Bangladesh for the first time in its 47 years of history defaulted on servicing any external debt and faced penalty.
Officials said this happened in the case of much-touted Bangabandhu Satellite-1 project under which Bangladesh blasted a satellite into the orbit on May 11.
Ministry of Finance (MoF) has ordered an investigation and take action, including realising the money paid as penalty from those responsible.
Bangladesh Telecommunication Regulatory Commission (BTRC) took 147 million euro from Hongkong and Shanghai Banking Corporation (HSBC) France to fund the project, the officials cited.
The government issued state guarantee in favour of the BTRC to get the loan.
The telecoms regulator was due to start repaying it through 12 instalments from March 11, 2018.
But, according to HSBC officials, the BTRC paid the first instalment 10 days after the date fixed for it.
Only in case of three instalments, it made payment in time, the HSBC officials told the MoF.
The BTRC was due to pay 7.82 million euro as both principal and interest amount on October 11 but the payment was made on October 22, prompting the HSBC to ask the telecom regulator to pay 8,395 euro in penalty.
Sources said due to repeated failure to make timely instalment, the MoF convened a meeting on October 17 to discuss the issue, but no official from the BRTC attended it.
Later on October 24, the MoF held another meeting with finance division additional secretary Ekhlasur Rahman in the chair.
Sources said BTRC director (finance) Ashis Kumar Kundu told the meeting that they were not aware of the instalment payment schedule, thus could not make payment in time.
The project director did not inform the telecom regulator of the repayment schedule, he said. However, Posts and Telecommunications Division additional secretary Saiful Islam, who is also managing director of Bangladesh Communications Satellite Co Ltd, at the meeting said it is the BTRC that took the loan against state guarantee.
Its officials cannot avoid the responsibility for non-payment of loan instalments on the excuse of not having payment schedule, he added.
When contacted over phone on Friday, MoF additional secretary Mr Rahman said the incident caused both financial loss and image crisis for the country.
"In the history of Bangladesh, there is no such instance of failure in debt servicing and facing penalty. It will definitely impact the country's credit rating," he said.
Mr Rahman said the BTRC has been handed a strongly worded warning to be cautious in such cases to avoid recurrence of such an incident.
"We also asked the telecoms ministry and the BTRC to find out officials responsible for the incident and take tough action against them," he mentioned.
The same day, BTRC acting chairman Jahurul Haque, however, claimed that payments were made in time.
He said he was not aware of the penalty being imposed by the HSBC.
A problem occurred in only one instalment payment due to miscommunications, Mr Haque told the FE.
"The delay in paying installation occurred not for anyone's intention, but due to procedural complications," he maintained.
Mr Haque rather defended his men over the incident and blamed the HSBC for the payment mismatch.
The HSBC initially said the interest rate will be 1.5 per cent, but it is realising over 3.0 per cent in the name of various charges and fees, he cited.
Replying to a query, the official said project officials did not inform the BTRC of the loan repayment schedule.
As to any investigation is launched or action taken against any officials centring the incident, he answered in the negative.
"We can give a warning to the officials concerned. If we blame someone or realise money from them, nobody will show interest in working," he said.
Former finance adviser to a caretaker government AB Mirza Azizul Islam termed the incident 'unfortunate' when the country has enough foreign currency reserves.
"The issue needs to be investigated properly to find out what type of bureaucratic tangle was there behind it," he said the FE on Friday.
"Such a matter can send the wrong signals to the rest of the world about Bangladesh," Mr Islam added.
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