Citycell shutdown: Nine banks, three FIs in trouble

According to the Bangladesh Bank, Citycell has taken Tk1,500 crore loan from different commercial banks and financial institutions. Of the amount, some banks and financial institutions are the guarantors of Tk1,200 crore. “Citycell failed to repay loan as it is mired into the financial crisis over the last one year,” said a BB official. Even after the extension of loan agreement with some banks, the company failed to continue to repay loan, he added. BB recently wrote nine banks and three financial institutions not to release fresh loan to the struggling Citycell unless meet earlier installments of loans. According to the central bank, as the guarantor of the Citycell loan, AB Bank paid Tk600 crore to different banks, City Bank Tk145 crore to BRAC Bank and Prime Bank Tk25 crore to a bank. NCCB was also the guarantor of the Citycell loan and Mutual Trust tried to realise Tk40 crore from the company. On Monday, Supreme Court gave the Citycell two month time to pay its Tk477 crore regulatory dues, two-third of which has to be paid within the next thirty days. The telecom regulator, in a public notice on July 31, asked Citycell subscribers to shift to other operators by August 16. Later, the deadline was extended to August 23. However, in last week, the High Court directed that the mobile operator can continue its operation ‘unhindered’ until September 16, as BTRC has already given Citycell 30 days’ time to explain its position. The country’s lone CDMA operator has seen drastic fall in the number of its subscribers during the last few years. Even before the recent BTRC move, the total number of Citycell subscribers stood at 0.7 million, down from 1.9 million in 2011. Currently, the company is estimated to have 0.2 million subscribers.