Farmers Bank is now under pressure to settle its overdue payments for import, with a number of foreign missions dangling the threat of blacklisting the troubled lender if it does not pay back immediately.
At present, the bank has overdue payments amounting to Tk 109 crore to foreign and local businesses.
The scam-hit bank had depleted its capacity to make import payment because of a liquidity crisis, which prompted the central bank in January last year to forbid it from opening any letters of credit. But, the instruction was audaciously ignored.
On July 12, the bank wrote to the Bangladesh Bank requesting it to allow the settlement of overdue payment to foreign and local exporters, even if it means creating forced loans or realising the fund from importers.
Md Ehsan Khasru, managing director of Farmers Bank, told The Daily Star yesterday that the bank has taken an initiative to settle the LCs immediately as it now has sufficient cash.
“We have to pay the money immediately to the exporters of China, India, Italy and some other countries to avoid the legal complexities. The central bank has assured us it will give the approval on the issue within Monday.”
Khasru, however, said the bank's loan-deposit ratio would go up if it paid the money by creating forced loans against the importers.
“We will discuss this with the central bank,” he added.
Earlier this year, four state-owned banks and the Investment Corporation of Bangladesh, acting on the government's instruction, injected Tk 715 crore in fresh equity into Farmers Bank to rescue it from the liquidity crisis.
Farmers Bank, which was given a licence on political consideration in 2013, has landed in choppy waters within a few years of its establishment thanks to disbursing 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, also 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.