BB allows defaulter Abdul Monem to open import LC

Bangladesh Bank (BB) has exempted defaulter Abdul Monem Sugar Refinery Ltd (AMSRL) from a provision of the Bank Company Act, 1991 until June 30, 2027, allowing it to open import letters of credit (LCs) despite its default status.

Banks extending the facility must maintain a 100 percent cash margin, according to a BB circular issued yesterday.

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The exemption suspends Section 27Ka (3) of the Bank Company Act, 1991, which bars loan defaulters from obtaining new loans or opening LCs.

BB approved the relaxation after receiving an application from the company, ahead of formal government approval, a senior central bank official said on condition of anonymity.

The move is meant to keep the refinery operational and ensure uninterrupted import of raw materials, the official said, describing it as part of the new government’s broader push to reopen shuttered factories, protect jobs and sustain production.

BB has been relaxing similar policy measures for other businesses while separately working to reduce the volume of non-performing loans, the official added. “This relaxation is part of a broader package of policy support being extended to businesses.”

The circular said neither the government nor the BB will bear any liability for credit extended under the exemption, and that banks will not be entitled to claim financial assistance from the government over it in the future.

Abdul Monem Group has outstanding loans of Tk 2,378 crore with several banks, including Agrani Bank, IFIC Bank, One Bank, and Social Islami Bank. Of the total, Tk 698 crore had turned non-performing as of March 2025.