The newly-appointed Managing Director and CEO of Agrani Bank, Murshedul Kabir, who previously served as the deputy managing director of both Sonali Bank and Janata Bank, has commented on the newfound rumours regarding the liquidity situation of banks in Bangladesh.
Md Murshedul Kabir was recruited through the Banker's Recruitment Committee of Bangladesh Bank, and joined Janata Bank Limited as a Senior Officer in 1988. On August 28 of this year, he was appointed as the managing director (MD) and CEO of Agrani Bank Limited.
In an interview, he said that the condition of Banks is relatively stable, contrary to the rumours; bank data show positive figures on most aspects, and in the fifty-one years of Bangladesh's history, no bank has ever closed its operations. The likelihood of any bank closing its operations is also improbable in Bangladesh, even in the current economic situation. Firstly, all banks must proffer a substantial amount of money in the reserves to the Bangladesh bank (BB) in the form of a Cash Reserve Requirement Ratio (CRR) of 4% and a Statutory Liquidity Ratio (SLR) of 13%. In addition to that, Agrani Bank pays an insurance premium against the deposits for additional safety.
He added, Bangladesh's banks have excess liquidity of Tk 1.69 trillion currently. Although the defaulted loan figures have swelled, the percentage has reduced from 10% the last year even after increased deposits and loans, which initially jumped the absolute figure.
The total deposits for banks in Bangladesh have also grown to over 14 lac crore taka from the previous year's figure of 13.7 lac crore taka.
Moreover, he went to great lengths to explain that even if banks get low on cash, they can borrow with Call Money Rate overnight with a low-interest rate of 5% to 6% on average. This goes to show that demand for such activities is low. Furthermore, the Central Bank has fully supported all banks vigorously and has its Assured Liquidity Support Policy for redundancy.
He added further that the Central Bank has also increased its monitoring with meetings almost every 15 days. Additionally, Agrani Bank has yet to default cheques for urgent commodities and priority sector goods. Agrani Bank does most of the critical imports, almost more than any other state-owned bank, to maintain economic stability and keep the country's energy and food security unaffected. The BB has already set a target to reduce the increased defaulted loans, and with their best efforts, they hope to tackle the case by the end of this year.
