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Bangladesh preps 11B taka bailout plan for troubled private sector bank

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Bangladesh preps 11B taka bailout plan for troubled private sector bank

Bangladesh's government plans to inject 11 billion taka into troubled Farmers Bank Ltd. as part of a bailout package, The Daily Star reported Feb. 8.

As part of the plan, Investment Corp. of Bangladesh and four state-owned banks, Sonali Bank Ltd., Janata Bank Ltd., Agrani Bank Ltd. and Rupali Bank Ltd., will acquire shares in Farmers Bank. Bangladesh Finance Minister A.M.A. Muhith confirmed the plan but said it was still under discussion.

The report came after Farmers Bank unsuccessfully tried to raise 11 billion taka of capital in a private placement a few months ago, the publication reported. The bank has also obtained approval from the central bank to issue 5 billion taka of bonds.

Farmers Bank, which commenced operations in June 2013, has been struggling to survive due to a cash crunch caused by loan irregularities. In November 2017, the country's central bank ordered the lender's chairman and managing director to step down due to their involvement in fraudulent schemes, including the disbursement of loans to nonexistent companies.

As of Feb. 7, US$1 was equivalent to 82.94 Bangladeshi taka.