Economy Desk: There are 10 Sharia banks in the country. The liquidity crisis in these Shariah-based banks is lasting. According to a report by Moody’s Investors Service, this situation is due to the decrease in customer deposits and the inability to use most of the support measures provided by the central bank.
In this recently published report of Moody’s, citing the data of Bangladesh Bank, information has been given about the long-term liquidity crisis in Sharia-based or Islamic banks. It has been said that the effect of a liquidity deficit may fall on the credit quality of banks. In this way, the country’s Islamic banks may face problems meeting short-term liabilities. Moody’s is the leading international credit rating agency. Another leading credit rating agency is Fitch Ratings.
The institution also released its assessment of Sharia-based banks in Bangladesh on Thursday. According to the Fitch Ratings report, the excess liquidity of Shariah banks decreased by 66.6 percent, or Tk 982 crore, from July last year to June last year, i.e., in one year.
According to the Fitch report, the short-term liquidity challenge of Sharia-based banks is calculated by calculating the decrease in liquidity coverage ratio, or LCR. In the last six months of 2022, the LCR of Shariah-based banks decreased to 87.7 percent. At the end of 2021, this rate was 188.8. According to Moody’s, in 2022, 10 Islamic banks in the country were able to maintain liquidity according to the law. But after six months, it appears that 4 out of 10 banks have fallen behind in this regard.
Although the six banks were able to maintain liquidity, As per the rules, their excess liquidity was low. According to Moody’s report, people’s spending has increased and savings have decreased due to high inflation in the country for more than a year.
This has reduced the number of deposits in the bank. Apart from this, the interest rates on bank deposits are lower than inflation. All these have had an impact on bank deposits.
