National Bank to overcome liquidity crisis within two months: Chairman
National Bank Ltd, a troubled private commercial bank, will be able to normalise operations within the next two months after overcoming the ongoing liquidity crisis, said its new Chairman Abdul Awal Mintu.
Speaking at a press conference at the bank's headquarters in the capital today, he urged depositors to remain patient, highlighting strengthened efforts in loan recovery, foreign trade, and remittance earnings as key measures to mitigate the liquidity strain.
Additionally, the bank has already received Tk4,000 crore in liquidity support from the central bank, which will be used to honour depositors' cheques, Mintu said.
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He also mentioned that the bank, once a leading remittance earner, has reactivated its overseas branches to boost remittance inflows and restore its previous standing.
Explaining the cause of the liquidity crisis, he attributed it to a loss of confidence among depositors, leading to increased withdrawals. Additionally, high inflation has resulted in lower savings, with many depositors liquidating their fixed deposits to cover daily expenses, further contributing to the liquidity pressure.
However, he reassured that National Bank, one of the largest private banks in the country, will never reach a point where it cannot repay depositors.
Mintu also mentioned that the bank's directors are considering recapitalising the institution to address the capital shortfall.
The bank's Managing Director Touhidul Alam Khan said that around Tk900 crore in default loans were recovered over the last 10 months ending in October this year and expressed hope that an additional Tk400 crore would be recovered by the year-end.
On 20 August, the Bangladesh Bank dissolved the board of directors of the National Bank due to numerous irregularities, severing its indirect ties with the S Alam Group, a conglomerate closely linked to the ousted Hasina government.
The bank, which had been controlled by the Sikder family for over a decade, was taken over by the S Alam Group in 2023.
The Bangladesh Bank has formed a new seven-member board for the bank, which includes shareholder director and BNP Vice-Chairman Abdul Awal Mintoo, who is now the chairman.
National Bank incurred a staggering loss of Tk1,768 crore in the first nine months of 2024, compared to Tk1,134 crore in the same period last year, according to a stock exchange filing.
On a solo basis, its net operating cash flow per share decreased further to a negative Tk11.15 in the September quarter, as against a negative Tk1.53 in the same period in 2023.
