Bangladesh Bank has given special treatment to two companies of the Beximco Group, Shinepukur Ceramics and Beximco LPG Unit-1. Because they are loan defaulters, a legal bar had arisen to the two companies renewing loan facilities, opening letters of credit (LCs) and getting working capital. To remove the bar, the central bank has relaxed the prohibition in a section of the Bank Company Act.
Bangladesh Bank issued two separate notifications on the matter on Monday. Under them, the prohibition in section 27KaKa(3) of the Bank Company Act, 1991, will not apply to the two companies until 31 December next year.
The notification says that although Shinepukur Ceramics, a customer of Sonali Bank, is a loan defaulter, the legal prohibition has been relaxed in the interest of the state for the renewal of the working capital loan limit approved in its favour. Under this facility the existing working capital loan limit of Tk 105 crore is to be renewed.
No liability will arise for the government’s Finance Division against this facility, however. Nor will Sonali Bank be able to claim any kind of financial support from the government in future. All of Shinepukur Ceramics’ income must be kept in a specified bank account, and Sonali Bank’s dues must be paid regularly from that account on a proportional basis.
Section 27KaKa(3) of the Bank Company Act, 1991, says no bank or financial institution may give a new loan facility to a defaulting borrower. Because of this section, defaulting companies such as Shinepukur Ceramics face a bar to getting banking facilities. The company has now been exempted from the prohibition on special consideration.
Earlier, in July, Bangladesh Bank had allowed Shinepukur Ceramics to open letters of credit only for importing raw materials, on deposit of a 100% margin.
The group’s other company, Beximco LPG Unit-1, has been given a similar facility. For this defaulting customer of National Bank, the legal prohibition has been relaxed for opening letters of credit against a 100% margin and for the supply of working capital. This facility will also remain in force until 31 December next year.
The notification also says that to get the new loan facility, all of Beximco LPG Unit-1’s income must be kept in a specified bank account, and National Bank’s dues must be paid regularly from that income on a proportional basis. In this case too, no financial liability may be placed on the government and the bank may not claim financial support from it.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report