Dhaka, Bangladesh (BBN) – The Janata Bank limited has submitted the proposals of two business groups –Beximco and Thermax— to the central bank of Bangladesh for restructuring their large loans worth BDT 25.16 billion.
“The central bank is now scrutinising the proposals in line with the large-loan-restructuring policy,” Mohammad Naushad Ali Chowdhury, executive director of the Bangladesh Bank (BB) and head of the large loan scrutiny committee, told BBN in Dhaka.
The Beximco Group, one of the top business conglomerates in Bangladesh, has applied for restructuring loans worth BDT 18.49 billion against its five units while the lesser one the Thermax Group sought restructuring of its BDT 6.67 billion loans taken against four units, according to the proposals.
“We’ll submit reports after completing our scrutiny to the Banking Regulation and Policy Department (BRPD) of the central bank for taking next course of action,” the committee chief noted.
The central bank earlier formed a six-member inter-departmental committee to go through the terms and conditions, set by the central bank earlier for restructuring loans properly.
The Janata Bank Limited, a leading state-owned commercial bank (SoCB), is now working on a few more loan restructuring proposals for submission to the BB soon, Abdus Salam, chief executive officer (CEO) and managing director (MD) of the SoCB said.
The Beximco Group, which has a number of its units listed on the bourses, operates in textiles, pharmaceuticals, real estate, hospitality, marine food, commodities trading, information and communication technology (ICT), ceramics and aviation.
On the other hand, Thermax Group manufactures quality cotton yarn, melange yarn, woven fabrics, knit fabrics and knit apparels of high standard.
Talking to BBN, another BB top official said the banks will have to play a pro-active role to manage these loans prudently so that these loans may not become classified in future. “We’ll act professionally after receiving application for restructuring the large loan. The banks will have to face the consequences if they do not prudently manage such loans after restructuring.”
The central bank earlier determined large borrowers by the size of their outstanding loan portfolios – BDT 5.0 billion being the baseline.
Earlier on January 29 last, the BB issued a circular in this connection and asked the commercial banks to set up special cells for ensuring monitoring and supervision of the restructured loans.
The BB’s board of directors approved the policy on January 27 last allowing such loan rescheduling only if the business entities are hit by global or domestic shocks.