Thursday, 21st October, 2021
Thursday, 21st October, 2021
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BB tells Padma Bank to seek investment from abroad

Padma Bank applied for raising capital from foreign investors with the help of California-based Dale Morgan & Company

 

Bangladesh Bank (BB) has rejected Padma Bank’s merger proposal with the government banks and advised it to seek investment from abroad.

In this regard, Bangladesh Bank says the state-owned banks themselves have problems.

Apart from defaulted loans and capital deficits, they are also not in a favourable position on other financial indicators.

“In this situation, it would be better for Padma Bank to take initiatives to bring in investment from abroad than to merge with the state-owned bank,” the central bank said.

Asked about the content of the letter sent by Bangladesh Bank Executive Director and spokesperson Serajul Islam said: “We have accepted the first of the two proposals that they (Padma Bank) had in the letter where they informed us, they are already getting investment from abroad.”

“If they manage to secure the funds from foreign sources, we will approve it. We have agreed to allow them to bring in funds from abroad,” he said.

Bangladesh Bank sent this letter to the Financial Institutions Division (FID) of the Ministry of Finance on October 5.

Initially, on July 8, Padma Bank sent a letter to the Finance Ministry saying that it wants to merge with a state-owned bank.

Later the FID forwarded the merger proposal letter to the central bank on August 25, confirmed Rukhsana Hasin, joint secretary of the Financial Institutions Division.

On September 29, Finance Minister AHM Mustafa Kamal said the merger of Padma Bank with other banks might take place once a law is passed in this regard.

According to the existing Banking Companies Act, there is an opportunity to formulate a merger program on the basis of government approval and instructions from the central bank.

If Bangladesh Bank thinks, they can take full control of the distressed bank or merger with any other bank or may take liquidation.

According to the rules of the Banking Companies Act, depositors, creditors and shareholders should have equal opportunities to benefit from such mergers.

The banks have to apply to the High Court with a certificate from Bangladesh Bank having to say that the creditors, shareholders and depositors of the respective banks will not be harmed by the merger.

It is learned that on June 15, Padma Bank applied for raising capital from foreign investors with the help of California-based Dale Morgan & Company in the United States.

Even Bangladesh Bank also gave policy approval to the bank on August 2 in this regard.

Afterwards, the chairman of Padma Bank held a meeting with the representatives of Dale Morgan & Company.

The company has also made promising progress in attracting foreign investment.

Knowing this information from Padma Bank, the central bank has informed and given advice to the Financial Institutions Department.

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