Padma Bank MD resigns

Tarek Reaz Khan, managing director of the embattled Padma Bank, has resigned from his post citing personal reasons.

Khan, who took charge of Padma Bank in March last year on a three-year tenure, handed in his resignation letter to the bank on Sunday, a director of the bank confirmed to The Daily Star. He asked not to be named.

The director, who asked not to be named, did not share the contents of the letter.

Faisal Ahsan Chowdhury, the deputy MD of Padma Bank, said he was unaware of Khan stepping down.

"He is on leave as his wife is suffering from cancer," Chowdhury said.

Khan, who was the ten-year-old bank's fourth MD and chief executive officer, did not respond to The Daily Star's request for comment.

Neither did the bank's chairman Chowdhury Nafeez Sarafat.

Khan's resignation comes at a time when the bank is mired in a liquidity crisis.

It was struggling to make the instalments every six months for a Tk 55 crore penalty it faces for failing to maintain the minimum level of cash reserve from 2017 to 2019.

The penalty was supposed to be cleared by 2025 but Padma will get until April 2028 to do so after the Bangladesh Bank board last month agreed to the time extension considering its fund crunch.

This comes after the BB in March 2021 waived a Tk 89 crore penalty for the bank levied for its failure to maintain the minimum level of liquidity between October 2017 and December 2019.

The bank, which was called Farmers Bank until 2019, is also unable to return Tk 25.4 crore to the Bangladesh Telecommunication Regulatory Commission.

Established in 2013, the bank became a hotbed for financial irregularities in less than three years of setting up shop. More than Tk 3,500 crore was siphoned out from the bank between 2013 and 2017, according to the BB.

Allegations of corruption against Muhiuddin Khan Alamgir and Md Mahabubul Haque Chisty, the then board chairman and chairman of the audit committee respectively, became deafening and depositors, which included government agencies, started pulling out money.

The two were forced to resign in November 2017, and the government stepped in to rescue the bank in 2018.

The state-owned financial institution Investment Corporation of Bangladesh, Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank bought 60 percent stakes in the bank for Tk 715 crore.