Bangladesh Bank has approved a loan rescheduling initiative of Janata Bank to recover a longstanding loan from AnonTex Group without affecting jobs and industrial production.
In approving the plan, Bangladesh Bank considered the greater interest of the economy and the rationality of the proposal in the current situation, both in the banking and industrial sector, official sources said.
While the central bank’s approval comes with some conditions, experts said lessons learnt from the loan recovery efforts from Hallmark and few other companies suggest that banks should take a more practical approach in their loan recovery efforts.
They said the past initiatives to recover loans from companies including Hallmark have created complex situations by suspending productions and affecting jobs.
But Janta Bank’s loan recovery efforts from AnonTex will help the company continue its production and maintain the active income source of thousands of families dependent on the company.
On the other hand, Janata Bank will be able to rein in its ballooning default loans.
Financial market analysts have hailed the move of the central bank. AnonTex Group has already paid the necessary down payment for the loan rescheduling.
The central bank approved the proposal with some conditions, sources said.
The banking sector experts said the central bank’s latest decision reflects the ground reality, adding that it would help banks increase income, lower NPLs and make investments in large industries by covering the losses of their branches.
The move is definitely a positive step towards keeping the export-oriented industries running which is the main income source for many dependent families amid the corona crisis that left many people jobless, they observed. They also suggested BB and Janata Bank strictly monitor Anontex Group’s activities separately.
In a letter issued on Tuesday last, BB informed that it decided to reschedule a total of Tk 35.64 billion loans of 17 business entities under AnonTex Group, including Lamisa Spinning Ltd, Zara Denim Ltd, Simran Composite Ltd, and Galaxy Sweter and Yarn Dying Ltd.
It also informed that the rescheduling will be effective after depositing Tk 716.4 million down payment to the concerned loan accounts.
AnonTex Group and Janata Bank sources said the group has repaid over Tk 18 billion after taking the loans from the bank seven and a half years ago.
The group repaid Tk 1.92 billion in 2014, Tk 2.36 billion in 2015, Tk 2.96 billion in 2016, Tk 3.42 billion in 2017 and Tk 2.86 billion in 2018. Despite the controversy, it repaid Tk 860 million in 2019 and in 2021 it was able to repay nearly Tk 870 million.
Janata Bank sources said AnonTex Group has already repaid Tk 860 million during the corona pandemic and gave customer consent for another Tk 250 million repayment. For this, the bank has formed a special team comprising experienced bankers to oversee and loan recovery.
Janata Bank authorities are keeping its loan information up to date from time to time by strict monitoring and nursing, its officials informed.
Meanwhile, an ACC letter suggests that it has cleared the graft allegations against the group as it did not find any evidence of swindling money through forgery.
Besides, an investigation of the graft watchdog did not find proof of fund embezzlement by different entities of the group, suggests another letter of ACC.
Janata Bank Managing Director and CEO Md Abdus Salam Azad said: “We’re grateful to the central bank for giving consent for recovering loans without shutting down the factories.”
“The group is sincere in repaying loans. Once the loans are rescheduled, they will play a positive role in preserving the bank’s necessary capital by lowering its classified loans and provisions. Above all, jobs of nearly 20,000 workers and staff of the group will be saved.” he added.
At the same time, the business of Janata Bank will also expand through new investments. As a result, the bank will be able to post profits, he also expressed hope.