Farmers Bank has created 'systematic risk' for Bangladesh finance
Bangladesh's entire financial sector faces a 'systematic risk' because of irregularities in the operation of a bank run by a former government minister. The Farmers Bank was given its license in 2013 and its Chairman is Mohiuddin Khan Alamgir, the country's former home affairs minister. The Bangladeshi finance ministry has now released a report outlining issues of malpractice at the bank, including making loans to its directors and to organisations that do not exist. It is experiencing a serious liquidity crisis and the ministry warns that the bank does not have the ability to repay its liabilities.
It says the Farmers Bank is experiencing liquidity crisis for a year and it has deepened to such a level that the bank is failing repeatedly to fulfil cash reserve requirement or CRR at the Bangladesh Bank.