Nine state-owned banks and financial institutions have waived Tk 3,684 crore interest on loans against 693 accounts over the last eight years, which the central bank thinks encourages 'unethical activities'.
In a report, Bangladesh Bank (BB) said an exit policy to bring a borrower out of the loan burden may be logical only when the borrower is genuinely affected.
The central bank placed the report yesterday at a meeting of the Executive Committee of National Economic Council (Ecnec) as the prime minister wanted to know about the waiver of interests in the last seven-eight years.
Planning Minister AK Khandker told reporters that the issue had not been discussed at the meeting. The finance ministry will take necessary steps in this regard, he said.
The BB report said waiving interest is a sensitive issue. Giving such privilege hampers normal loan recovery. It is better to avoid a waiver of loan as far as possible, the report said.
If necessary, a genuinely affected borrower may be helped by giving scope for loan rescheduling with relaxed conditions, the report said.
The report noted that the finance ministry and central bank can design an exit policy by discussing it between themselves.
The BB has no guideline or circular on waiver of interest. The issue is solely a concern of the financing banks. The banks waive interest as per their own policy and approval of their respective board of directors, the report mentioned.
As per an earlier Ecnec decision, the BB placed at the meeting the report regarding interest waiver of Tk 1 crore and above between 2001 and 2008.
According to the report, Sonali Bank has waived Tk 988 crore interest on loans against 215 accounts. The highest amount of Tk 255 crore was waived in 2007.
Janata Bank waived Tk 656 crore interest against 117 accounts with the highest amount of Tk 187 crore waived in 2004.
Agrani Bank waived Tk 947 crore against 115 accounts. The bank's highest waiver of interest was Tk 242 crore in 2008.
Rupali Bank waived Tk 183 crore interest against 56 accounts. The highest amount of Tk 63 crore was waived in 2008.
Bangladesh Shilpa Bank waived interest of Tk 325 crore against 63 accounts, and the highest amount was Tk 113 crore waived in 2001.
Rajshahi Krishi Unnayan Bank waived Tk 18 crore against 10 accounts. Of the amount, Tk 10 crore was waived in 2002.
Bangladesh Shilpa Rin Sangstha waived Tk 256 crore interest against 41 accounts with the highest amount of Tk 77 crore in 2001.
Basic Bank waived interest of Tk 12 crore against six accounts in 2007. It did not waive any interest in other years.
Ten firms got the highest interest waiver from five state-owned banks and five firms got the highest interest waiver from four specialised financial institutions. Some of those also took the privilege of interest waiver from government organisations.
THE BANKS AND THE BORROWERS
Sonali Bank: AR Hawlader Jute Mills Ltd - Tk 93.89 crore, Line Textile Industries Ltd Tk 80.87 crore, Meghna Condensed Milk Ltd- Tk 43.64 crore, River Side Leather and Footwear Ltd Tk 33.23 crore, Bosak Ltd Tk 26.33 crore, Nabarun Tanners Tk 10.71 crore, Bengal Oil Mills Tk 9.66 crore, Prime Edible Oil Ltd Tk 8.87 crore, Shahriar Fabrics Industries Ltd Tk 8.72 crore, Nabarun Tanner Tk 8.03 crore.
Janata Bank: BTMC Tk 103.67 crore, Kaliachapra Sugar Mills Ltd Tk 45.89 crore, General Electric Manufacturing Ltd Tk 38.86 crore, AR Jute Mills Ltd Tk 29.64 crore, Ratanpur Steels Ltd Tk 28.64 crore, Adrup Pharmaceuticals Ltd Tk 22.62 crore, Sea & River Service and River Line Navigation Tk 22.18 crore, Rahman Metal Industries Ltd Tk 20.87 crore, Rupali Tannery Tk 15.25 crore, Bangladesh Chemical Complex Tk 13.33 crore.
Agrani Bank: Shah Maqdum Textile Mills Ltd Tk 148.06 crore, Dhaka Match Industries Co Ltd Tk 63.92 crore, Orion Lab Ltd Tk 34.21 crore, Dhaka Jute Mills Ltd Tk 32.58 crore, Baher Hat Sea Foods Ltd Tk 32.22 crore, Bengal Steep Works Ltd Tk 31.78, Eastern Oil Ltd Tk 30.34 crore, Orion Infusion Ltd Tk 28.65 crore, Chand Textile Mills Ltd Tk 24.96 crore, Europa Group Tk 23.70 crore.
Rupali Bank: Mannan Brothers Ltd Tk 48.36 crore, Gausia Cotton Mills Ltd Tk 14.94 crore, Shah Jute and Plastic Industries Ltd Tk 9.99 crore, Motia Rahman Bhandari Tk 7.58 crore, Amico Laboratories Ltd Tk 5.40 crore, International Tannery Tk 5 crore, Asha Ceramic Industries Ltd Tk 4.08 crore, Steelco Private Ltd Tk 3.84 crore, SKM Jute Mills Ltd Tk 3.47 crore, Bionic Sea Foods Export Ltd Tk 3.34 crore.
Krishi Bank: Sundarban Sea Food Industries Ltd Tk 20.08 crore, Uloshi Himagar Ltd Tk 15.96 crore, Dewan Ice and Cold Storage Ltd Tk 14.64 crore, Nawapara Cold Storage Ltd Tk 14.29 crore and Aleya Cold Storage Ltd Tk 12.33 crore.
Shilpa Bank: Khaleque Textile Mills Ltd Tk 48.41 crore, Faridpur Textile Industries Ltd Tk 30.78 crore, Trimmer and Malinge Ltd Tk 47.27 crore, Banani Metal Products Ltd Tk 13.35 crore, Quality Jute Yarn Mills Ltd Tk 9.50 crore.
Shilpa Rin Sangstha: Hotel Sun and Shade Ltd Tk 45.30 crore, Al-Amin Ice and Cold Storage Tk 28.64 crore, Afsar Cotton Mills Ltd Tk 13.35 crore, Sonali Cold Storage Ltd Tk 12.85 crore, Adco Bangladesh Ltd Tk 12.36 crore.
Rajshahi Krishi Unnayan Bank: Aftab Textile Mills Ltd Tk 2.94 crore, Cassandra Fabrics Ltd Tk 2.44 crore, Noor Cold Storage and Industries Tk 2.29 crore, Tur Silk and Cotton Mills Ltd Tk 2.12 crore and Shuttle Fight Textile Mills Ltd Tk 2.10 crore.
Basic Bank Ltd: Bangladesh Dyeing and Finishing Industries Ltd Tk 6.22 crore, MK Refiner Tk 2.39 crore, Bangladesh Chemical Industries Ltd Tk 1.69 crore, Bangladesh Knitwear Ltd Tk 0.91 crore and Al-Islam Textile Ltd Tk 0.35 crore.