Padma Bank Limited

Padma Bank Limited the started its journey on 3 June 2013 as the Farmers Bank Limited. In the wake of capital and liquidity crises as well as financial scandals faced by the Farmers Bank Limited, this fourth generation bank started functioning as Padma Bank Limited after adopting its present name with effect from 16 March 2019. The renamed bank set a record in the banking industry of Bangladesh through inclusion of four state-owned commercial banks – Sonali Bank Limited, Janata Bank Limited, Agrani Bank Limited & Rupali Bank Limited, and the Investment Corporation of Bangladesh (ICB) as stakeholders having a total of 68 per cent of ownership of the Padma Bank Limited. The bank has its headquarters in Gulshan-1, Dhaka. It has 57 branches at different places and 1,200 employees as of January 2021.

During 2019, the deposits in Padma Bank was 0.4 per cent of the total deposits in all banks of Bangladesh, while the share for loans and advances was 0.5 per cent. The deposits recorded an annual increase of 8.85 per cent during 2019 and stood at Taka 48,577 million. On the other hand, the loans and advances marked an annual increase of 3.21 per cent by reaching Taka 55,365 million. The average interest rate spread between deposits and loans of the bank during 2019 was 1.96 per cent. The bank did not face any liquidity problem during the year. However, no loans were distributed by the bank for small, medium and large scale industries, as well as for agriculture during 2019. The remittances received by the bank during 2019 were Taka 788.70 million, while the amount spent for CSR (Corporate Social Responsibility) was Taka 28.8 million.

The sector-based loans and advances status of Padma Bank Limited at the end of 2019 was as follows: (a) working capital financing – 32.4%; (b) trade and commerce – 42.6%; (c) industries – 14.9%; (d) construction – 4.5%; (e) agriculture, fisheries and forestry – 1.3%; (f) transport and communication – 0.9%; (g) power, gas and water supply – 0.1%; (h) other loans – 3.3%.

The bank adopted automation for running its activities from the very beginning, and all its branches practice online banking. Future plans of the bank include successful implementation of green banking practices as instructed by Bangladesh Bank, and rapid increase in deposits, loans and advances. Besides, it plans to extend at least 5 per cent of total loans to farmers in accordance with Bangladesh Bank rules, and provide loans to marginal farmers, share-croppers, and industrial entrepreneurs – especially the new industrialists and female entrepreneurs. [Helal Uddin Ahmed]

References Banking Almanac: Banks and Financial Institutions of Bangladesh 2016. Dhaka: Shikkha Bichitra, December 2016; Report on Financial Institutions 2018-2019. Dhaka: Financial Institutions Division, June 2020; 3. Website of Padma Bank Limited.