Depositors have continued to struggle in retrieving their savings from financially weak banks as these institutions have been grappling with persistent confidence crisis.
Despite some improvement in these banks鈥� cash flow in the past few weeks, many depositors are still unable to access their funds as banks negotiate payouts far below the desired amounts due to high withdrawal pressure, bankers said.
Union Bank, Global Islami Bank, Social Islami Bank, First Security Islami Bank, Bangladesh Commerce Bank and National Bank 鈥� previously controlled by S Alam Group 鈥� are among the banks struggling the most. Additionally, Padma Bank and ICB Islami Bank are also failing to meet depositors鈥� demands.
These banks have faced severe liquidity shortages over the past couple of years, largely due to widespread loan irregularities, mismanagement and corruption, all of which have significantly eroded depositor confidence.
Except ICB Islami Bank, the Bangladesh Bank has restructured the boards of the aforementioned banks in recent months to improve their financial condition.
BB officials stated that many individuals were hastily withdrawing their funds from these troubled banks due to unfounded fears of potential closures. Depositors are seeking to move their savings to better-performing banks. Consequently, many banks have recently experienced a significant influx of deposits.
Visits to several branches of four of the weak banks revealed that while these banks were providing more funds than before, the amounts were still insufficient.
Many depositors were forced to accept minimal payouts ranging from Tk 10,000 to Tk 50,000, far below their demands.
Depositors expressed frustration, with many moving from branch to branch in a bid to retrieve their savings.
Banks were restricting depositors from withdrawing money at branches other than where their accounts were originally opened.
Banks鈥� officials and representatives from the central bank have both confirmed the difficulties these institutions were facing in repaying depositors.
Social Islami Bank acting managing director, Mohammad Forkanullah, stated on Monday that the bank was working to provide depositors with their funds based on their specific needs through negotiations.
He expressed optimism that the situation would improve in the coming days, as new deposits had begun to flow in.
A number of depositors shared their experiences, highlighting the dire situation.
Shazib Hasan, a private sector employee, shared his ordeal, stating that despite having Tk 10 lakh in his First Security Islami Bank account, he was only offered Tk 20,000 after a week of attempts.
Retired government officer Wasim Ahmed faced similar difficulties with Union Bank, where his Tk 20 lakh fixed deposit remained inaccessible.
The Bangladesh Bank has recently provided about Tk 2,500 crore in liquidity support through inter-bank money market, guaranteed by the central bank, to four of these troubled banks 鈥� First Security Islami Bank, Social Islami Bank, Global Islami Bank and National Bank.
This support is intended to ease the banks鈥� liquidity crisis and ensure that the depositors received their money.
BB spokesperson Husne Ara Shikha confirmed the liquidity support given to the banks.
She also advised that depositors, who are still unable to withdraw their funds, should file complaints with the BB鈥檚 Financial Integrity and Customer Services Department for resolution.
The eight banks have been suffering from a combined negative current account balance of Tk 16,000 crore with the central bank.
The root cause of the crisis stems from rampant loan irregularities, mismanagement and lack of governance during the tenure of the recently ousted Awami League government.
S Alam Group, with support of the Awami League government, allegedly withdrew about Tk 2 lakh crore from the banking system.
The central bank has been extending support to the troubled banks of S Alam group since December 2022, though concerns remain over the long-term stability of the financial system.
These banks were restructured by the central bank after the fall of Awami League government on August 5.
