BANGLADESH: BJMC Owes Tk 5.0 Billion in Overdue Loan

The Bangladesh Jute mills Corporation (BJMC) owes about Tk 5.0 billion in overdue loan to Agrani Bank Ltd, making the smooth operation of the state-owned lender difficult, a top banker said.

Neither the BJMC nor the Ministry of Finance (MoF), which stood as guarantor for the loan, has not been showing any interest to repay the loan, he alleged.

The loan was extended to seven mills under the Corporation. The original loan that amounted to Tk 1.01 billion, increased to about Tk 5.0 billion at the end of March 2010, banking sources said.

"The BJMC has expressed its inability to repay the borrowed money citing its poor financial health," a high official of Agrani said.

The MoF, apparently, has forgotten the issue as it is neither arranging fund for BJMC to repay the loan of the bank nor it is issuing any further guarantee against the outstanding loan amount, he added.

According to Agrani bank, the loans were disbursed against Adamjee Jute Mills ltd, Gul Ahmed Jute Mills ltd, M. M. Jute Mills ltd, R. R Jute Mills Ltd, Peoples Jute Mills Ltd, Carpeting Jute Mills Ltd and Star Jute Mills Ltd.

A number of jute mills of BJMC including the world's largest Adamjee were closed over the years keeping the issue of loans taken from state-owned banks unresolved. The MoF, for lack of proper policy and fresh fund, has shelved the issue for long, sources said.

Besides Agrani, three other banks-Sonali, Janata and Rupali also have large amount of loans stuck up with the BJMC, they added.

When asked an official in the MoF said they would soon sit to settle the issue of outstanding bank loans of state-owned banks (SCBs), namely, Sonali, Janata, Agrani and Rupali.

'All the four banks, particularly Agrani and Rupali's banking operations are being hampered badly due to the overdue loans of BJMC," a top MoF official aid.

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Added: July 13, 2010 Source: Finance Express
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