Scandal-hit Farmers Bank makes huge loss

Crisis-hit new generation private bank, Farmers Bank has made a net loss of Tk 530 million in the calendar of 2017.

And, its balance sheet shows, the banks aggregate loan amounting to Tk 51.30 billion distributed among the clients has exceeded the deposit worth Tk 46.73 billion available at yearend.

Stakeholders said the bank has failed to recover outstanding loans while most of its depositors could not withdraw cash whenever they tried in recent times.

The crisis of the Farmers Bank was reflected in an unaudited annual report submitted by the bank to the Bangladesh Bank (BB), the regulator authority.

The amount loss made by the Farmers Bank may increase if the losses caused by a few scams as unearthed in recent times are taken into account, according to the central bank.

It also fears the Farmers Bank will not be able to recover most of its loans distributed already.

These scams took place during the tenure of former chairman of the Muhiuddin Khan Alamgir, also an ex-minister, and the chairman of the bank’s audit committee Md Mahabubul Haque Chisty. They themselves misappropriated major portion of the loans disbursed through forgery, according to a central bank report.

The Farmers Bank scam has left serious negative effects on the countrys banking sector as a whole. Its depositors have been panicked by the situation.

This bank was given permission in 2012 on political considerations.

When asked former central bank deputy governor Khandakar Ibrahim Khaled insisted that the shares of Farmers Bank should be distributed among other organisations. Profit coming from such investments should be given to the depositors, he said adding that “If it doesn’t work, the bank should eventually be closed down.”

The managing director (MD) of the bank, Md Ehsan Khasru, said, the bank had already refunded an amount of Tk 2.6 billion after the crisis hit it.

The bank made the loss due to poor quality of loans distributed earlier... Steps are being taken to overcome the situation and make it viable,he added.

*This report, originally published in Prothom Alo print edition, has been rewritten in English by Farjana Liakat.