bdnews24.com :
Riddled with loan scams and plagued by irregularities, Padma Bank has knocked on the door of the government to bail it out in the form of a merger with or an acquisition by a state-owned bank and the country’s financial regulator is weighing the idea.
The central bank spokesman Serajul Islam on Thursday acknowledged having received the proposal of Padma Bank, formerly The Farmers Bank, via the finance ministry. “Bangladesh Bank has not taken a decision on the matter,” he said.The government approved The Farmers Bank, owned by Muhiuddin Khan Alamgir, an Awami League Presidium member, in 2013. He resigned as chairman following pressure over loan scams and irregularities in 2017.
Chowdhury Nafeez Sarafat, the chairman of RACE Asset Management Ltd who also heads the board of trustees of the Canadian University of Bangladesh, took over as chairman of the bank in early 2018 before it was rechristened Padma Bank the following year apparently to restore its image.
State-owned Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, and the Investment Corporation of Bangladesh injected into the troubled private bank Tk 7.15 billion, or 66 percent of its capital, at that time in a move to stop it from going bankrupt.
Struggling to continue operations having been paralysed by a liquidity crisis, the bank now seeks more funds, or merger with or acquisition by a state-owned bank.
Its Managing Director and CEO Ehsan Khasru raised concerns about its future in a letter dated Jul 8 to the Financial Institutions Division of the finance ministry.
“A plea from Padma Bank regarding restructuring on an emergency basis has reached the finance ministry, but we haven’t yet taken a decision on the matter,” said ABM Ruhul Azad, additional secretary at the Financial Institutions Division.
