After the Farmers Bank fiasco, banks are seeing a steep decline in liquidity as clients have withdrawn deposits.
Between December 2017 and March 2018, banks have lost nearly Tk 10 billion in deposits, according to latest figures by the Bangladesh Bank.
In December, deposits in banks stood at Tk 9,261 trillion, which dropped to Tk 9,252 billion in March this year.
The Bangladesh Association of Banks (BAB) says the Farmers Bank incident has left a dent on the financial sector’s credibility.
“Several government agencies have withdrawn their deposits with private banks after the Farmers Bank incident, which has left some of the banks with liquidity crisis. But the rest have enough liquidity,” BAB President Nazrul Islam Mazumder told Bangla Tribune.
Amid a steep decline in deposits in the three months, loan disbursements have grown by Tk 251.27 billion, according to central bank data.
In December, banks disbursed loans worth Tk 8,444 billion with an access liquidity of Tk 971.22 billion.
Loan disbursement in March rose to Tk 8,695 billion but access liquidity dropped by Tk 210 billion standing at Tk 768.88 billion.
According to central bank statistics, access liquidity in December 2016 was at Tk 1,259.51 billion.
Analysts attribute the liquidity crisis to aggressive loan disbursement by several private banks, including the troubled Farmers Bank.
Bankers, however, blamed it on the Bangladesh Bank’s latest directives to cut credit outflow.