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Monday, August 26, 2019

Trouble awaits the depositors

IT changed its name to hide its filthy scams, but failed to get a place in the good book of the banking sector. It's Padma Bank, which is now largely in the dismaying situation for not leaving same old path. The old Farmers Bank, had secured a license for banking on political consideration, was allowed to embezzle public money deposits of different public limited companies and government agencies. The dying condition was not unknown to the Bangladesh Bank but political blindness had overcast the notion of governance.
Since established in 2013, the bank 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 headed by a ruling party man. 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.
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 Chattogram 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. But the bank has been unable to honour their request to cash withdraw. Amidst the situation, the central bank also instructed Padma Bank to sit with the government and non-government organisations in order to settle the fixed deposit, special notice deposit and call money.
What's most unfortunate is that, the central bank didn't take any initiative to rescue the banking sector amid widespread irregularities. We fear, most of the commercial banks will face the same situation of Padma Bank if they are asked by the depositors to return back their money.