Islamic banks, instead of borrowing, repaid the Bangladesh Bank Tk 590 crore on Thursday – the third day after the introduction of the "Islamic Banks Liquidity Facility" –  by the central bank bringing down their net borrowing as liquidity support to Tk 4,657 crore.

In the first two days, five lenders – Islami Bank, Union Bank, Social Islami Bank, First Security Islami Bank and Global Islami Bank – borrowed Tk 5,247 crore under the central bank initiative aimed at aiding Shariah-compliant banks with liquidity support for a short-term of 14 days, reports The Business Standard.

Insiders, however, said several Islamic banks still suffer liquidity stress owing to a deposit withdrawal spree.

"In the last few days, some corporate deposits have been withdrawn from our bank, causing a rapid fall in our liquidity. In contrast, many small customers have made fresh deposits," said a treasury head of an Islamic bank that borrowed a significant amount from the Bangladesh Bank liquidity facility.

Wishing anonymity he said, "We are trying our best to provide customers with better services now. Our branch networks are performing well."

Mosleh Uddin Ahmed, managing director and chief executive officer of Shahjalal Islami Bank Limited said, "We have a surplus liquidity of Tk 3,200 crore, which is why we don't need the central bank's support."

"Moreover, we have provided loans of around Tk 2,000 crore for different short-terms to other banks in recent times," he added.

Bd-pratidin English/Golam Rosul