August 12th 2024.
According to a recent media report, businesses in Bangladesh are facing a difficult financial situation due to a limit on cash withdrawals set by the central bank. The limit, originally set at Tk 1 lakh, has now been increased to Tk 2 lakh per account in light of ongoing uncertainty in the country following the fall of the Sheikh Hasina-led government.
This decision was made by the Bangladesh Bank amidst concerns for security, as the police force is still not fully operational after clashes with students during widespread protests against the government's quota system in jobs. Interim Finance and Planning Adviser Salehuddin Ahmed has also stated that this limit on cash withdrawals is necessary given the current situation.
The Daily Star newspaper reported that businesses, especially those that primarily deal with cash transactions, are concerned about the potential impact of this cash crisis and the continued restrictions. Former governor of the Bangladesh Bank and current interim government member, Ahmed, has emphasized the importance of restoring the economy and the public's trust in the banking system.
Many business owners have expressed their struggles since the protests began in July, with some facing difficulties in withdrawing more than Tk 1 lakh from their accounts. This has disrupted the normal pace of business and has forced many transactions to be conducted through bank-to-bank transfers or cheques. While some businesses can manage with these alternatives, others who rely on cash payments are facing significant challenges.
The managing director of National Polymer Group, Riad Mahmud, has stated that he believes this situation will have a negative impact on business if it persists, but that it should not cause major disruptions if it is resolved quickly. However, for many daily wage earners, this situation is causing great hardship. Some business owners are unable to pay their workers in full due to the limited cash flow, which is causing further strain on these employees.
It is reported that over 230 people have been killed in the violence that has erupted in Bangladesh since the fall of the Hasina government. In response, an interim government has been formed and Nobel laureate Prof Muhammad Yunus has been sworn in as its head. The government has announced its portfolios and is working towards restoring stability and trust in the country.
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