The Farmers Bank Limited (FBL) has appealed to the central bank for enhancing the yields on its subordinated bonds to 10 per cent from existing 9.0 per cent, officials said.
"We're working on the issue," a senior official of Bangladesh Bank (BB) told the FE Sunday, replying to a query about re-fixing the interest rate on the bonds.
The BB permitted the problem-ridden bank on December 11 last to float subordinated bonds worth Tk 5.0 billion for increasing the bank's capital base.
"We've appealed to the central bank seeking upward revision of the interest rate on the bonds to make the debt instruments popular among the subscribers," said FBL chairman Mohammad Masud.
He said the restructured board of the bank now working to solve the ongoing liquidity problem of the fourth-generation private commercial bank. "We've already injected Tk 170 million in the bank in the form of deposit in line with the BB's advice."
Earlier on November 28 last, the BB asked the reconstituted board to improve overall financial status of the bank within next three months.
The board has also been advised to gear up the loan- recovery drive and take austerity measures to minimise its expenditure.
The bank suffered liquidity setback mainly due to higher credit growth than the deposit growth, according to the BB officials.
The bank's advance-deposit ratio, generally known as ADR, crossed 85 per cent in last several months, going beyond the regulatory threshold, they added.
The central bank had earlier set the safe limit of ADR at 85 per cent for conventional banks and at 90 per cent for Shariah-based Islamic banks.
On the other hand, a special inspection is being carried out to assess the bank's actual financial health.
Two of the bank's branches -- Gulshan and Motijheel -- along with its headquarters, have already been investigated by the central bank inspectors.
Sources, however, said the inspection report would likely to be submitted to the authorities concerned by the end of this week.
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