BB approves FDI following rules, says Padma Bank dismissing TIB report as false

Padma Bank Ltd has claimed that Bangladesh Bank has given approval to foreign investment in the private bank following all local laws and international accounting standard.

“Bangladesh Bank has given no undue favour to Padma Bank in roping in foreign investment. Rather, the central bank has extended assistance in consolidating bank’s financial statement,” Padma Bank Managing Director and CEO Ehsan Khasru said in a statement on Sunday.

Padma Bank’s clarification came a day after Transparency International Bangladesh (TIB) has expressed concern over the FDI approval allowing hiding loss information in the bank’s financial statement.

The Berlin-based graft watchdog also called for a reversal of the central bank’s decision.

But Ehsan Khasru said Bangladesh Bank has cleared hurdles in the way of Padma Bank’s initiative to bring in foreign investment by making the process easier after following rules and regulations and doing research.

He said he was astonished by the TIB’s reaction terming the move “deceptive facility” only depending on media reports but not properly verifying the information.

The Padma Bank MD said the facility given by BB is nothing new in the country as it has already extended the same facility to state-owned Sonali, Janata, Agrani and Rupali and ICB Islamic Bank.

US-based investment bank Del Morgan has proposed investing $700 million in problem-riddled Padma Bank. Half of the investment is supposed to come as capital while the rest in the form of bond or others.

Ehsan Khasru said the international agency, Del Morgan, agreed to invest in Padma Bank after analysing the financial statement in 2020.

“The future of the bank is bright. They (Del Morgan) will get a good return from here. The international agency has taken the investment move after analysing the situation. There’s no partial information. Besides, there’s no forgery in the process,” he said.

The media reports based on TIB statement is ‘false, untrue and confusing’, according to the Padma Bank CEO.

He further said Padma Bank will announce the financial statement of 2021 calendar year soon.

“The financial statement is being prepared with transparency. Why is the question of forgery? I can’t understand (the motive). All tasks happened in compliance with Bangladesh Bank rules,” he said, expressing surprise at the TIB report.

The seasoned banker claimed that the financial institution did not engage in any type of forgery after rebranding Padma Bank from Farmers Bank.

Bangladesh Bank postponed the credit activities of Farmers Bank in 2017. The bank transformed the entire ownership and management. State-owned commercial banks – Sonali, Agrani, Janata, Rupali -- and Investment Corporation of Bangladesh injected billions of funding to overcome the crisis of Farmers Bank.

Regarding the transformation, Ehsan Khasru said Padma Bank marked improvement in many areas in the last four years with a huge increase in deposits thanks to customers’ trust.

“We continue the credit services. Bangladesh Bank is also satisfied with our activities. They keep trust on us. Del Morgan also found good results in research on return of investment. There’s no hidden issue. All things are happening maintaining transparency,” he added.

Dismissing the TIB report, Ehsan Khasu said: “I can’t understand how they who work on transparency can make such an unclear statement.”