The Bangladesh Bank (BB) yesterday extended an additional Tk 2,500 crore in emergency liquidity support to Social Islami Bank and First Security Islami Bank without any security to help them address financial crises.

Of the sum, Tk 1,500 crore was provided to Social Islami Bank and Tk 1,000 crore to First Security Islami Bank for a tenure of 90 days, central bank officials said.

Mohammad Shahriar Siddiqui, a director and assistant spokesperson of BB, told The Daily Star that the Shariah-based banks had applied for liquidity support to meet their emergency needs earlier.

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3 banks get Tk 12,500cr in emergency funds

The liquidity support was approved yesterday, he said.

The fresh injection of funds into the ailing banks comes more than three months after the central bank provided Tk 22,500 crore to six crisis-hit banks without any security.

Of the sum, Tk 1,500 crore was provided to Social Islami Bank and Tk 1,000 crore to First Security Islami Bank

This development took place in November after the central bank had restructured the boards of 11 troubled banks following the political changeover in August last year.

At that time, Social Islami Bank received Tk 4,000 crore and First Security Islami Bank Tk 5,500 crore.

It also reflected a shift in the stance adopted by the BB governor, who had earlier declined to provide fresh liquidity to scam-hit banks, citing concerns that it would stoke already elevated inflation.

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Islamic Banking in Bangladesh

The six crisis-hit banks are yet to repay the funds to the central bank.

After the political changeover last year, the central bank provided money to troubled banks with depositors' interests in mind and to prevent a bank run, which occurs when many customers rush to withdraw their funds from a lender, BB officials said.

Under the Awami League regime, the central bank provided liquidity support to some banks as per their demand, but there was virtually no accountability in the process.

Besides Social Islami Bank and First Security Islami Bank, Union Bank, Global Islami Bank, National Bank and Exim Bank had received central bank liquidity support in November last year.