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Mohrab Shamsul Alam, a wood trader in Chattogram, has become a loan defaulter of around Tk 145.37 crore after failing to repay the huge amount of loans taken from three banks in the name of business.
Officials of the National Bank, AB Bank and Premier Bank said Shamsul was one of the top wood traders of the port city who gained fame making lucrative profits in business.
Capitalising the goodwill, he and his son took huge amount of loans from different commercial banks but failed to repay the debts in time. All of his business ventures shut down one by one turning him into a defaulter of Tk 145.37 crore loans in three banks.
National Bank officials said Shamsul took a Tk 86.59 crore loan from Agrabad branch of the bank for his business firm MM Syndicate, but repeatedly failed to pay the instalments. Finally, the bank filed a case with the Money Loan Court to recover the loan.
On anonymity, a National Bank official said considering Shamsul’s present financial situation, it is impossible for him to pay Tk 1.5 crore interest annually, against the Tk 145.37 crore loans taken from three banks, by doing business.
“There is no alternative to sell the mortgaged land to recover the money,” the bank official said.
From AB Bank’s Chawkbazar branch in the port city, Shamsul secured loan for his two ventures – MM Trading and Shamsu’s Mill – mortgaging 58 decimal of land. He paid the instalments regularly in the first few months, but gradually became irregular, said officials of the bank.
The sources said Shamsul owes Tk 42.79 crore to AB Bank now. The bank has filed a cheque dishonour case with Money Loan Court to recover the money.
Later, even after failing to repay the previous loans, Shamsul and his son Mizanur Rahman again secured a Tk 15.98 crore loan from the Nizam Road branch of Premier Bank, in the name of their business venture M/S HM Steel.
Later, the Premier Bank filed a cheque dishonour case against the duo and is now preparing to auction 79 decimal lands in Chattogram and Narayanganj, which was kept as mortgage against the loan. The auction will be held on December 15 at the bank’s Nizam Road branch.
Habib Ullah, acting manager of the Nizam Road branch of Premier Bank, said the bank has initiated to auction the Shamsul and his son’s mortgaged land, after they applied for rescheduling the loan but failed to pay the down payment.
“We will file a case with the Money Loan Court if we fail to recover the money,” he said.
Meanwhile, visiting the spot The Business Post correspondent could not trace the MM Syndicate at the specific address mentioned in papers submitted to National Bank. Locals also know nothing about it. Shamsul Alam’s mobile phone was found switched off when this correspondent tried to contact him several times.
Economic analyst Rafiqul Islam said that the banks failed to inspect capacity, skill and ability of the entrepreneur before lending the money. The loans were provided basing on the idea that profit would be made ultimately if the money is invested. But the banks should have considered global market condition as well as demand and supply situation in the domestic market before granting such loans.
“But the banks did not take these into account. They invested just by looking at the name of the person, and his position in the market. As a result, the board of directors of those banks cannot avoid liability, but ordinary bank officials bear the brunt of the mistake,” he said.
“Businessmen are taking loans in the name of one sector and investing in another sector. Using the bank loans, they indulge in luxuries and money laundering. As a result, due to the working capital shortage, the businesses collapse and suffer losses,” Rafiqul Islam observed.
“And the businessmen live a life hidden from the public eye. Even their children are not interested in taking responsibility of these businesses,” he concluded.
