Kazi Zahidul Hasan :
The government institutions will pump fresh capital to the cash-strapped Farmers Bank in line with a plan outlined by the central bank.
The money will be, however, used to pay back only the depositors, officials said.
They said the government policy makers have endorsed the central bank’s plan and asked the Finance Ministry and the central bank to take necessary steps to make the bank solvent.
“Institutional investors will provide Tk 1,100 crore to the troubled bank. It will help the bank to raise its capital to Tk 1,500 crore from Tk 400 crore now,” a senior Finance Ministry official told The New Nation yesterday, asking not to be named.
The official said the fund would not go to the bank as deposit. They would put their money in the bank after buying shares. “Institutional investors will hold the shares until the bank returns to solvency and people get back confidence in the bank,” he added.
He said the central bank has already prepared a plan to bail out the bank. The capital will be injected to the bank as per the central bank’s guideline.
Farmers Bank has plunged into an acute liquidity crisis as a result of piled up fictitious loans approved by the bank’s former board led by Dr Mohiuddin Khan Alamgir making it insolvent.
Panicked by the insolvency, depositors of Farmers Bank are trying to either close their bank accounts or withdraw their money. They have withdrawn around Tk1, 200 crore deposits in the last few months.
Farmers Bank founding chairman and Awami League leader Dr Mohiuddin Khan Alamgir and it’s Audit Committee chairman Md Mahabubul Haque Chisty recently resigned from their posts as per the central bank directive.
On December 19, Bangladesh Bank sacked the bank’s Managing Director AKM Shameem for loan irregularities and failure to protect interest of the depositors.
“We have devised a plan to salvage the plunging bank. The plan has already sent to the Finance Ministry chalking out all necessary steps to protect depositors’ interests,” a Central Bank official told The New Nation yesterday.
He said the plan will be implemented under the direct supervision of the Bangladesh Bank.
