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BB will safeguard depositors’ interests

Mansur says as he requests customers of ailing banks not to panic
STAR BUSINESS REPORT
Bangladesh Bank Governor Ahsan H Mansur requested customers to keep calm regarding the crisis plaguing over half a dozen ailing banks, expressing optimism that their situation would turn around soon.
Seven to eight banks are currently contending with a liquidity crisis after thousands of crores were misappropriated through loans and irregularities, Mansur said at a press conference after meeting with bankers at the central bank headquarters yesterday.
He added that those banks would be given liquidity support on a limited scale considering the interests of depositors.
However, he added that help would not be provided by printing money.
“If we want to bail out these banks, around Tk 200,00 crore is needed,” he said. “But if we print the money, macroeconomic stability will be destroyed and the exchange rate will surpass Tk 150 per US dollar.”
So, the Bangladesh Bank will play the role of guarantor for trouble-hit lenders, allowing them to avail liquidity support or loan facilities from other banks, the central bank governor explained.
“Such banks will get liquidity from the inter-bank money market,” he said.
Since Mansur was appointed as governor on August 14, the Bangladesh Bank has reconstituted the boards of Islami Bank Bangladesh, Social Islami Bank, Global Islami Bank, Union Bank, National Bank, First Security Islami Bank, Bangladesh Commerce Bank, Al Arafah Islami Bank, United Commercial Bank, Exim Bank and IFIC Bank.
Most of these lenders were controlled by S Alam Group, a Chattogram-based conglomerate.
In recent weeks, customers have rushed to the branches of cash-strapped banks in a bid to withdraw funds.
However, the Bangladesh Bank governor requested depositors not to withdraw all their money.
“Withdraw as much as you need, but give us some time. We hope the banks will turn around,” he said.
Mansur also expressed hope that the distressed banks will overcome the situation as their boards had been reconstituted.
“The quality of the banks will improve as their management will change soon,” he said.
“Every bank will be audited. If needed, we will go for mergers and acquisitions of ailing banks,” Mansur added.
Turning to loan defaulters, he said that major delinquents would be caught and their assets in the country would be confiscated.
“We are speaking to the World Bank, the United States and the United Kingdom to bring back The