Agrani Bank’s approved dollar reserve capacity is 52 million or 52 million dollars. Even after paying the import duty, the bank can keep this amount of dollars as its own. However, central bank statistics show that the state-owned commercial bank currently has no dollars to service its liabilities. On the contrary, the deficit exceeded 256 million dollars. And that is met by breaking the dollar as customers. Agrani Bank is also not able to pay the Letter of Credit (LC) liability on time due to the crisis. Delay in payment of LC liabilities has become a regular occurrence of the bank. The situation in private sector Exim Bank is almost the same. Although the Islamic style bank has a dollar capacity of 53 million, there is no surplus dollar at the moment. On the contrary, there is a deficit of 88 million dollars.
The situation of Agrani or Exim Bank is now similar to that of most banks in the country. According to the data of Bangladesh Bank on October 25, at least 20 banks of the country do not have any dollars to meet their LC liabilities. These banks have fallen into deficit while paying the import liabilities. Even with the dollars collected from remittances and export earnings, they are unable to pay off their import liabilities and foreign debts of their customers. Because of this, banks have almost stopped opening new LCs for imports. Many banks have also stopped opening LCs for daily necessities including food. The few banks that still have dollars are dwindling. And due to this crisis, the interbank foreign exchange market has become almost ineffective.
Meanwhile, due to the dollar crisis, many banks in the country are unable to pay the LC liabilities on the due date. There is a delay of one month in payment of some liabilities. In this situation, the image of the banking sector of Bangladesh is being undermined by the foreign banks that have guaranteed LC. Many foreign banks have now started reducing their credit lines for Bangladesh.
Bank executives say that the existing dollar crisis situation is dire. But the policy makers do not understand the gravity of the situation. Every day some bank defaults on LC liabilities. Banks’ dollar deficit is also increasing. As export earnings and remittance flows decline, the dollar crunch will intensify. Foreign banks may stop taking Bangladesh LCs as the banks fail to repay LC liabilities. Top executives of at least five banks in the country have said almost the same thing. However, none of them agreed to speak by name.