Merger-bound Padma Bank MD quits

Managing Director of the crisis-ridden Padma Bank Tarek Reaz Khan has resigned to pave the way for its predestined amalgamation with another bank in the current reform process.

The bank's outgoing top executive is likely to join NRB Bank as its new managing director upon approval by the Bangladesh Bank (BB), according to Mr. Khan.

Talking to the FE, the just- resigned managing director said he left the bank on March 18, four days after the amalgamation decision with EXIM Bank, by submitting his resignation from the post and the board of directors of the bank approved it on April 06.

As the latest BRPD circular clearly mentions that top executive of the weak bank will not be eligible to retain their position when merged with stronger institutions, according to him¸ he took the decision on voluntarily stepping down in search of new responsibility.

About his new destiny, Mr Khan said he would be joining NRB Bank if the central bank gives the green signal to the proposal appointing him as the new MD of the bank. "The proposal has already been sent to the BB by NRB Bank authority."

Now, the NRB Bank has been run by acting MDs since its MD Mamoon Mahmood Shah resigned in February last.

The fourth-generation conventional lender, Padma Bank, born as Farmers' Bank, came into banking operations in 2013 but faced umpteen challenges mainly because of growing NPL buildups within three years of its existence.

To rescue the struggling bank from a complete financial collapse, the government came to intervene with a fresh financial lifeline following its renaming as Padma Bank in 2019.

But the rebranding move helps little as the total volume of non-performing loans (NPLs) of the ill-fated bank rose to Tk 35.52 billion, which is 61.86 per cent of the outstanding loans amounting to Tk 57.41billion, at the end of February 2024.

And finally comes its nemesis in the process of mergers and acquisitions kicked off by the government as part of financial-sector reforms.

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