Padma Bank struggles to return fixed deposits | The Daily Star
12:00 AM, August 25, 2019 / LAST MODIFIED: 12:43 AM, August 25, 2019

Padma Bank struggles to return fixed deposits

The Bangladesh Inland Water Transport Authority Employees’ Pension Fund had parked Tk 17 crore as fixed deposit with the Motijheel branch of Padma Bank on June 28 last year.

The deposit matured this year and on June 27 the trustee board of the fund wrote to the bank to cash out the fixed deposit. But Padma, formerly known as Farmers Bank, has been unable to honour their request.

“This is very unfortunate,” said the BIWTA Employees Pension Fund in a recent letter to the managing director of the bank.

Since the fixed deposit is yet to be cashed out, it has become difficult to settle the pension fund of retired employees of BIWTA and provide grants to the deceased.

The letter called for necessary steps for cashing out the fixed deposit on an emergency basis.

The Fund also wrote to the central bank, urging it to direct the private bank to repay the sum.

The central bank also instructed Padma Bank to sit with government and non-government organisations in order to settle the fixed deposit, special notice deposit and call money.

The BIWTA Employees Pension Fund is not the only victim of the cash-strapped bank’s failure to settle matured deposits.

A total of 18 government organisations parked Tk 1,323 crore in deposits with the Padma Bank, according to the central bank. Of the sum, it has managed to return only Tk 87.47 crore.

Padma Bank owes Tk 28.1 crore to Petrobangla, Tk 41.84 crore to Mongla Port Authority, Tk 109.08 crore to Jiban Bima Corporation, Tk 38.60 crore to the Bangladesh Telecommunication Regulatory Commission, Tk 170.29 crore to Chittagong Port Authority, Tk 541.31 crore to the Climate Trust Fund, Tk 140 crore to Sonali Bank, and Tk 54 crore to Sonali Bank (in call money), and Tk 47.05 crore to the Bangladesh Power Development Board.

Bangladesh Textile Mills Corporation got back all of the Tk 10 crore it had deposited, while Bangladesh Petroleum Corporation received Tk 6.46 crore of the Tk 7.09 crore it had put in a deposit, according to a central bank document.

Padma Bank has informed the central bank that it had faced serious liquidity crisis in October 2017 that lasted until April 2018.

Now, the bank is trying hard to return the money that have been sought by depositors.

Padma Bank says it is trying to win back clients’ confidence by way of honouring cheques and payment orders. It has already started regular banking activities.

The bank has also been able to pay back the interests of all the term deposits.

It said in most cases the bank had discussed the issues with the clients and informed them that it would repay the rest of the deposits subject to availability of new deposits and recovery of loans.

Farmers Bank was renamed Padma Bank as the troubled lender looked to sweep the gross irregularities and loan scams under the carpet and get an image makeover.

The bank, which was established in 2013, became a hotbed for financial irregularities in less than three years of operation.

Allegations of corruption against them became deafening and depositors, including different government agencies, started pulling out their money. This prompted the central bank and the government to step in and rescue the bank. Four state-owned commercial banks -- Sonali, Janata, Agrani and Rupali -- and the Investment Corporation of Bangladesh bailed out the bank by buying equity shares worth Tk 715 crore in March last year.

Ehsan Khasru, managing director of the bank, could not be reached for comments on the issue. 

Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Grameenphone:
Type START <space> BR and send SMS it to 22222

Robi:
Type START <space> BR and send SMS it to 2222


Banglalink:
Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News

Top