Will banking system in Bangladesh collapse? - page 2.

magneto

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Quote from: Little Mouse on July 03, 2021, 10:14:45 AM

Due to pandemic, there’s lockdown going on here. People are more likely to withdraw fund from Bank while rate of deposit is decreasing now. On a side note, default loan has been alarming here.
I was looking for cash out BDT from mobile banking but I had to look for a long area to find out a mobile banking agent. I felt like I should cash out more money than I need for now because it’s possible that there will be no agent opening their shop.
The same will also happen with the banking system if situation get severe which possibly will be soon. And if the lockdown continues for months, won't bank have hard time maintaining deposit and withdraw?
What do you think? Is it possible that if lockdown continues, banking system will collapse here?

Definitely possible. And these seem to be early signs of an insolvent fractional reserve system.

We have seen this sort of thing happen over and over again. The most recent example would probably be Venezuela, where ATMs are virtually depleted of cash or always in perpetual maintenance, meaning that no one can get out their cash from their banks whilst prices have been skyrocketing.

I certainly would take whatever hedges are available to you. Buying some digital assets, precious metals, or heck even foreign exchange (only if that's the only thing available to you, since themselves are liable to falter) would be a good idea.

Rengga Jati

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Quote from: Gozie51 on July 03, 2021, 10:34:26 AM

You have kept saying here without mentioning your country or location.

Only OP (Little Mouse) can answer this but he seems not interested to let you know. Cheesy

However, you can see these two posts:
1. https://bitcointalksearch.org/topic/m.47661401
2. https://bitcointalksearch.org/topic/m.46893242

He is probably from India. But who knows if he is from Bangladesh or Pakistan.

Quote from: Little Mouse on July 03, 2021, 10:14:45 AM

Is it possible that if lockdown continues, banking system will collapse here?

I don't know what's happening in your country, but lockdown shouldn't last a long time. Although Pandemic in India seems very severe today, it should have an end someday (shouldn't last for months). I am sure the government will do the best to deal with the pandemic. When the virus spread can be lowered at a certain level, the lockdown is probably considered to be over.

Regarding the bank, it is supported by the government and even a vital institution in the country, so shouldn't be collapse. As long as people use the bank, there is no doubt that the bank will always survive. About why deposit is decreasing, while withdrawal is increasing today? It is because most people have urgent needs nowadays. The current situation makes them to use more money, so they must withdrawal their savings. In the other hand, people got difficulty to get income (earn money), so the decreasing.

just_Alice

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I don't think the banking system is at a critical point right now in Bangladesh, from what you've described. They're just probably taking precautions in order to prevent collapse in the future. It's a pretty common practice in developing countries during the crisis, the banks limit the possible amount for cashout per time (or per day), reduce the number of working ATMs, and so on, because when people panic they cash out a lot in order to have their money secured, exchange for other currency, etc., no bank needs that.
Better from you withdraw whenever you can if you need cash because this situation can get worse in time.

Furious 7

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Quote from: Little Mouse on July 03, 2021, 10:14:45 AM

What do you think? Is it possible that if lockdown continues, banking system will collapse here?

Lately, when the lockdown has become a terrible rule for all banking circles, they finally admit that in terms of financial distribution it has fallen quite sharply. So the impact does not rule out the possibility that the continuation of the lockdown will become a hotbed for withdrawing money in the long term to deal with the lockdown conditions.

seen from the declining liquidity, but the credit level has not contracted properly. clear enough to be used as a reference in the midst of economic pressure due to this pandemic that has affected the level of credit demand for the people of India, especially in Bangladesh.

but if everyone cashed in, of course the bank would be faster to close the total cash out request.

crwth

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I'm just basing on what you said because I don't know how the financial system works in Bangladesh and how it's being implemented at this moment with all the pandemic stuff still happening.

So back to the stuff: I believe it's not going to collapse due to the pandemic because there are possibly reserves that banks can go into if they ever run out or experience a crisis like what we have now. It's not going to be an instant, to be honest. They will do everything they can to stay afloat and possibly get all those defaulted loans and get the value of the collateral they have given.

I hope they find a way without damaging their economy by printing more paper money out of thin air.

Little Mouse

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Quote from: jackg on July 03, 2021, 10:23:40 AM

At current the exchange rate for bdt to usd looks stable. If you've got a lot of cash you might be able to find a European bank that you can save euros in (after converting - if converting isn't too expensive).

I'm just concerned about the overall economy. I have no desire to save my money with fiat. Trust me or not, at the moment I'm almost 60-70% with crypto. Rest of the 30% are in fiat and other commodities. So, I'm not much worries about my position. If it takes affect, inflation will be high and I will see people around me will have hard time to survive. That's something I'm worried about.

fiulpro

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Quote from: Little Mouse on July 03, 2021, 10:14:45 AM

Due to pandemic, there’s lockdown going on here. People are more likely to withdraw fund from Bank while rate of deposit is decreasing now. On a side note, default loan has been alarming here.
I was looking for cash out BDT from mobile banking but I had to look for a long area to find out a mobile banking agent. I felt like I should cash out more money than I need for now because it’s possible that there will be no agent opening their shop.
The same will also happen with the banking system if situation get severe which possibly will be soon. And if the lockdown continues for months, won't bank have hard time maintaining deposit and withdraw?
What do you think? Is it possible that if lockdown continues, banking system will collapse here?

The banking system of the whole world is about to collapse, it's not something new, when we talk about Bangladesh the whole situation is extremely weak. The government is not able to handle this situation and people are bound to jobs that pays them way less than their value.

The poverty is on the rise and at the same time the socio-economic crisis is something that would take years to resolve. Plus it's adjacent to India where covid situation is extremely bad.

Even if the banks collapses I do think they will be able to pull through in some years. They were able to recover from the crisis to an extent back in March 2021, therefore I do believe that it won't be a hurdle. The good thing about developing countries are that they have immense growth potential.

Gozie51

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You have kept saying here without mentioning your country or location. I don't know of the country still on such severe lockdown as you put it but I believe bank is very important to daily lives and anything that will affect it's total closure will amount into more severe, dangerous and chaos situation. Banks provide essential service of providing cash flow around the system and so the government are wise and knowledgeable not to have a total closure of means to financial transaction because both in health , illhealth or death, financial transaction must go on.

Kittygalore

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I don't think so, aren't most banks around the world works based on the idea of fractional banking system where they can borrow money even though they don't have any collateral to put for the money? If so, I don't think that the Bangladesh's Central Bank will collapse because the government will definitely come to their aid.

jackg

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At current the exchange rate for bdt to usd looks stable. If you've got a lot of cash you might be able to find a European bank that you can save euros in (after converting - if converting isn't too expensive).

It's possible if loan default is increasing or the bank's surplus is decreasing (such as more withdrawals than deposits) that:
1. The bank just collapses
2. The central bank just starts printing money to bail everyone out

The second is the most likely but I'm not sure if that'd cause an inflation problem or not (although I doubt it would since people might not want to risk their funds straight away if they lost the last time).

Little Mouse

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Due to pandemic, there’s lockdown going on here. People are more likely to withdraw fund from Bank while rate of deposit is decreasing now. On a side note, default loan has been alarming here.
I was looking for cash out BDT from mobile banking but I had to look for a long area to find out a mobile banking agent. I felt like I should cash out more money than I need for now because it’s possible that there will be no agent opening their shop.
The same will also happen with the banking system if situation get severe which possibly will be soon. And if the lockdown continues for months, won't bank have hard time maintaining deposit and withdraw?
What do you think? Is it possible that if lockdown continues, banking system will collapse here?

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