Photo : Collected
Due to the ongoing situation in the country, including soaring prices of commodities and instability in the banking sector, people are withdrawing their money from banks and the stock market. As a result, ATMs are running out of cash, and bank branches are facing a cash crunch. To address this shortage, the Bangladesh Bank has increased the inter-bank foreign exchange transaction band from 1 percent to 2.5 percent. Additionally, limits have been set on the amount of money that can be withdrawn.
Bankers and analysts identify three main reasons why customers are withdrawing money from banks and the stock market. Firstly, in the current situation, the prices of all goods, including essential commodities, have skyrocketed. To meet their daily expenses, ordinary people are withdrawing their savings from banks.
Secondly, since August 5, Awami League leaders, activists, and government officials have been withdrawing money from their bank accounts due to concerns that they might not be able to access their funds in the future.
Thirdly, there is extreme instability in the banking and stock markets. This instability has led ordinary customers to withdraw their money, as they believe their deposits and investments are no longer safe.
According to Bangladesh Bank data, to meet the increased demand for cash, the central bank has printed thousands of crores of taka. Most recently, on August 19, Governor Ahsan H. Mansur took steps to increase liquidity in the foreign exchange market by raising the inter-bank foreign exchange transaction band from 1 percent to 2.5 percent. It is expected that liquidity in the inter-bank foreign exchange market will soon be restored and that exchange volumes will increase rapidly.
Saidul Islam, a customer of Dutch-Bangla Bank Limited, reported not finding any cash at ATMs in the capital’s Eskaton, Mugda Bazar, Rampura, and Madhya Badda area after searching for four consecutive days. He said, “I searched for four days after office hours until 8 pm. but couldn’t find any cash at any branch. I had to buy groceries with money borrowed from a friend.” Expressing his frustration, he said, “I kept my money in the bank to stay safe from danger. Now, during this crisis, I cannot withdraw my money. So today (Tuesday), I have withdrawn 1 lakh taka.”
Shawkat Palash, a customer of UCB Bank, shared a similar experience. He said, “I went to withdraw money from ATM booths of several bank, but there was no money. I went to one booth but couldn’t withdraw money as it was not a card of the designated bank. Fearing that I wouldn’t be able to get money when needed, I withdrew the money from my account.”
A senior official of Dutch-Bangla Bank, speaking on condition of anonymity, told The Daily Messenger that since the political changes in the country, there has been a rush to withdraw cash from banks, creating a cash shortage. To address this, the Bangladesh Bank has banned commercial banks from withdrawing more than Tk 3 lakh in cash.
According to Bangladesh Bank data, the bank had previously imposed a ban on withdrawing more than Tk 2 lakh. Before that, on August 5, the limit was Tk 1 lakh.
The bank also reported a rush to sell shares in the stock market rather than buying them. As a result, due to the lack of buyers, share prices have decreased, and investors at the Dhaka Stock Exchange (DSE) have lost Tk 20,697 crore in just 10 days, from August 10 to August 20.
Messenger/Fameema
