A file photo shows people walking in front of the Farmers Bank Motijheel branch in Dhaka. An intuitive plan has been taken to give bailout fund of Tk 1,100 crore to scam-hit Framers Bank through state-owned financial institution Investment Corporation of Bangladesh and three state-run commercial banks —Sonali, Janata and Agrani, officials said. — New Age photo
An intuitive plan has been taken to give bailout fund of Tk 1,100 crore to scam-hit Framers Bank through state-owned financial institution Investment Corporation of Bangladesh and three state-run commercial banks —Sonali, Janata and Agrani, officials said.
The officials said a meeting presided over by finance minister AMA Muhith on Wednesday at his secretariat office in Dhaka reviewed the proposals of investment by the state-owned financial institution and banks as equity.
According to the proposals, ICB might invest Tk 450 crore and the rest amount by Sonali, Janata and Agrani.
Bangladesh Bank governor Fazle Kabir, financial institutions division secretary Eunusur Rahman and managing directors of ICB and Sonali, Janata and Agrani attended the meeting.
Eunusur Rahman told reporters that they appraised the whole situation in Farmers Bank including its severe liquidity crisis.
But the finance minister did not give any final decision, he said.
Farmers Bank, a new generation bank awarded licence in 2013 on political consideration, is facing severe liquidity crisis due to aggressive banking, loan irregularities, gross mismanagement and undue interference by the previous board of the bank led by its former chairman Muhiuddin Khan Alamgir, also a former home minister.
Alamgir has recently stepped down from his post in a major reshuffle in the bank’s board in line with the desire of the central bank which provided Tk 96 crore to Farmers Bank through repo.
Still, the bank that according to BB created a risk for the whole banking sector could not return funds to depositors.
Earlier on the day, Muhith said no decision was made when he was asked whether the government was arranging bailout fund for Farmers Bank through the ICB.
He, however, noted that the government could not let a bank bankrupt, which according to him ‘horrible’.
As of August, the bank’s total deposits amounted to Tk 5,170 crore and loan portfolio Tk 4,854 crore.
As of September, the bank’s defaulted loans stood at Tk 377 crore and the bank could recover Tk 7 crore in loans between March and June in 2017.
On December 23, Bangladesh Institute of Bank Management director general Toufic Ahmad Choudhury said that scam-hit Farmers Bank should be shut down, as it would set an example against irregularities in banking and financial institutions.
Toufic Ahmad made the comments about the bank at the biennial conference of the Bangladesh Economic Association in the capital.
Although it was the duty of the government to ensure the survival of a licensed bank, he said, Farmers Bank should ‘die’ due to all the irregularities that had taken place there.
Source: New Age.
An innovative strategy to steal millions, if not billions of dollars from the people: Set up “political banks” by cronies, use them to take m/billions in shady loans, then fund the “bankrupt” banks with taxpayers’ money in the name of not letting the banking sector fail. No need for corruption the old way. What a win-win strategy for corruption – big money and “clean” hands.