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BB asks Farmers Bank board to tackle liquidity crisis

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FT ONLINE

Bangladesh Bank (BB) has asked the new board of directors of the Farmers Bank Limited (FBL) to keep some money in the bank to face the existing liquidity crisis and bring back customers’ confidence.
“We have directed the members of the bank’s board to keep some money from their own fund for overcoming the current liquidity crisis,” said central bank’s Executive Director Subhankar Saha.
After taking charge of the new board, Chairman Mohammad Masud and members met with the BB governor and high officials at the central bank headquarters in Dhaka’s Motijheel on Wednesday.
Subhankar Shah said the Bangladesh Bank also asked the FBL to take necessary steps for improving all financial indicators of the bank.
He said the board members, too, expressed their strong determination to run the bank as per the central bank’s directions.
On Monday, former home minister Mohiuddin Khan Alamgir resigned as chairman of the FBL board of directors and executive committee in response to the central bank’s cautions against the liquidity crisis the bank has been facing for quite some time.
Another member of the board of directors Mahabubul Haque Chisti also resigned as chairman of the FBL audit committee.
According to a press release, issued by the central banks earlier, it was observed that the crisis was deepening, as a number of depositors were trying to withdraw money from the bank.
As the matter came to the Bangladesh Bank’s notice, necessary regulatory steps were taken, the release added.
It also said that steps were taken against FBL’s managing director for failing to fulfil his responsibilities and violating the guidelines of Bangladesh Bank.
The central bank also sent a letter to FBL, asking why Managing Director AKM Shameem of the private bank would not be removed within seven days. The seven days will end on next Sunday.

-NK

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