Bangladesh Bank Bhaban. COURTESY
Padma Bank allowed to erase accumulated loss
Transparency International Bangladesh (TIB) expressed concern over the Bangladesh Bank's approval to conceal the information of accumulated losses of Padma Bank from its financial statement on the condition of getting a foreign loan.
Terming this type of advantage as unethical and fraudulent, TIB warned BB saying this action may worsen the faith of the regulator in its role in establishing discipline and good governance in the financial sector along with creating the risk of tarnishing the country's image abroad, TIB said Saturday in a media statement.
According to the media reports, BB has agreed to create a separate account by hiding the information on losses as per the condition of the problematic Padma bank's consultancy firm DelMorgan which would bring a $70 crore foreign loan.
Terming BB's unethical step as unprecedented in the country's banking sector, TIB executive director Iftekharuzzaman said that the finance ministry and Bangladesh Bank have been supporting the Padma Bank by relaxing various rules like providing Tk700 crore capital from the four public banks and ICB, exemption of statutory liquidity ratio or SLR and other policy support to save the bankrupt Farmers Bank (now named Padma Bank) which was on the verge of ruin due to the enormous corruption, and financial irregularities of the entrepreneurs and directors. But all these relaxations are not changing the bank's situation, rather the losses of the bank are rising, said Iftekharuzzaman.
Although Padma Bank is a private bank, 60% of its shares are owned by the four state-owned banks and ICB. "If this attempt of the huge foreign loan, which the bank is talking about, fails, which is very much possible, this type of fraudulence is comparable to suicidal attempt as the central bank is not considering the aftermath," he said.
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