National Bank is set to receive Tk 10,000 crore in liquidity support from state-owned Sonali Bank as part of efforts to overcome its financial difficulties and restore normal banking operations. Bangladesh Bank will act as the guarantor for the loan, which is expected to be disbursed in several instalments. A substantial portion of the funds is intended to help repay depositors and meet their withdrawal requests.
The development was reported by sources at Bangladesh Bank on Monday, 12 October.
According to several sources, National Bank had initially sought Tk 20,000 crore in financial assistance from the central bank to address its liquidity problems. However, the proposed support has been reduced to Tk 10,000 crore. Under the arrangement, Bangladesh Bank will not provide the money directly to National Bank. Instead, it will guarantee the loan extended by Sonali Bank.
The proposed arrangement is intended to provide National Bank with additional liquidity at a time when its financial difficulties have raised concerns about its ability to meet depositors’ demands. The funds are expected to help the bank manage cash requirements and facilitate the repayment of money owed to customers.
Sources familiar with the matter said Bangladesh Bank wanted to give the financially troubled lender an opportunity to recover from difficulties linked to past irregularities and its weakened financial position. However, the success of the initiative will depend on how effectively the funds are managed and whether the bank can restore confidence among its customers.
Depositors to begin withdrawing money on 15 October
The planned financial assistance comes as National Bank prepares to resume the repayment of depositors’ money and restore its regular services.
Recently, the bank’s chairman, Professor Melita Mehjabeen, and its acting managing director met Bangladesh Bank Governor Md Mostakur Rahman. According to sources familiar with the meeting, instructions were given to begin returning depositors’ money from 15 October.
National Bank has since started preparations to process withdrawal requests. Applications have been accepted from Sunday, 11 October, and the process is scheduled to continue until Wednesday, 14 October. Depositors have been informed that they will be able to withdraw their money from Thursday, 15 October.
Professor Mehjabeen said all branches and automated teller machines (ATMs) were scheduled to become operational from 15 October. The bank is collecting information about customers’ withdrawal requirements at its branches to help arrange the necessary cash.
She also said that, from 20 October, customers would be able to receive their money without having to submit an application in advance. The announcement indicates that the bank intends to make the withdrawal process more accessible as it moves towards resuming normal operations.
The arrangements are expected to be particularly important for customers who have been waiting to access their savings. For banks facing liquidity pressures, meeting withdrawal requests while maintaining sufficient funds for routine transactions can be a significant operational challenge.
Bank hopes to meet demand using its own funds
Professor Mehjabeen said many depositors were not currently seeking to withdraw their money. As a result, the number of withdrawal applications received so far had been relatively low.
She added that National Bank was preparing to restore normal banking services and was assessing the amount of cash required to meet customers’ requests.
According to the chairman, the bank would not need assistance from Bangladesh Bank if it could satisfy withdrawal demand using its own available funds. Cash management was being arranged according to the applications received, she said.
However, she added that Bangladesh Bank had assured the lender of support if the need arose.
This suggests that the immediate requirement for external assistance will depend partly on the volume of withdrawals and the bank’s ability to mobilise its own resources. If demand increases sharply, the availability of additional funding could become more important in ensuring that customers can access their deposits without disrupting other banking operations.
Restoring confidence remains a major challenge
The proposed Tk 10,000 crore loan could provide National Bank with significant short-term liquidity support. Nevertheless, additional funding alone may not be enough to resolve the underlying problems that have contributed to its financial difficulties.
The bank will also need to manage its assets and liabilities carefully, maintain adequate liquidity and strengthen financial discipline. Effective oversight and transparent management of the proposed loan will be important in ensuring that the funds serve their intended purpose.
Bangladesh Bank’s role as guarantor is central to the proposed arrangement, while Sonali Bank is expected to provide the actual loan. Details of the disbursement schedule, repayment conditions and other terms of the arrangement have not been disclosed in the information available.
For depositors, the immediate concern will be whether the announced withdrawal arrangements are implemented as scheduled and whether they can access their money without further difficulties. The bank’s ability to meet these commitments could influence customers’ confidence in its services.
The planned support therefore represents an important step in National Bank’s efforts to address its liquidity problems. Its longer-term recovery, however, will depend on the effective use of funds, sound financial management and sustained efforts to rebuild trust among depositors.