Yunus Government Prints Additional 2,500 Crore Taka for Two Banks

Economic Desk

Bangladesh Bank has approved an additional 2,500 crore taka in liquidity support for Social Islami Bank and First Security Islami Bank, both of which are facing liquidity crises. The interim government led by Dr. Yunus has authorized the printing of this money.

On Thursday, March 13, Bangladesh Bank Governor Ahsan H. Mansur approved the liquidity support. This information was confirmed by sources within Bangladesh Bank.

Shahriar Siddique, Director and Assistant Spokesperson of Bangladesh Bank, stated that Social Islami Bank will receive 1,500 crore taka, while First Security Islami Bank will receive 1,000 crore taka as direct liquidity support. This is high-powered money, meaning new money is being printed. The liquidity support is being provided without collateral.

With this additional 2,500 crore taka, Bangladesh Bank has now printed a total of 29,410 crore taka to support struggling banks.

Earlier, Social Islami Bank received 5,500 crore taka, and First Security Islami Bank received 6,500 crore taka in loans. Additionally, National Bank received 5,000 crore taka, Union Bank 2,000 crore taka, Bangladesh Commerce Bank 200 crore taka, ICB Islamic Bank 10 crore taka, Global Islami Bank 2,000 crore taka, Exim Bank 8,500 crore taka, and AB Bank 200 crore taka.

Previously, Governor Ahsan H. Mansur had stated that no new money would be printed to lend to banks. However, he could not maintain this stance. Due to the deepening crisis in the banking sector, six banks were provided with 22,500 crore taka in loans last November. In January, an additional 4,910 crore taka was disbursed, and now, on Thursday, another 2,500 crore taka in support was approved.

At a press conference in November 2024, the Governor had said, “I had stated that we would not print money. However, I have temporarily deviated from that position, not entirely. The amount of liquidity we provide to struggling banks will be offset by raising an equivalent amount from the market through bond sales.”

He further explained, “We will provide money with one hand and withdraw it from the market with the other. Therefore, the process cannot be called full-fledged money printing. The liquidity situation in the market will remain stable.”

Press Secretary Shafiqul Alam had described this approach as “reservoir economics,” likening it to water entering and exiting a reservoir.

Following the political changes on August 5, 2024, reforms began in the banking sector. After the change in power, the S. Alam Group lost control of the boards of seven banks, including these two.

After Governor Ahsan H. Mansur took office, liquidity support to banks controlled by the S. Alam Group was halted. Since then, Islamic banks have faced severe liquidity crises. Rumors spread by certain individuals on YouTube, claiming that banks would shut down, caused panic among depositors, leading to a surge in withdrawals from Islamic banks and putting immense pressure on their liquidity.