Board gives Tk 17cr to ease cash crunch



The newly reconstituted board of Farmers Bank has injected Tk 17 crore into the bank to help the troubled lender cope with the current financial crisis.

The directors will gradually contribute to Tk 100 crore from January according to the instructions of the central bank. The bank will also raise funds by appointing four new directors.

Farmers Bank President Mohammad Masud shared the development at a meeting with reporters at a Dhaka hotel yesterday in the presence of directors Azmat Rahman and Sayeed Ahmed.

"The council is working to restore depositors' trust and recover the defaulter's money," Masud said.

The board has identified two major issues that the bank is currently facing: the erosion of depositors' confidence and the liquidity crisis. At present, the bank has one million depositors, including about 35 institutional investors.

"Many institutional depositors force the bank to give back their money.This happens because of lack of trust, so we try to convince them not to withdraw money," said Masud

.

Savers withdrew Tk 1,100 crore in the last 15 days putting the bank into cash crisis. According to the bank, the total deposit amounts to 5,000 crores tk, against a current loan of 5,200 crores Turkish.

"The board of directors decided to suspend lending activities until it sort of liquidity crisis," Masud said.

The four-year-old bank has already received approval from the central bank to raise 500 crores from Tk by issuing bonds.

"We will hit institutional investors for them to invest in bonds." The central bank assured us that it would pursue investors, "said the president.

Farmers Bank has taken various steps to reduce costs and restore the trust of its employees.

The bank recently held a meeting of the executive committee where 13 directors were present, the largest participation of the board members.

"We try to make decisions through discussions within the board of directors and now every director can give his opinion," said Masud

.

"Previously, we could not give any opinion in case of loan approval despite being a member of the board of directors .In any case, we had the custom of Approving post facto proposals within the board of directors during the term of office of Muhiuddin Khan Alamgir. "

Recently, the bank organized a conference of managers to hear them on how to get the bank out of the current crisis. In the past, he had never sat with the managers to listen to their opinions on the lender's business and ambition.

The Farmers Bank also decided to conduct a special internal audit to identify any misdeeds that occurred in the bank. It will also relocate some branches that have been leased at high prices, said Masud.

Last month, the former chairman of the Farmers Bank Muhiuddin Khan Alamgir resigned from the board of directors following the instructions of the central bank. He was replaced by director Masud.



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