Cash Crunch Hits Banks Ahead of Eid-ul-Adha

Commercial banks across Bangladesh are facing a shortage of cash supplies ahead of Eid-ul-Adha, as the central bank struggles to meet rising demand due to an insufficient supply of newly printed currency notes.

Bankers said several lenders have been receiving far less cash than requested from Bangladesh Bank over the past week, creating pressure on branch operations and ATM services during one of the busiest cash transaction periods of the year.

According to banking officials, one commercial bank sought Tk580 crore in cash on Thursday but received only Tk120 crore. Another bank reportedly received Tk40 crore against a request for Tk120 crore, while several others obtained less than half of their required amounts.

Senior officials at private banks said the central bank is currently supplying only around 30 to 40 percent of the cash requested by banks.

“This situation has continued for the last seven to eight days,” a senior banking executive said, adding that banks have been encouraged to promote electronic transactions to reduce pressure on physical cash demand.

Bankers said cash withdrawals usually increase sharply before Eid-ul-Adha as people withdraw money for cattle purchases, festival shopping, and employee bonuses and allowances.

A managing director of a private commercial bank said demand for cash intensifies particularly around cattle markets during the Eid season, putting additional strain on branches and ATM booths.

Central bank officials, however, said the country is not facing any liquidity crisis. They attributed the situation mainly to a shortage of newly printed notes.

Officials said around Tk4,000 crore in fresh currency notes is expected to be supplied from the mint to Bangladesh Bank. The central bank had earlier requested Tk16,000 crore worth of new notes ahead of Eid, but shortages of paper and printing ink reduced expected production to around Tk8,000 crore.

Bangladesh Bank is also withdrawing damaged notes from circulation while prioritising the supply of higher denomination notes, which see greater demand during Eid-ul-Adha.

Officials further said approximately Tk15,800 crore worth of old-design banknotes remain stored at the Security Printing Corporation, but the central bank has so far been reluctant to release them into circulation.

According to official data, the country’s total currency stock stands at nearly Tk24 lakh crore, while demand for printed cash exceeds Tk3.2 lakh crore.

Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan said banks would receive cash supplies gradually based on demand.

“The newly printed notes will be distributed among banks in phases. If any bank receives less cash initially, the remaining demand will be met later,” he said.

Meanwhile, bankers warned that public concerns over cash shortages could damage confidence in the financial sector.

“If customers believe banks are facing liquidity problems, it may trigger unnecessary panic at a time when confidence in the banking sector is already sensitive,” a private bank chief executive said.

Bankers also argued that the Eid-related surge in cash demand should have been anticipated earlier to avoid pressure on the banking system during the festival season.