Investment Corp. of Bangladesh and four state-owned lenders have signed agreements to infuse 7.15 billion taka of capital into troubled Farmers Bank Ltd., The Daily Star reported May 18, citing a statement.
The signing comes after the Bangladesh Bank eased certain rules to allow a single company to hold more than 10% of a bank's shares, paving way for the government's investment arm, Agrani Bank Ltd., Janata Bank Ltd., Rupali Bank Ltd. and Sonali Bank Ltd. to proceed with the investment in Farmers Bank. Investment Corp. of Bangladesh, or ICB, will infuse 550 million taka into the bank, while the four lenders will inject 1.65 billion taka each.
Under the agreements, the managing directors of ICB and the state-run lenders will take seats on Farmers Bank's board. Four other private institutional directors and two independent directors were also appointed to the board.
In March, The Daily Star quoted Finance Minister A.M.A. Muhith as saying that the five entities will take a 60% stake in Farmers Bank. Muhith noted that the government will not allow the closure of any bank.
Farmers Bank, which began operations in 2013, has been struggling due to a cash crunch caused by loan irregularities. In November 2017, Bangladesh Bank directed the lender's chairman and managing director to step down due to their alleged involvement in fraudulent financial schemes, including the disbursement of loans to shell companies.
As of May 17, US$1 was equivalent to 84.72 Bangladeshi taka.
