Farmers Bank launched its operations in 2013 but was entwined in a deep crisis within four years of its inception
Farmers Bank is set to start over with a new name, Padma Bank, from February, in an effort to recover its image tarnished by irregularities and loan scams.
The new name will include new deposit and loan schemes. The banking institution is looking to regain client confidence in the banking sector.
The bank’s Managing Director Ehsan Khasru told Dhaka Tribune on Tuesday (January 1), “We are hoping to start operating from next month.”
He said to change the name to Padma Bank, they will need the permissions of Bangladesh Bank and the Registrar of Joint Stock Companies and Firms.
“The processing will take up most of January but we are currently getting a good response on deposits,” Khasru said.
In May of last year, government-owned: Sonali Bank, Janata Bank Rupali Bank, Agrani Bank, and Investment Corporation of Bangladesh (ICB); provided the bank with Tk7.15 billion of capital, to get it out of troubled waters.
The added fund total, paid in capital of the bank, stands at Tk11.16 billion; most of which has been spent on clearing dues including building rents.
Farmers Bank also owes the four state-owned banks nearly Tk5.5 billion that was given earlier as term loans and call money. Additionally, the four state banks have also finalized the process of handing out an additional Tk5 billion to purchase bonds.
Despite all the help with funding, the bank has not been able to return money to its depositors including the Environment Ministry, Jiban Bima Corporation, and Chittagong Port; among other state institutions.
Farmers Bank launched its operations in 2013 with Tk4.01 billion paid in capital. However, it was entwined in a deep crisis within four years of its inception.
According to the central bank, large sums of money, which had been disbursed as loans, are in default. Around 57.82 percent of loans, disbursed by Farmers Bank, are in default. Until September, the bank gave out Tk53.11 billion, of which nearly Tk30.71 billion is in default, while in last June, the default amount was Tk15 billion.
During the end of 2017, Bangladesh Bank intervened to get the bank— embroiled in corruption and loan scams—out of trouble.
On Nov 27 of that year, former Home Minister Mohiuddin Khan Alamgir resigned from the bank’s board of directors as its chairman.
Mahabubul Haque Chisty, the audit committee chief at the time, was fired the same day.
On Dec 19, 2017, the central bank removed the then Managing Director AKM Shamir—because of his failure to run the banking institution—and appointed Ehsan Khasru to replace him.