Dhaka, Bangladesh (BBN) – The board of directors of the Farmers Bank Limited (FBL) has been reconstituted with the election of the new chairman and vice-chairman of the trouble-hit fourth generation private commercial bank (PCB).

Mohammad Masud and Maruf Alam have elected as new chairman and vice-chairman respectively of the PCB, officials of the central bank said Monday night.

Dr. Muhiuddin Khan Alamgir and Mahabubul Haque Chisty (Babul Chisty) had already resigned from the post of directors of the bank, they added.

The board has also reconstituted executive, risk management and audit committees of the bank.

Meanwhile, the central bank of Bangladesh has issued a show cause notice against the Managing Director and Chief Executive Officer (CEO) of the FBL AKM Shameem asking him to explain why he will not be removed from his post.
The BB issued the show cause notice on Sunday and asked Mr. Shameem to explain his positive within seven working days.

Talking to BBN, a BB senior official said the central bank has issued the notice against the MD of the Farmers Bank in line with the existing Banking Companies Act.

The MD will have to explain two issues – about the ongoing liquidity problem of the bank and the fresh loan disbursement despite imposition of an embargo by the central bank.

The BB’s latest initiatives came against the backdrop of higher credit growth than deposit that has created liquidity problem of the bank.

As of August last, the bank’s total deposits amounted to BDT 51.70 billion and loan portfolio BDT 48.54 billion.
The bank’s advance-deposit ratio, generally known as ADR, has been crossed 85 percent for several months, which goes against central bank rule.

The central bank of Bangladesh had earlier set the safe limit of ADR at 85 percent for conventional banks and at 90 percent for Sharia-based Islamic banks.