performing loans were under 4 per cent.
To address these irregularities, the Bangladesh Bank restructured the board of directors of Union Bank a month ago, removing S Alam鈥檚 influence.
