The central bank's policy support is helping banks manage their funds, despite higher withdrawal pressure on cash even as deposits shrink in the aftermath of coronavirus outbreak.
People are now withdrawing cash from the banks using both debit and credit cards along with cheques to meet their emergency needs, though deposit mobilisation remains poor, bankers said.
They said a section of clients now prefers transactions through alternative delivery channels to avert possible health hazards, they explained.
Such channels cover the operations of ATMs (Automated Teller Machines), POS (Point of Sale), e-Payment Gateway and Mobile Financial Services (MFS).
All banks have already been asked to ensure transactions through alternative channels round the clock during the nationwide lockdown until April 25.
"We've no liquidity problem right now, thanks to the policy support from the Bangladesh Bank," Abdul Halim Chowdhury, managing director (MD) and chief executive officer (CEO) of Pubali Bank told the FE on Monday.
He said most of the banks are now managing their funds efficiently.
But a section of banks with smaller portfolios are encountering liquidity problem because of higher cash withdrawal against negligible deposits, according to Mehmood Husain, MD and CEO of NRB Bank Limited.
"Slower closing of the ongoing loan portfolios has also pushed up the liquidity pressure on the banks," the senior banker noted.
The banks are now free to use more than Tk 190 billion as loanable funds after the central bank slashed the cash reserve requirement (CRR) by 150 basis points to 4.0 per cent from 5.50 per cent earlier.
Talking to the FE, a BB senior official said the central bank has relaxed the CRR rules in two phases recently to allow the banks to ramp up investments in different productive sectors so that economic activities remain unaffected.
"We've also cut repo rate by 150 basis points to 4.25 per cent from 5.75 per cent to help the banks in managing their funds efficiently," the central banker noted.
He also said such policy support will help keep the domestic demand steady despite the outbreak of the deadly virus that has killed over a hundred people since the first confirmed case was detected on March 8.
Some banks have already availed repo facility from the central bank in the recent days considering their possible liquidity requirements during the shutdown period in force since March 26.
Currently, total outstanding of repo operations stood at around Tk 70 billion, according to the central bank's latest statistics. The amount covers overnight, 7-day, 14-day and 28-day tenors of the repo facility.
"We've kept open the repo facility and inter-bank call money market on a limited scale during the public holidays to minimise possible liquidity shortage of the banks," another BB official told the FE.
He also said the overall transactions in the inter-bank call money market have witnessed an upward trend in recent days indicating the dire needs of some cash-starved banks.
"We're ready to provide liquidity to the banks against their securities using our different windows to avoid any unwanted situation," the central banker explained.
"The post-Covid-19 situation will be manageable with the policy support of the central bank as well as the government," said Ali Hossain Prodhania, managing director of Bangladesh Krishi Bank.
