• Thursday, Mar 30, 2023
  • Last Update : 10:24 am

Banks face cash withdrawal pressure ahead of Eid

  • Published at 03:55 pm May 30th, 2019
Filev photob of Banks face unusual withdrawal pressures ahead of Eid vacation yesterday Dhaka Tribune

Like every year, expatriates sent large sums of money to their relatives before Eid

Banks are facing huge rush of clients withdrawing cash ahead of the Eid-ul-Fitr holidays starting from June 4.

Over the last three days, banks in the capital were packed with clients withdrawing money and remittances.

Almost every day last week, at least Tk400 crore was withdrawn from Dutch-Bangla Bank’s ATM booths, said an official of the bank.

Like every year, expatriates sent large sums of money to their relatives before Eid.

According to Bangladesh Bank's latest data, the country received $1.35 billion in remittances in the first 24 days of May.

While visiting different bank branches in the capital on Thursday, it was found that bank officials were facing difficulties in handling the large number of clients waiting in long queues at cash counters for transactions.

Sonali Bank (local office) General Manager Nizamuddin Ahmed Chowdhury said: “Our branches were packed with customers completing transactions ahead of Eid.”

“For the purpose of business and personal needs, clients are withdrawing huge amounts of cash before Eid. Many companies and institutions will pay their employees salary and bonuses,” he added. 

Meanwhile, the last working day before Eid will be Monday.

Many people are leaving the capital this weekend after taking leave to celebrate Eid in their hometowns.

So, there was huge pressure from clients at the bank branches  on Thursday.

Rubel Hossain, a businessman, standing at a cash counter of Sonali Bank, said: “I have to pay salaries and bonuses to my employees, so I came to the bank to withdraw cash. I have been waiting in the queue for the last two hours, because of the rush at the cash counter”.

On the other hand, a huge demand for call money ahead of Eid is leading to a liquidity crisis at the banks, which have reduced investment funds and increased the tendency to borrow from the call money market.

Most of the banks are facing cash crisis due to slow deposit growth and lackluster loan recovery.

According to Bangladesh Bank data, inter-bank call money rate was 4.54% (weighted average) on May 21, with the rate remaining above 4% in the past few days.

"Just ahead of Eid, there will be pressure on the call money market. But this pressure will not be bigger than before.

“Besides the call money market, the commercial banks are borrowing from Bangladesh Bank through repo," said Syed Mahbubur Rahman, managing director of Dhaka Bank and chairman of Association of Bankers, Bangladesh.

Repo is a short-term fund that the central bank gives to commercial banks in case of cash shortfalls at the current rate of 6%, while reverse repo is excess money that banks keep with the central bank.

Facebook 50
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail