Bangladesh Bank has granted special permission to Abdul Monem Sugar Refinery Limited to open import letters of credit (LCs) at 100% cash margin, despite the company being a corporate guarantor of a defaulted loan. Under the exemption, the provisions of Section 27ka(3) of the Bank Company Act 1991 will not apply to the company until June 30, 2027.
The central bank issued the notification on Monday, citing powers under Section 121 of the Bank Company Act 1991.
The notification stipulated that no financial loss to the government or Bangladesh Bank may result from the facility. Banks are also barred from seeking any financial assistance from the government or central bank against loans extended under this exemption.
Under the Bank Company Act, guarantors of defaulted loans are also classified as defaulters and are barred from obtaining new credit facilities or opening LCs. The central bank’s notification relaxes this restriction for the company until June 30 of next year.
Sources said Abdul Monem Sugar Refinery is a corporate guarantor for a defaulted loan held by Abdul Monem Limited — the flagship company of Abdul Monem Group — at state-owned Agrani Bank.
According to Bangladesh Bank data from March 2025, Abdul Monem Limited has total defaulted loans of Tk 698 crore across 24 banks and financial institutions, including Agrani Bank, IFIC Bank, United Commercial Bank, and Dutch-Bangla Bank. Agrani Bank alone is owed approximately Tk 455 crore. Last August, the company applied to restructure these loans under special terms.
On June 7, the refinery applied to the Bangladesh Bank governor for the special LC facility at 100% cash margin, citing multiple active international contracts for raw sugar imports. The application warned that failure to open LCs on time could result in penalties of approximately $23,000 per day. With only a handful of sugar refineries in the country operating at full capacity, any disruption to imports could lead to sugar supply shortages in the domestic market.
The refinery is currently operated by Abul Khayer Limited under a sales agreement, with its sugar marketed under the “Starship Sugar” brand. The formal ownership transfer process has not yet been completed.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report