4 state banks, ICB to inject Tk 715cr into Farmers Bank

Four state-owned commercial banks and the Investment Corporation of Bangladesh will inject Tk 715 crore into fresh equity in the scam-hit Farmers Bank to save it from the liquidity crisis.

They have made the decision on government instructions.

Already, Bangladesh Bank held a meeting with the four state banks and the ICB at its headquarters, asking them to make preparation in this regard, BB Deputy Governor Abu Hena Md Razee Hassan told The Daily Star yesterday.

Central bank Governor Fazle Kabir presided over the meeting where managing directors of the four banks and the ICB were present.

Abu Hena said letters would be issued to the ICB and the four banks, asking them to approve the matter in the quickest possible time.

The four banks -- Sonali, Janata, Agrani and Rupali -- will provide Tk 165 crore each and the ICB Tk 55 crore.

The managing director of one state bank said the banks would hold directorship of the Farmers Bank's board in exchange for providing the equity.

Farmers Bank, approved on political consideration, has been facing an acute liquidity crisis since November last year as it disbursed more than half of its total outstanding loans of Tk 5,130 crore through malpractices, BB investigations found.

The central bank has held the private bank's former chairman Muhiuddin Khan Alamgir, an Awami League lawmaker, and ex-chairman of its executive committee Mahabubul Haque Chisty responsible for a series of scams.

The two resigned from the bank board in November last year after the BB asked them to quit over their alleged involvement in loan scams.

The bank has repeatedly failed to repay depositors' money on time.

A number of depositors have filed complaints with the central bank after the sinking bank failed to repay them Tk 852 crore of deposits.

Between November 2017 and February this year, the BB received complaints from 14 government agencies, four businesses and 21 individuals about the bank's refusal to repay the sums upon maturity of term deposits.