POBNEWS24,Dhaka Aug 6, 2021 : Banks have no place to invest in Corona. With this, the money announced by the government has been added to the bank. On the other hand, the amount of remittances has been increasing since the beginning of Corona. As a result, lazy money has accumulated in the banks. At present, about two and a half lakh crore rupees are lying idle in the banks.
Bangladesh Bank has decided to withdraw this excess liquidity from the banks. The process of withdrawing money from the bank through ‘Bangladesh Bank Bill’ will start from next Monday. To that end, Bangladesh Bank yesterday issued a letter to commercial banks to participate in the ‘Bangladesh Bank Bill’.
Bangladesh Bank’s letter said that in the interest of maintaining the stability of the currency market, it has been decided to auction the Bangladesh Bank Bill by controlling excess liquidity in the market. In Bangladesh, the bank will sell the bill to a commercial bank and withdraw the extra money from the market. In contrast, the banks will get profit. However, the central bank has not yet decided exactly how much money will be withdrawn through this.
According to a press release issued by the Central Bank, the auction of Bangladesh Bank Bill for a period of 7 and 14 days will be held on Monday august 9 at Bangladesh Bank. All individuals and institutional investors residing in Bangladesh including banks and financial institutions will be able to submit bids in this auction. Any bank and financial institution operating current account with Bangladesh Bank including banks and financial institutions can submit bids on behalf of its own or their individual or institutional investing customers.
It further said that for every 100 face value, the bid has to be submitted to the MI module installed in Bangladesh Bank by 12:30 pm in an electronic process quoting the total face value including the proposed purchase price of the bill at a discount. The auction will be held on the same day and will be announced by 2 p.m. Detailed procedural instructions for participating in the auction have already been communicated to various banks and financial institutions.
Earlier, on March 29, 2016, the money was withdrawn from the banks in this manner. Earlier, in its monetary policy announcement for the current financial year on July 29, Bangladesh Bank said it would lift the excess liquidity bubble in the financial sector. The central bank will not hesitate to adopt a new policy if inflation or asset prices rise due to excess liquidity.
Apart from this, the expatriate income in Corona has increased a lot. Deposits in banks have increased. It has about two and a half lakh crore rupees deposited in the banks. Of this, about 60 thousand crore rupees is absolutely lazy. The rest of the money has been used to buy various bills and bonds. There are also allegations that many banks are abusing lazy money.
According to Bangladesh Bank sources, there is a surplus liquidity of Tk 231,000 crore in the banking sector till last June. Of this, 82,500 crore taka are lazy at once. The bank does not get any interest against the lazy money. As a result, most banks are now reluctant to take deposits. After the onset of the corona virus, Bangladesh Bank last year provided various policies to increase liquidity in the market, but the demand for loans did not increase. That’s why lazy money is growing.
Generally, after saving cash deposit rate (CRR), banks are lazy to the tune of taka 10,000 to taka 15,000 crore taka. However, after the start of Corona, at the end of June 2020, it was 23,600 crore. Taka
According to the recently announced monetary policy statement of Bangladesh Bank, the additional reserves of CRR have almost tripled to over Taka 62,000 crore in the last one year. The amount of surplus liquidity has increased by about Rs 92,000 crore as compared to June last yea
According to the Banking Companies Act, a portion of the total liability of each bank has to be deposited in Bangladesh Bank as statutory. Of this, 4.5 per cent is currently in cash, which is considered as CRR. Before the start of Corona, there was an obligation to keep 5 and a half percent CRR last year as well. However, the statutory liquidity or SLR against various bills and bonds has to be kept at 13 percent as before.
With the exception of the idle portion of the CRR in surplus liquidity, the rest of the money remains as investment in treasury bills and bonds. This money was given to the government as a loan. Interest rates have come down a lot as there is a lot of money in the banks. The average interest rate on deposits has come down to 4.13 percent. The average interest rate on loans has come down to 7.33 percent.
