Not a frenzied day for banks before they broke for Eid holidays

Banks came under milder than usual strong fund withdrawal pressure ahead of Eid-ul-Azha this year because of the coronavirus pandemic, countrywide floods and job and income losses.

The celebration might not be as festive as it was in the past because of the four-month-long pandemic, which has wiped out millions of jobs and drastically cut people's incomes.

As much as 95 per cent of the people surveyed across the country suffered a loss of income due to the shutdown and social-distancing measures enforced by the government in late March to contain the spread of coronavirus, according to a survey of Brac.

Household income of 51 per cent of the respondents was reduced to zero, while 62 per cent of the low-income earners lost work opportunities. The pandemic left 28 per cent of the respondents economically inactive, it said in June.

The latest flood dealt another blow.

About 37 per cent of the country's total area has been flooded, said AKM Saiful Islam, a professor of the Institute of Water and Flood Management at the Bangladesh University of Engineering and Technology, after analysing satellite images.

People of low-lying areas are the worst affected victims of this natural disaster. Some of them have been waterlogged for over a month.

So the fund withdrawal pressure varied from banks to banks and even branches to branches yesterday, but it was nowhere near the level seen in previous years.

For example, the Karnaphuli branch of Pubali Bank in the capital's Shantinagar area saw more deposit than withdrawal yesterday. On the other hand, another branch of the private lender in Goran witnessed more withdrawal by low-income people.

An employee of the Cantonment branch of state-run Agrani Bank in Syedpur under Nilphamari district said his branch faced moderate pressure. But more customers took out money from the branch in a nearby market.

"A lot of funds were withdrawn," said Md Arfan Ali, president and managing director of Bank Asia, yesterday.

The main branches faced higher transactions compared with other branches, he said. Bank Asia has 129 branches, 3,700 agent banking outlets and 150 automated teller machine (ATM) booths.    

"The manager of our principal branch told me that his officials had to bring money from the central bank at 9:30 pm on Wednesday."

It seems that economic activities are accelerating, he said. "It is a good sign that people are showing more interest in spending."

Normally, people would rush to banks in the last moment during Eid. But this time, the turnout of customers was more spread out as they wanted to avoid a crowded branch for fear of coronavirus contagion, Ali added.

"There was some pressure throughout the day as people withdrew funds to pay for salaries or other expenses," said Syed Mahbubur Rahman, managing director of Mutual Trust Bank, which has 118 branches, 15 sub-branches, 146 agent banking outlets and more than 350 ATM booths.

The number of funds withdrawn was not that high, however.   

In the last two days, about Tk 60 crore was withdrawn from Mutual Trust Bank, a private bank, down from Tk 200 crore to Tk 300 crore during Eid-ul-Azha previously.

This is because people are not leaving the city in droves owing to the not-too-long Eid holiday and discouragement from the government. 

Many people don't have much income because of the pandemic, Rahman said.

Branches of Rupali Bank came under fund withdrawal pressure as people withdrew salaries ahead of the festival, said Md Obayed Ullah Al Masud, managing director of the state-run lender.

The state-run bank lent Tk 34 crore to three customers to help them buy skins of the animals to be sacrificed.

A senior banker of Pubali Banks's branch in Patiya, Chattogram said the presence of customers coming to pull out funds for spending on buying sacrificial animals was much lower in the last two days compared with those in the previous years.

"This is a clear sign that people are financially under pressure. The flow of remittance has not been strong as many remitters returned home after losing jobs."

The branch normally took about Tk 1 crore from the feeding branch of the bank in the run-up to Eid in the past to meet additional demand for cash.

The opposite happened this time. The branch supplied about Tk 1 crore to the feeding branch and ATM booths in the last few days, he added.

An official of South Bangla Agriculture Bank's Abdullahpur branch in Dhaka said there was no rush for fund withdrawal yesterday.

The withdrawal took place much before yesterday. People have also withdrawn funds from ATM booths to avoid the crowd in brick-and-mortar branches, he said. 

For example, the branch injected Tk 20 lakh on Sunday into its ATM booth and yesterday it had to reload as the funds ran out. 

The call money market was stable despite the uptick in fund withdrawal because there is ample supply of liquidity in the market, according to both Ali and Rahman.

On Wednesday, Tk 8,355.68 crore was transacted on the call money market, down from Tk 9,039.61 crore a week earlier and Tk 9,166.72 crore on Tuesday, Bangladesh Bank data showed. 

The pressure in the call money market is largely non-existent nowadays and this has been the case for the last several years.

This is in sharp contrast to the past when call money rate would go up to 50 per cent as people rushed to banks in the last moment to get funds. On Wednesday, the weighted average call money rate was 4.96 per cent, BB data showed.

Meanwhile, some branch-level bankers have criticised the BB order to keep open branches near animal markets because traders don't deposit funds usually. 

Bank Asia would keep six branches open today.

Mutual Trust Bank would keep open its branches in industrial belts as well as those located near animal markets today.