Farmers Bank which has been the topic of controversy for more than a year is set to get an image makeover by changing its name to Padma Bank in February.
The new name also includes new deposits and loan schemes and the banking institution is looking to gain back client confidence after its name was dragged through the mud for irregularities and loan scams.
“We are hoping to start the operations from next month,” the bank’s Managing Director Ehsan Khasru told Bangla Tribune on Tuesday (Jan 1).
He said that to re-christen to Padma Bank, they will need permissions from Bangladesh Bank and the Registrar of Joint Stock Companies and Firms.
“The processing will take up most of January but we are currently getting 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 a capital of Tk 7.15 billion, to get it out of troubled waters.
With the added fund total paid in capital of the bank stands at Tk 11.16 billion, most of which has been spent on clearing dues including building rents.
Farmers bank also owes the four state-owned banks nearly Tk 5.5 billion given earlier as term loans and call money. Besides, the four state banks have also finalised the process of handing out additional Tk 5 billion to purchase bonds.
Despite all the help with funding, the bank hasn’t been able to return money to its depositors including the Environment Ministry, Jiban Bima Corporation and Chittagong Port among other state institutions.
Farmer’s bank launched its operation back in 2013 with Tk 4.01 billion paid in capital. However, it was entwined is deep crisis within four years of its inception.
According to the central bank, big sums of money are in default which was disbursed as loans. 57.82 percent of loans, disbursed by the Farmers Bank, is in default. Until September, the bank gave out Tk 53.11 billion among which nearly Tk 30.71 billion is in default while in last June the default amount was Tk 15 billion.
During the end of 2017, Bangladesh Bank intervened to get the bank, embroiled by 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 also sacked the same day. On Dec 19, 2017, the central bank removed the then Managing Director AKM Shamir over his failure to run the banking institution. Ehsan Khasru is currently holding the post.
