National Bank Limited, grappling with a liquidity crisis, has requested an additional Tk 10 billion in liquidity support from Bangladesh Bank. The bank had previously received Tk 40 billion from the central bank.
National Bank Chairman Abdul Awal Mintu explained that Bangladesh Bank had initially promised to provide between Tk 50 to 60 billion but only granted Tk 40 billion, prompting the bank to seek an extra Tk 10 billion. This additional sum is necessary to meet the bank’s obligations to its clients.
Bangladesh Bank has asked for a detailed account of how the previously provided funds were spent. National Bank is preparing a presentation to clarify this, Mintu added. He also criticized the bank’s previous management, blaming them for corruption, while highlighting that the new administration is taking steps to stabilize the bank.
The bank, which had been under the control of the Sikder Group for over 15 years, is now requesting liquidity support at 10% interest. However, the new request has not yet been approved by Bangladesh Bank.
In November, Bangladesh Bank provided Tk 220 billion in liquidity support to several banks, including National Bank, using printed currency. Other banks receiving support included First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and Exim Bank.
Bangladesh Bank Governor Ahsan H Mansur had initially stated that the central bank would refrain from indiscriminately printing money to stabilize the banks. However, he later backtracked, claiming that the funds were raised through bank bills and not purely by printing money. Some officials, however, argue that this amounted to “money printing,” as the funds collected via bills were far less than what was disbursed to the banks.
Alongside National Bank, Padma Bank has requested Tk 13 billion, and Janata Bank is seeking Tk 100 billion in liquidity support. These requests are still under review by Bangladesh Bank.
A senior official at the central bank noted that continuing to provide liquidity support could increase Bangladesh Bank’s liabilities, resolving short-term issues but potentially worsening long-term problems.
Meanwhile, the Anti-Corruption Commission has filed a case against 29 directors and officials of National Bank for embezzlement under the Awami League’s rule. The accused, including members of the Sikder family, are alleged to have embezzled Tk 4.59 billion through fraudulent paper bills.
After a family feud within the Sikder family, Syed Farhat Anwar was appointed as chairman in December 2023. Under his leadership, talks began about merging National Bank with United Commercial Bank, though this initiative stalled after the fall of the Awami League government. National Bank continues to face a severe liquidity crisis due to loan fraud and irregularities.
Following the change in government, Bangladesh Bank dissolved the existing board, which had been controlled by businessman S Alam from Chattogram. BNP Vice Chairman Abdul Awal Mintu, one of the bank’s founders, was reappointed as chairman.
