STAR BUSINESS REPORT

The crisis-hit Padma Bank has sought a Tk 3,500 crore bailout package from the Bangladesh Bank (BB) to continue its banking operations, but the regulator is planning to either merge or liquidate the troubled lender.

According to officials familiar with the matter, the Department of Offsite Supervision (DOS) of the BB has prepared the bank’s diagnostic review report, which will now be forwarded to the Bank Resolution Department, a newly formed unit implementing the Bank Resolution Ordinance, 2025.

The department is currently handling the merger procedures of five shariah-based banks — First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and EXIM Bank.

A senior official of Bangladesh Bank, speaking on condition of anonymity, told The Daily Star that offering liquidity support or a bailout package to Padma Bank at this stage would be “a waste of money.”

The DOS, in its Diagnostic Review Report (DRR), states that Padma Bank’s “condition is critical across all financial indicators, and it appears there is no prospect of improvement.”

“That is why the BB has decided in principle not to provide any liquidity support to the crisis-hit lender,” the BB official noted.

Earlier, the banking regulator provided liquidity support to more than a dozen weak banks since the appointment of the new governor at the central bank, but the majority of them are yet to repay the funds, the official added.

According to the DOS report, Padma Bank’s capital is currently negative, with 92 percent of its loans classified as non-performing.

At the end of June 2025, the bank’s total loans stood at Tk 5,598 crore, of