Jobless people being forced to withdraw money from banks during COVID-19 pandemic
Abu Sazzad: The amount of currency outside in the country’s banking system increased by 24.69 percent in the last one year due to acute money crisis of the jobless people as well as the middle-class people.
The vulnerable group of people is being forced to withdraw their deposited money to meet their unavoidable expenditure during COVID-19 pandemic.
According to Bangladesh Bank (BB) data, the amount of currency outside bank was Tk 192,3844 crore as on June this year while it was Tk154,2870 during the same period of the its previous year 2019. Riding on the central bank data, it may be said that currency outside banks increased over Tk 38,000 crore in the last one year.
Bankers said, the banking sector is prevailing such situation because people had withdrawn their deposited money due to financial crisis.
But, experts pointed out that corruption is the major reason behind increasing the currency outside of the bank because illegal money holders are deliberately hiding their money.
Industry insider said, during the beginning of the current year, a section of people feel comfortable to keep money in hands in instead of depositing money in banks during the ongoing crisis. At the same time, another section of people are withdrawing their bank savings to survive after job loss.Besides, another section of people might have preferred keeping cash in handsto avoid visiting banks regularly for money during this coronavirus pandemic.
However, experts said, the situation may not fuel inflation much but will squeeze the banks’ lending capacity, hampering the implementation of the stimulus packages worth around Tk 1.03 lakh crore announced by the Prime Minister Sheikh Hasina for revamping economy hit hard by the outbreak of coronavirus.
Meanwhile, many commercial banks are facing acute liquidity shortage during this coronavirus pandemic. The capital shortfall of 13 banks stood at Tk 25,904 crore recently. The banking sector vulnerability had reached such a position that now many banks are forcing to minimize their cost through terminating bank officials.
A senior BB officials said, money outside the banking system started rising in March this year and jumped in April and May this year growing by Tk 20,400 crore in two months as the coronavirus outbreak intensified in the country.
Now, stakeholders need immediate financial assistance to resume the business and economic activities. Considering this, banks will disburse more loan in this connection under the guideline of the top policy makers in the country. So, it is easily predictable that in the upcoming days, currency outside banks would increase to meet the local stakeholders
DrSelimRaihan, Executive Director of South Asian Network on Economic Modeling (SANEM), the jobless people had withdrawn their deposited money from the bank for maintaining their regular expenditure during the ongoing crisis period.
After the outbreak of coronavirus on March 8 this year, the country went into a shutdown for around two months till May 30, leaving a large number of population jobless as economic activities came down to a very minimum level, he pointed out, bb official added.
Although the government lifted the shutdown, normal business and economic activities are yet to be restored as the spread of the deadly flue remained out of control.