Bangladesh Bank (BB) has granted special banking facilities to two loan-defaulting companies of the Beximco Group, allowing Shinepukur Ceramics to renew its Tk 105 crore working capital loan with Sonali Bank and Beximco LPG to open letters of credit with National Bank.
The central bank issued separate notifications on Monday, allowing both companies to avail themselves of the facilities until December next year under special exemptions from the Bank Company Act.
According to one notification, Section 27Kaka(3) of the Bank Company Act will not apply to the renewal of Shinepukur Ceramics’ Tk 105 crore working capital loan limit with Sonali Bank.
The exemption was granted in the national interest under the authority vested in Bangladesh Bank by Section 121 of the Act.
On August 17, the central bank had already allowed Shinepukur Ceramics to open LCs against a 100 per cent margin.
The latest decision extends the company’s special banking support by permitting the renewal of its working capital loan facility.
Meanwhile, Beximco LPG has been permitted to open LCs with National Bank against a 100 per cent margin until December next year, according to the second notification.
Following the ouster of the Awami League government on August 5, 2024, Beximco LPG Unit-1 faced difficulties opening letters of credit, forcing it to procure raw materials from other domestic LPG companies to maintain market supplies.
The latest approval will enable the company to import raw materials directly.
Earlier, the Bangladesh Securities and Exchange Commission reconstituted the boards of three listed companies of the Beximco Group, excluding the group’s vice-chairman, Salman F Rahman.
Bangladesh Bank has imposed two conditions on the facilities granted to both the companies.
No liability can be created for the government in connection with the arrangements, while all revenues generated by the companies must be deposited into a designated account.
Payments to creditors must then be made from the account on a pro-rata basis.
Section 27Kaka(3) of the Bank Company Act generally bars banks from providing banking facilities to loan defaulters.
However, the law allows exemptions and special arrangements in consultation with the government.
Bangladesh Bank has exercised this authority to extend the latest facilities to the two Beximco Group companies, despite their default status.
Financial Mirror/AH
