Tk 26,114cr debt rescheduled as central bank disposes of 900 out of 1,516 applications
About 300 companies, including top defaulter conglomerates, have applied to the Bangladesh Bank for loan rescheduling or restructuring facilities totalling around Tk 2 lakh crore in the first nine months of the year.
Applicants include S Alam Group, Beximco Group, Nassa Group, Orion Group, Deshbandhu Group, Bashundhara Group, Abdul Monem Group, Tanaka Group, Dandy Dyeing, Bengal Group, Ambient Steel BD, GPH Ispat, Prime Group, Anwar Group, Silkway Group, Shadab Fashion, and Apex Weaving, according to a BB report.
Sikder Group, Diamond Spinning Mills, Mim Group (Alema Textile), SMA Group (AA Knit Spin), BUC Agro, Rising Steel, Bling Leather Products, Ankur Specialised Cold Storage, Sourav Aluminium Works, Intensity Limited and Global Asset have also applied.
The businesses are seeking repayment periods ranging from five to 15 years, with down payments as low as 1 percent to 2 percent and grace periods of up to three years, officials familiar with the matter told The Daily Star.
Against applications seeking the rescheduling of Tk 196,047 crore in loans, banks rescheduled Tk 26,114 crore debts, including Tk 13,747 crore defaulted loans, according to the BB report.
In January, the central bank formed a five-member committee, led by the executive director of the Department of Offsite Supervision, to provide necessary policy support for restructuring or rescheduling corporate borrowers that defaulted due to factors beyond their control.
The committee's process of holding tripartite meetings with borrowing institutions or groups and financing institutions concluded on September 30.
Through a total of 43 meetings, the committee took initiatives to dispose of approximately 900 applications out of 1,516 from 300 groups, according to the BB report.
On September 16, the BB also issued a unified special loan rescheduling policy to maintain economic growth and for borrowers who had defaulted due to circumstances beyond their control.
The special rescheduling policy was issued to ensure equal opportunities for all affected borrowers, particularly those who generate investment and employment, and to provide policy support to genuinely distressed borrowers to maintain balanced and inclusive economic activities, said a senior official of the central bank.
The central bank yesterday held an emergency meeting with the Association of Bankers, Bangladesh (ABB) aiming to reduce the high amount of bad loans.
As of September, defaulted loans in the banking sector hit a record Tk 6.44 lakh crore, or nearly 36 percent of total disbursed loans -- the highest bad-loan ratio since 2000.
At the meeting, the central bank governor instructed banks to reduce the high volume of bad loans by using the BB's special loan rescheduling policy by December this year, said a chief executive of a private commercial bank seeking anonymity.
Bankers, however, fear this approach might encourage a culture of non-payment and weaken banking discipline, especially as it includes long-term defaulters linked to political patronage.
According to them, the scale of relief highlights the depth of the banking sector's troubles.
As of June, more than Tk 4.07 lakh crore in bad loans are stuck in 222,341 cases filed by banks to recover those loans, according to the BB report.
The backlog of cases persists mainly because the pace of disposing of old cases has slowed while the number of new cases continues to rise.
Between April and June, 11,944 cases were disposed of, from which banks recovered only Tk 2,910 crore. During the quarter, 14,652 new cases involving Tk 96,904 crore were filed.
