BB allows loan rescheduling for 250 firms for up to 15 years
The central bank has approved a mega loan rescheduling facility for some 250 companies, including some of the country's biggest corporate defaulters, in an attempt to boost business activity amid slowing economic growth.
The Bangladesh Bank (BB) will allow these firms to extend loan repayment over 5 to 15 years, with down payments as low as 1 percent and grace periods of up to 3 years, officials familiar with the matter told The Daily Star, adding that the terms will, however, vary case by case.
For all latest news, follow The Daily Star's Google News channel. The approved list includes conglomerates such as Abdul Monem Group, Orion Group, Deshbandhu Group, and Tanaka Group, all of which have hundreds of crores of taka in defaulted loans across multiple lenders.
Others represent sectors from steel and textiles to agro-processing and footwear manufacturing.
Contacted, Areif Hossain Khan, executive director and spokesperson of the central bank, said, "Around 1,250 businesses applied for special policy support, of which some 250 were selected."
He added the scheme is meant for aiding companies hit by foreign-exchange losses, energy shortages, and those that suffered under political retaliation during the previous government.
Khan said that willful defaulters will be excluded.
The initiative comes eight months after the central bank formed a five-member committee to assess corporate borrowers whose loan defaults were deemed beyond their control.
Of the selected businesses for the scheme, Abdul Monem Ltd has non-performing loans of Tk 698 crore at 24 banks and non-bank financial institutions, including Agrani Bank, IFIC Bank, United Commercial Bank, and Dutch-Bangla Bank, according to central bank data as of March 2025.
"Due to the Russia-Ukraine war and the Covid pandemic, our work volume dropped significantly. Previously, we were implementing projects worth Tk 50 to 60 crore per month, but during the Covid period, for about a year, this fell to just Tk 2 to 3 crore a month. Recently, we have managed to reach Tk 20 to 25 crore a month, and we believe the results can improve further if we secure working capital financing from banks. The sooner we obtain such financing, the better it will be for us," said ASM Mainuddin Monem, managing director of Abdul Monem Limited, in an interview with The Daily Star.
"When I assumed the role of managing director in 2021, our bank loans stood at Tk 2,137 crore. Since then, the amount has risen due to high interest rates not being able to achieve the expected volume of work," he noted.
Monem explained that despite making repayments, the outstanding balance continues to grow because of the prevailing 16 percent interest rate. "How can we run a business while paying such a high rate on our loans?" he asked.
He also pointed to the sharp depreciation of the taka in recent years. "The exchange rate used to be Tk 80 to 86 per US dollar. Now, it is Tk 120," he said.
Orion Oil and Shipping, a subsidiary of Orion Group, holds Tk 882 crore in bad loans. It has defaulted at state-run Janata Bank, Rupali Bank, AB Bank, United Commercial Bank, and CVC Finance as of March this year.
Salman Obaidul Karim, managing director of Orion Group, confirmed to The Daily Star that they will receive special policy support for rescheduling loans.
"Orion Oil and Shipping Ltd became default due to foreign exchange losses amid forex market volatility," he said.
Tanaka Group owes Tk 926 crore in defaults at Agrani Bank alone, while Deshbandhu Group has also been approved for support, according to central bank data.
Other firms approved for the facility include Dandy Dyeing Limited, Bengal Group, Ambient Steel BD, GPH Ispat, Prime Group, Anwar Group, Silkway Group, Shadab Fashion, and Apex Weaving.
Diamond Spinning Mills, Mim Group (Alema Textile), SMA Group (AA Knit Spin), BUC Agro, Rising Steel, Bling Leather Products, Ankur Specialised Cold Storage, Sourav Aluminium Works, Intensity Limited, and Global Asset Ltd are also going to get the special facility, according to the central bank.
"We are a regular client of the bank. However, to keep our production fully operational and maintain good relations with the bank, we have applied to Bangladesh Bank for policy support," said Mohammed Jahangir Alam, managing director of GPH Ispat.
In January this year, the central bank formed a five-member committee, led by the executive director of the Department of Offsite Supervision, to provide necessary policy support for restructuring or rescheduling corporate borrowers that defaulted on loans due to factors beyond their control.
Since then, it has met dozens of firms, offering tailored terms ranging from minimal down payments to extended repayment schedules.
The initial deadline for applications was April 30, but the tenure was later extended till May 31, The Daily Star learned from members of the committee.
On condition of anonymity, a member of the committee said, "Different kinds of policy support will be provided based on specific demands and needs."
"Some companies are likely to receive a lower down payment, while others may get longer repayment terms to keep their operations running," the member added.
Bankers, however, fear this approach might encourage a culture of non-payment and weaken banking discipline, especially as it includes long-term defaulters linked to political patronage.
According to them, the scale of the relief highlights the depth of the banking sector's troubles.
Defaulted loans hit a record Tk 4,20,335 crore at the end of March, following a sharp increase after the political changeover in August last year.
Many borrowers halted repayments in anticipation of policy relief, making recovery even harder for banks.
"We are facing a tough situation with loan recovery. Nearly all borrowers have halted repayments after applying to the central bank for policy support," said a senior Agrani Bank official on condition of anonymity.
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