Bangladesh Bank yesterday asked banks to provide funds to depositors based on their withdrawal demand such that the confidence in the banking sector remains unbroken.
After some misinformation was spread on social media platforms about the banking sector, jumpy depositors withdrew their money from banks, Selim RF Hussain, chairman of the Association of Bankers, Bangladesh told reporters after a meeting with the central bank.
For all latest news, follow The Daily Star's Google News channel.
"That amount is now coming back," said Hussain, also the managing director of Brac Bank.
Adequate cash support will be provided to banks facing liquidity stress so that they can smoothly return depositors' money, BB Governor Abdur Rouf Talukder told bank MDs in the meeting, said people involved.
The central bank has instructed banks to take all measures to restore depositors' confidence, said Syed Mahbubur Rahman, the MD of Mutual Trust Bank.
Banks will be provided with policy and liquidity support, he added.
One bank whose depositors' confidence is shaken is Islami Bank after media reports on largescale irregularities in the bank.
"Islami Bank is now under our surveillance -- keeping money in the bank is completely safe and secured," BB Spokesman Md Mezbaul Haque told a press briefing after the meeting with bank MDs.
The central bank will provide a guarantee to Islami Bank's depositors' money, he added.
Quoting Talukder, a BB official said proper action will be taken against the wrongdoers at Islami Bank identified by the BB investigation team.
BB is now conducting an investigation into Islami Bank for disbursing Tk 7,246 crore this year to nine companies by violating banking rules.
Meanwhile, BB has taken several measures to weaken hundi, an illegal cross-border financial transaction system, to prop up remittance inflows through the official channel, Haque said.
"If under- and over-invoicing can be tackled, the hundi cartel will be weakened," he said.
Over-invoicing takes place when exporters submit an inflated invoice to importers, generating a payment that exceeds the value of the shipped goods to launder money abroad.
Under-invoicing happens when the price of a good on an invoice is less than the price paid. It usually happens when either the importer or exporter wants to reduce a tariff or if the buyer or seller wants to lower their profits to pay less taxes.
The central bank has also asked banks not to drag the process for opening letters of credit to bring in Ramadan essentials, Haque said.
If required, the central bank will provide dollar support to banks so that they can smoothly settle the LCs.
The central bank has recently received allegations that people have to follow lots of rules to deposit money in others' bank accounts.
Banks have been asked to ease the process for deposits of less than Tk 10 lakh, Haque added.
