Business Desk :
The Bangladesh Bank has allowed Padma Bank to clean its balance sheet by giving permission to erase its accumulated loss in order to attain foreign direct investment. The accumulated loss of the bank now stands at around Tk 805 crore and it would be allowed to adjust the amount within the next 10 years including a grace period of one year.
Padma Bank, erstwhile Farmers Bank, will have to show the amount as intangible loss, which will have to be gradually adjusted from the net profit of the lender in the next 10 years, a BB official said.
The bank earlier requested the central bank allowing it to clean the balance sheet such that it could manage foreign direct investment (FDI). The central bank consequently gave the permission on January 4. Padma Bank signed a memorandum of understanding (MoU) with DelMorgan & Co, a US-based investment bank, in September last year to manage foreign direct investment (FDI) from different interested companies. Samir Asaf, managing director of DelMorgan, met with BB Governor Fazle Kabir yesterday to discuss the issue. The investment bank has proposed to manage a foreign investment of $700 million for Padma Bank.
The private lender will have to show its balance sheet as transparent in order to attract the FDI.
If the bank fails to manage the FDI, the central bank will not permit to clean the balance sheet.
Padma Bank’s capital shortfall stood at Tk 540 crore as of September 2021.
Default loans at the bank surged to Tk 3,586 crore, which is 62.4 per cent of its outstanding loans.
Around three years ago, the government rescued the lender from collapse in the wake of massive financial irregularities. Five state-run financial institutions, namely Investment Corporation of Bangladesh, Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank, injected Tk 715 crore into the bank to acquire 60 per cent of its stakes.
