Depositors Struggling to Withdraw Money Despite Having Funds in Banks

A year has passed since the political transition, yet banking transactions have not returned to normal. Many depositors of several banks are still unable to withdraw money even when urgently needed. The central bank states that transactions will soon be normalised; however, economists believe that attempting to resolve the crisis using government funds without taking strict action against loan defaulters will not bring positive results.

Monir Hossain is among those who deposited their savings in a bank but are now unable to withdraw their own money. His suffering is not isolated; around 9.2 million customers of five Sharia-based Islamic banks—affected by long-term financial irregularities, internal weaknesses and massive loan defaults—are facing the same crisis. These banks were recently merged to form the Consolidated Islamic Bank.

According to the latest updated report of Bangladesh Bank, more than Tk 18 lakh crore in loans were disbursed in the banking sector up to last September. Among these, nearly Tk 6.5 lakh crore has turned into defaulted loans, amounting to about 36 per cent of the total distributed loans. Out of this, 76 per cent of the loans of the Sharia-based banks—Social Islami, Global Islami, First Security, Union and Exim Bank—are defaulted, totalling around Tk 1.5 lakh crore.

Amid the growing frustration of depositors regarding the future of their savings, the central bank claims that the withdrawal process will soon become normal, though the full process may take around two years.

Arif Hossain Khan, spokesperson of Bangladesh Bank, said, “When the Tk 20,000 crore of repaid capital arrives, customers will receive their money. It will not take too long. The main obstacle was that the bank could not be formed earlier. As we have already transferred the bank’s licence, it is now time-consuming. There are some technical issues, but no major legal complications.”

A former chief economist of Bangladesh Bank stated that returning depositors’ money is the biggest challenge. He expressed doubt about how much relief the proposed government investment of Tk 35,000 crore will actually bring.

Dr Mustafa K Mujeri, Executive Director of the Institute for Inclusive Finance and Development, said, “The main purpose of depositing money is that people can use it when needed. That is why they save and keep deposits. Many cannot even withdraw two thousand taka. Such suffering of depositors is unacceptable and is weakening the banking sector even further.”

Dr Shahadat Hossain Siddique, Professor of Economics at the University of Dhaka, said, “Banks run on trust. If normal activities cannot be maintained, public confidence cannot be restored. The money the government spends to stabilise the banks may remain only as a figure, as its full recovery in future is uncertain.”

The central bank, however, has assured that depositors will continue to receive profit on their deposits until the refund process is completed.

Khaborwala/SS