Only cash in hand can give them comfort | The Daily Star
12:00 AM, March 26, 2020 / LAST MODIFIED: 12:56 AM, March 26, 2020

Taming coronavirus rampage

Only cash in hand can give them comfort

In moments of crisis, holding more physical cash gives some a sense of control over the situation, it is often said.

And as the number of coronavirus cases in Bangladesh continues to rise, besides stockpiling cleaning products and essential foodstuffs many are flocking to bank counters to keep extra cash on hand.

One such individual is Pervez Chowdhaury, a banker by profession, who yesterday withdrew Tk 140,000 from another bank fearing the impending health and financial crisis.

Even though banks have assured they would keep an adequate number of branches open during the shutdown from March 29 to April 2 for two hours as per the instruction of the central bank, fear of lenders running out of cash have drove many to flock to bank counters yesterday, the last full working day.

The Daily Star correspondent yesterday visited five branches of different banks in Dhaka city and spoke with officials of at least six branches located outside of Dhaka. And the situation was same everywhere.

So anxious are people overall that an official of Social Islami Bank told the correspondent yesterday that customers have been cashing out their fixed and deposit pension schemes prematurely.

Anticipating such a situation, the central bank on Monday cut its policy or repurchase agreement rate by 25 basis points to 5.75 per cent.

Besides, it also reduced cash reserve ratio by 50 basis points to 5 per cent in order to supply an additional amount of Tk 6,500 crore to the market.

"There is no cash crisis in the banking sector. Rather the rampant withdrawal and use of cash has created a health risk for people," said Zahid Hussian, former lead economist of the World Bank's Dhaka office.

There are fears that the cash itself could be a source for transmission of the lethal, pneumonia-like virus, which is spreading like wild fire all over the globe.

People with access digital banking should not withdraw cash and handle bank notes at the moment, he added.

Ahsan H Mansur, executive director of the Policy Research Institute, echoed the same.

"The local notes are filthier than those of other countries," he said.

A number of central banks of other countries have already taken different measures to disinfect their cash in order to contain the virus.

South Korea's central bank has quarantined almost all its bank notes for two weeks to remove any traces of coronavirus and even burn them as part of the government's efforts to contain the outbreak.

The Federal Reserve, the central bank of the US, has also taken the same measure fearing bank notes as a vector for the disease, which is said to perish after nine days.

The Chinese central bank took massive initiative since the middle of February to deep clean potentially infected cash with ultraviolet light and high temperature, and in some cases, destroying it, to stop the spread of the virus.

The Bangladesh Bank has yet to take any initiative to quarantine its bank notes although 39 people have so far infected with the virus and 5 of them died until yesterday.

"It is tough for the central bank to quarantine the bank notes as the country is highly dependent on cash," said a Bangladesh Bank official, who has a strong connection with supplying and mopping up money to and from the market.

Better than Cash Alliance, an entity of the United Nations, carried out a research on Bangladesh's digital and cash transaction system in 2017 and found only 6 per cent of the total transactions are settled through the digital method.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, whose cash withdrawal pressure surged in the last few days, echoed the same as Mansur and Hussain.

"Excessive use of cash has created an additional risk of spreading the virus. We are repeatedly urging customers to use the digital channels to settle their transactions," he added.

City Bank has taken preparation to keep adequate cash at its ATM booths during the general holidays, said its MD Mashrur Arefin.

"We have also asked our customers to use our dedicated app Citytouch to settle their transactions," he added.

Standard Bank will keep 120 of its 138 branches open during the general holidays, said its MD Khondoker Rashed Maqsood.

"Customers will get their required cash any time," he said, while also calling for using the digital modes to settle transactions.

But for those who are leaving Dhaka for their villages because of announcement of general holidays by the government, that is not an option, Hussain said. "People feel secure during any type of crisis if they can keep cash handy."

Chowdhaury echoed the same.

"Cash provides a certain level of control and certainty that digital and electronic payments don't," said the mask-clad banker.

Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Type START <space> BR and send SMS it to 22222

Type START <space> BR and send SMS it to 2222

Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News