Padma Bank Limited | banks in bangladesh

Padma Bank Limited, formerly known as The Farmers Bank Limited, is a private commercial bank headquartered in Gulshan-1, Dhaka, Bangladesh. The bank was established in 2013. The fourth-generation bank commenced its banking operation on June 3, 2013. By an order On 29 January, 2019 Bangladesh Bank changed the name of The Farmers Bank Limited to Padma Bank Limited after the bank failed to pay its liabilities due to numerous bad loans and embezzlements.

Chowdhury Nafeez Sarafat is the Chairperson of Padma Bank Limited.

Padma Bank Limited

To emerge as a reliable and diversified financial institution with the view to partnering in the development of the nation by providing a wide range of products and tech-savvy solutions and ensuring a superior customer and employee experience.

We build and nurture relationships with our customers and partner to achieve their financial goals through a team of responsive, knowledgeable, and caring employees who are committed to shareholder value and the well-being of our nation.

History of Padma Bank Limited

Farmers-Bank Limited was established in 2013 and was granted a license due to the political links of its founder Muhiuddin Khan Alamgir.

In January 2016, Bangladesh Bank appointed an observer to The Farmers-Bank Limited which had found evidence of irregularities with the distribution of 4 billion taka loans.

Farmers-Bank used its security deposit money with Bangladesh Bank to pay back interbank short-term loans to four banks for a total of 7 billion takas in December 2017. This resulted in Farmers Bank falling short of the Mandatory Statutory Liquidity Requirement. The four banks were Agrani Bank Limited, Janata Bank Limited, Sonali Bank Limited, and NRB Bank Limited. Farmers Bank distributed loans to companies that never filed a loan application. The Bank distributed loans before their approval. By 2017, the bank was virtually broke according to The Daily Star.

Bangladesh Telecommunication Company Limited recovered 350 million takas from The Farmers-Bank Limited on 1 November 2017 after the bank refused twice to allow them access to the funds. The Bank sought support from Bangladesh Bank due to a liquidity crisis. Bangladesh Bank refused to help until there was a change in the board of directors. On 22 November 2017, Bangladesh Bank provided a 960 million taka repo loan to Farmers-Bank due to its liquidity crisis. Bangladesh Bank also provided it with a three months deadline to sort out the liquidity crises and asked its directors to inject cash into the Bank.

Padma Bank Limited

Md Ehsan Khasru was appointed managing director of The Farmers-Bank Limited on 5 January 2018.

Minister of Finance, Abul Maal Abdul Muhith, announced on 8 March 2018 that the Investment Corporation of Bangladesh and state-owned Banks will take over 60 percent of The Farmers Bank Limited. On 24 March 2018, Bangladesh Bank disclosed that their investigation of The Farmers-Bank Limited had found 5 billion taka loans were given to 11 companies violating banking rules in Bangladesh. The Central Bank blamed Muhiuddin Khan Alamgir and Mahabubul Haque Chisty,

ex-chairman of The Farmers-Bank Limited executive committee, over the loan embezzlements. The 11 companies are Apollo Trade International, Advanced Development Technologies, Abeda Memorial Hospital, Al-Faruque Bags, NAR Sweaters Ltd, Bangladesh Development Company, Mac Trading, Index Housing, Mollik Aquaculture Farm, Messers Premjoy, and Nahar Farmers Group. M/S Roseburg Auto Rice Mills Ltd, owned by Sherpur District Bangladesh Nationalist Party leader Md Hazrat Ali, embezzled almost 700 million takas from the Bank.

In October 2018, Anti-Corruption Commission announced that its investigation had found the involvement of two businessmen in embezzling 40 million takas from The Farmers Bank Limited. On 10 December 2019, they filed charges against 11 including former Chief Justice of Bangladesh, Surendra Kumar Sinha.

Padma Bank Limited

In April 2018, Anti-Corruption Commission detained Mahabubul Haque Chisty and three others, including his son Rashedul Haque Chisty, over the money laundering of 1.6 billion takas embezzled from the Bank. The other two accused are Muhammad Masudur Rahman Khan, First Vice President of The Farmers Bank Limited, and Zia Uddin Ahmed, Senior Vice President of The Farmers Bank Limited. They were questioned by the Anti-Corruption Commission in detention.

 Rashedul Haque Chisty received bail from Judge KM Emrul Kayesh on two cases concerning The Farmers Bank Limited on 18 May 2020. He also received Metropolitan Magistrate Md Sarafuzzaman Ansary and Judge Al Asad Md Ashifuzzaman on cases related to The Farmers Bank Limited on 19 May 2020. Bangladesh High Court issued a stay order on his bail verdict on 28 May 2020. Mahabubul Haque Chisty was shown arrested in five cases related to the embezzlement of money from The Farmers Bank Limited.

On 26 July 2018, Chisty’s bail application was rejected by Bangladesh High Court. Anti-Corruption Commission filed charges against 18 individuals including the CEO of the Bank, Chowdhury Mustaque Ahmed, for embezzling 300 million takas from the Bank. Anti-Corruption Commission sued the chairperson of S. A. Group and six others with Gulshan Police Station over the embezzlement of loans from Farmers Bank.

The Farmers Bank Limited was renamed Padma Bank Limited in December 2019 Former Chairperson of the Bank Muhiuddin Khan Alamgir, who is also an Awami League politician, member of Parliament, and former Minister of Home Affairs was removed from his post at the bank. The managing director, AKM Shamim, of the Bank was also forcefully removed from his post at the Bank by Bangladesh Bank. The Bank had failed to pay back money to depositors and had to receive a bailout from the Government of Bangladesh worth 8.15 billion takas.

Padma Bank Limited

Padma Bank failed to return 170 million takas fixed deposits to Bangladesh Inland Water Transport Authority Employees’ Pension Fund. The Bank also owes money to 18 government organizations such as the Bangladesh Telecommunication Regulatory Commission, Bangladesh Power Development Board, Bangladesh Climate Trust Fund, Bangladesh Petroleum Corporation, Chittagong Port Authority, Jiban Bima Corporation, and Mongla Port Authority, Petrobangla, and Sonali Bank. Bangladesh Textile Mills Corporation successfully recovered its deposits with the bank.

Justice Surendra Kumar Sinha and 10 others were indicted on 13 August 2020 over the embezzlement case by Special Judge of Court-4 of Dhaka, Judge Shaikh Nazmul Alam.

Muhiuddin Khan Alamgir denied allegations of embezzlement from his bank following reports by media organizations. He also denied reports that he charged commissions on loans from The Farmers Bank Limited.

Padma Bank requested Bangladesh Bank waive a 1.44 billion taka fine it imposed on the bank for failure to maintain the required cash reserve ratio and statutory liquidity ratio in December 2020. Bangladesh Bank waived 890 million takas from the fine.

Bangladesh Securities and Exchange Commission initiated an investigation of Padma Bank Limited following allegations that the bank Chairman Chowdhury Nafeez Sarafat had misused 1 billion takas from the bank by former bank chairperson Mohiuddin Khan Alamgir.

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