The state-run Janata Bank is craving for rescheduling the default loan of Tk 3,742 crore belonging to AnonTex Group under easy terms to reduce its high amount of Non-Performing Loans (NPLs).
As part of the move, the lender on November 29 this year applied to the Bangladesh Bank to seek No Objection Certificate (NOC).
The public sector bank gave a loan of Tk 3,527.9 crore to AnonTex violating rules. Now it wants to reschedule the defaulted loans owned by 16 companies under the group.
“We received the application from Janata Bank on December 01, and arranged a meeting on the issue, but are yet to take any decision,” a high official of the central bank said, seeking anonymity.
He added that it would not be possible to issue NOC to the bank as per the central bank regulation as the latter found huge irregularities and fraud in the loans.
The state-run bank had earlier made such an application for NOC but was rejected by the central bank, as per the BB official.
AnonTex Group on December last year applied to Janata Bank for rescheduling its Tk 3,742 crore default loans by depositing a down payment, which was lower than the required amount set by the banking regulator.
The garment manufacturer is seeking rescheduling facility by paying only 2 per cent down payment, however, a defaulter has to pay 10 to 50 per cent, as per the rule.
Then on December 29 the same year, the bank took the issue to its board of directors’ meeting and approved the AnonTex’s proposal.
The Business Post correspondent tried to reach Janata Bank Managing Director Md Abdus Salam Azad and Chairman SM Mahfuzur Rahman over phone yesterday but to no avail.
Both the bank high-ups did not receive the phone call.
However, a few days ago, the bank chairman told this correspondent, “We have made the decision after discussing with all the members of the board.”
Between 2010 and 2015, 22 companies of AnonTex Group were given about Tk 3,527.9 crore in loans by Janata Bank which is more than 25 per cent of the lender’s capital base and which was in violation of the single borrower exposure limit set in the Bank Company Act 1991.
As of September last year, the total loans held by the group stand at Tk 6,528.6 crore. Of the sum, Tk 2,800 crore went default that was rescheduled in 2019.
Now the 16-year-old garment manufacturer wants to regularise the rest of the sum.
Asked about it, AnonTex Managing Director Md Younus Badal declined to make any comment in this regard.
Janata skips legal action against AnonTex loan fraud
After numerous irregularities were unearthed in the issuance of loans for AnonTexGroup during a central bank probe, the banking regulator in 2018 ordered Janata Bank to conduct a functional audit and take legal action against those involved in the scandal.
But the state-run lender did not conduct any functional audit regarding the issue, nor made any legal move against AnonTex Group in the last three years.
Janata Bank’s financial health
Now Janata Bank has the highest defaulted loans in the country’s banking sector, with its NPLs standing at Tk 13,837.17 crore till September this year which was 22.23 per cent of the total outstanding loans of the bank.
However, the amount was Tk 5,818 crore at the end of 2017.
The sharp increase in its bad loans has largely been attributed to the failure of loan repayments by the bank’s clients -- Crescent Group and AnonTex.
The bank lent over Tk 10,000 crore to Anon Tex and Crescent Group violating the BB’s single borrower exposure limit criteria, according to the BB’s inspection report.
