Bangladesh Bank has opened short-term liquidity support to the Islamic banks that have been hit by withdrawal pressure amid a barrage of reports on suspicious lending.
To aid liquidity management and deepen the financial system will be the objective of the Islamic Banks Liquidity Facility, the central bank said in guidelines issued on the new facility on Monday.
Islamic banks with investments in the government’s Sukuk, a Shariah-compliant debt instrument, will be eligible to avail of the facility for 14 days, according to the guidelines.
The profit rate for the facility will be the three-month Mudaraba Term Deposit Receipt rate of the respective bank, reports bdnews24.com.
As long as Islamic banks do not operate on the interest-based banking system, they do not use the central bank’s lending facility for ordinary banks in need of short-term liquidity support.
Now they will be able to get the central bank’s support through the new facility.
As many as 10 Shariah-based banks are operating in Bangladesh. Other banks also have Islamic products.