Monirul Alam of DOT
A reasonable rise in demand for cash ahead of four-day closure of banks on multiple occasions of 11th parliamentary polls, weekend leaves and annual bank holiday has pushed up the call money rate this week temporarily.
Witnessing account say both the business and individual clients have rushed to respective bank branches in the city for withdrawal of cash in an apparent preparation for ordinary expenditures ahead of the occasions.
Besides, general expenditure, approved by the Election Commission for legislative candidates, has also added a pressure on banks to mobilize extra cash to fulfill clients’ demands.
Banks and financial institutions suffering from liquidity crisis have mobilized cash by borrowing from Bangladesh bank through repo and other banks on short notice, which called call money.
According to Bangladesh Bank (BB), state-owned Sonali and Rupali banks have lent money to two local banks and one financial institution at 4.50 percent and 5.00 percent respectively on Wednesday. The day’s lowest rate of lending was the same.
On the previous working day (December 24), the highest and lowest rates of lending were 5.00 percent and 3.50 percent respectively.
“We have managed a long queue of clients, who flocked to this branch bank early in the morning for withdrawal of cash,” said Rafiqul Hassan, senior officer of Agrani bank’s Press Club branch, yesterday.
EBL’s Motijheel branch retail banking manager Md Abu Kawsar said that the transaction was a bit higher than other days.
He said the turnout of both the business and individual clients were higher.
He said alternate sources like ATMs (Automated Teller Machine) and credit cards will also be used during holidays.
Commenting on the high trend of cash withdrawal and the upward trend of call money rate, former Research Director of Bangladesh Institution of Development Studies Dr Zaid Bakht said, “It is a mismatch between demand and supply.”
“This is temporary,” he said.
Our time is a news portal