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Top 300 loan defaulters named in parliament

  • Published at 07:35 pm June 22nd, 2019
AHM Mustafa Kamal
File photo of Finance Minister AHM Mustafa Kamal Courtesy

The list showed that some 14,617 individuals and institutions took loans of Tk1,741,348 crore since 2009 while Tk100,183 crore got defaulted

Finance Minister AHM Mustafa Kamal has disclosed in parliament the names of the country's top 300 loan defaulters, worth Tk50,942 crore in unpaid loans.

"These loan defaulters took loans from various banks and financial institutions in the public and private sector, said the minister, responding to a query of ruling Awami League MP, M Israfil Alam, yesterday.

The top ten defaulters are Samannaz Super Oil Ltd with unpaid loans of Tk1,049 crore, while Galaxy Sweater and Yarn Dyeing Ltd had Tk984 crore in overdue loans, Rimex Footwear Ltd owes Tk976 crore, Quantum Power Systems Ltd Tk828 crore, Maheen Enterprise Ltd Tk825 crore, Rupali Composite Leather Wear Ltd Tk798 crore, Crescent Leather Products Ltd Tk776 crore, S.A Oil Refinery Ltd Tk707 crore, Suprov Composite Knit Ltd has an outstanding debt of Tk610 crore, and Grameen Shakti owes Tk601 crore.

The finance minister, Mustafa Kamal, said the outstanding debt burden of these loan defaulters is Tk70,571 crore while the classified amount is Tk52,837 crore, reports UNB.

Mustafa Kamal also disclosed a list of borrowers who took more than Tk five crore from all banks, financial institutions and the public sector, and have outstanding debts of about five crore taka or less.

Tk100,183 crore in bad loans since 2009

The list showed that some 14,617 individuals and institutions took loans of Tk1,741,348 crore since 2009  of which Tk100,183 crore is unpaid and in default. 

Responding to a tabled starred question from Workers Party MP elected for reserved women seats, Lutfun Nesa Khan, the finance minister said the number of loan defaulters in September 2015 was 111,954 involving Tk59,105 crore, but the number shot up to 170,390, with Tk102,315.19 crore in bad loans by December 2018.

He pointed out domestic and other reasons beyond control, which affected businessmen and entrepreneurs, raising the number of loan defaulters.

Kamal holds banks responsible

Finance Minister Mustafa Kamal also held banks responsible for not picking good borrowers.

He said the lack of collateral against loans, showing the same asset as collateral at more than one bank for loans, and showing the value of collateral higher than its true market value places any loan at risk. "As a result, there's a strong possibility for a loan to turn bad."

The finance minister said a stagnant situation prevails if any loan goes into default and this leads to a hurdle for both loan distribution and collection.

He said the government has given a special loan facility for rescheduling long unpaid loans, and a one-time exit on May 16, 2019, aiming to maintain the normal flow of loans to production and other sectors, in an effort to bring down loan defaults and ensure economic development of the country.

"With this, [we] hope the amount of unpaid loans will decline in the banking sector," he added.

Replying to Israfil Alam's question, the minister said the government provided Tk 13,612.60 crore between 2015-16 fiscal to 2018-19, to some banks which had been suffering from capital shortfalls.

'State-run banks waive Tk1198.24 crore in interest'

Replying to a question from ruling party MP, Haji Mohammad Salim, the finance minister said state-owned commercial and specialised banks waived interest to the tune of Tk 1198.24 crore last year against 6163 loans.

Agrani Bank Ltd waived the highest, amounting to Tk 494 crore against 2008 loans,  Bangladesh Krishi Bank waived Tk 435 crore in interest against 66 loans, Rupali Bank Ltd Tk 134 crore against 203 loans, Sonali Bank Ltd Tk 73 crore against 14 loans, Janata Bank Ltd Tk 54 crore against 2473 loans, Rajshahi Krishi Unnayan Bank Tk 4.35 crore against 1380 loans, and BASIC Bank Ltd waived Tk 1.69 crore in interest against 19 loans.

Bangladesh Development Bank did not waive any interest in 2008, he said.

It should be noted that earlier on May 15, Bangladesh Bank granted a huge waiver for loan defaulters to expedite debt servicing in the banking sector. 

In its directive, the central bank said defaulters could regularize their bad loans by paying only a 2% down payment, instead of 10-50%.

Although almost all sectors have been included in the latest loan rescheduling policy, the circular specifically mentioned a number of privileged priority sectors.

The top 10 defaulters are -- Samannaz Super Oil Ltd (Tk1,049 crore), Galaxy Sweater and Yarn Dyeing Ltd (Tk984 crore), Rimex Footwear Ltd (Tk976 crore), Quantum Power Systems Ltd (Tk828 crore), Maheen Enterprise Ltd (Tk825 crore), Rupali Composite Leather Wear Ltd (Tk798 crore), Crescent Leather Products Ltd (Tk776 crore), SA Oil Refinery Ltd (Tk707 crore), Suprov Composite Knit Ltd (Tk610 crore) and Grameen Shakti (Tk601 crore).