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Padma Bank can take foreign investment: BB

  • Staff Correspondent
  • 9th October, 2021 09:16:48 PM
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Padma Bank can take foreign investment: BB

Padma Bank Limited can assemble the capital deficit by foreign investment instead of merging with any state-owned bank, said Bangladesh Bank (BB) to the ministry of finance.

The central bank in response to a query of the Financial Institutions Division (FID), a wing of the Ministry of Finance gave the opinion.

Md. Serajul Islam, spokesperson of BB said that integration or merging of Padma Bank with any state bank is very challenging now.

“We have expressed our opinion that it would be better to bring investment from abroad and Padma Bank can now go that path.” He said.

The ministry sources said that the BB stated -state-owned banks have remained in some problems including defaulted loans and capital deficits, those banks are also not in a favorable position on other financial indicators.

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

With full control of the distressed bank, Bangladesh Bank may take steps to merge or liquidate with any other bank.

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

On July 8, Padma Bank applied to the FID to merge with state-owned Sonali, Janata, Agrani, Rupali or BDBL.

The bank said in a letter that it needed to unite to protect itself from any future disasters. The FID sent a letter to Bangladesh Bank on August 25 seeking its opinion on the matter. The central bank gave its opinion on Tuesday.

Meanwhile, Padma Bank, on June 15, applied to raise capital from foreign investors with the help of California-based Dale Morgan and Company in the United States.

The BB gave policy approval to Padma Bank on August 2 in this regard. Chairman and Managing Director of Padma Bank met with representatives of Dale Morgan and Company.