Central Bank to Guarantee Distressed Banks for Interbank Liquidity Support

In a significant move to stabilize the banking sector, the central bank has announced plans to guarantee several distressed banks to facilitate their access to interbank liquidity support. This decision comes as seven banks, facing financial difficulties, have applied for guarantees to secure more than Tk25,000 crore in liquidity from the interbank money market.

The central bank’s intervention is aimed at preventing a potential crisis in the banking system by ensuring that these distressed banks can meet their short-term financial obligations. The guarantees will enable these banks to borrow funds from other banks, thereby maintaining stability in the financial sector.

This measure is part of a broader effort to address the liquidity issues faced by some banks and to restore confidence in the banking system. The central bank’s proactive approach is expected to mitigate the risk of a larger financial instability and support the overall economic health of the country.