Bailing out Farmers Bank
The government is all set to bail out the scam-hit Farmers Bank. In my opinion, such a move will set a dangerous precedence and will have negative consequences in the future. Despite doubling the interest rates on deposits, the bank has failed to attract new customers. Also, it could not regain its clients' confidence after restructuring the board twice. Under these circumstances, if the government injects fresh capital into the bank, it will drain out too.
When experts warn that bailing out the bank will encourage others to follow suit, it's simply not justified for the government to go ahead with its plan. The government should care more about protecting the interest of common depositors than that of a few powerful bankers. Instead of funnelling new funds, the government should pressurise the bank to recover the lost money.
Mohammad Zonaed Emran, By e-mail
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