Bangladesh Bank (BB) Governor Dr Ahsan H Mansur said on Wednesday that no liquidity assistance will be given to weak and troubled banks by printing money.
However, he said that liquidity assistance will be given to troubled banks through inter-bank transactions and the BB will stand as the guarantor.
The Governor said that all the banks cannot be allowed to suffer because of seven or eight weak banks.
Considering depositors' interests, we want to provide limited liquidity support to weak banks, he said at a press conference after chairing a
meeting of Bangladesh Bank.
Senior BB officials including Deputy Governor Nurun Nahar were present at the press conference held in the conference room of BB.
Dr Mansur said that a lot of money has been laundered from the country through the weak eight banks, causing liquidity crisis in these banks.
"We want to provide limited liquidity support. The government will think about depositors and stand by them," he said.
He said, two lakh crore Taka will be needed to provide full support to overcome liquidity crisis of the weak bank.
But it will increase inflation manifold, he said.
He said, "We want to provide limited liquidity support to the weak banks, through inter-bank transfers, with Bangladesh Bank standing as the guarantor."
These banks had problems for a long time, the depositors knew it, we will look after the interest of the depositors so that they get their money back, said Dr Mansur.
He said, "We will request the depositors not to withdraw all their money. Withdraw as much as you need. Give us some time. We hope the banks will turn around. I want to make one thing clear that the entire banking sector cannot suffer because of seven or eight weak banks."
After taking charge as the Governor on August 20, Dr Mansur said closing banks or printing money was no solution.
