Govt to issue bond against SoEs' overdue loans with Rupali Bank

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Nazmul Ahsan
The government has decided to issue bond worth Tk 6.78 billion to the largely state-owned Rupali Bank Ltd soon against the money the state-owned enterprises (SoEs) and other government organisations owe to the bank, a high official in the Ministry of Finance (MoF) said.
The interest-bearing bond will be equivalent to the principal amount of loan that the bank extended to various SoEs and government entities. However, no decision has been taken yet on the accumulated interest, amounting to over Tk 9.50 billion, official sources said.
The major part of the Rupali Bank's classified loan, amounting to Tk. 16.30 billion, as of June 30 last, was recoverable from the public sector entities.
"We have decided to issue bond worth Tk 6.78 billion to Rupali against the SOEs loan," a high official in the MoF said.
"With the issuance of the bond, the long-pending issue of Rupali's stuck-up funds with the SoEs would be resolved. The normal operations of the bank are being affected due to the overdue loans."
The MoF is yet to decide on the tenure and rate of interest of the bond. But, the matter is expected to be resolved soon, a source said.
According to the data, the now-closed Adamjee Jute Mills owes the largest amount of overdue loan, Tk. 7.58 billion, to the Rupali Bank, followed by the Bangladesh Textile Mills Corporation, Tk 1.54 billion, the Bangladesh Agriculture Development Corporation, Tk 1.23 billion, the People's Jute Mills, Tk 1.08 billion, the Bangladesh Jute Mills Corporation, Tk 930 million, the Food Ministry, Tk 484 million, the Crescent Jute Mills, Tk 376 million, the Karim Jute Mills, Tk 312 million, and the Sylhet Pulp and Paper Mills Tk 152 million.
Besides, the Khulna textile Mills owes to the Bank Tk 95.6 million, the Khulna Newsprint Mill Tk 77 million, Bangladesh Aroma Tea Ltd Tk 44.4 million, Bharat Tea Estate Tk 39 million and the National News Publication Tk. 72 million.
Rupali Bank sources said they had to give loans to the SOEs at the insistence of the MoF since the government owns 94 per cent of the Bank's stakes.
Earlier, Rupali in a letter to MoF sought interest -bearing government bond worth Tk 16.30 billion against SOEs loan and approval of for issuing 1:3 rights shares to increase its paid-up capital.
However, a top official in the MoF said the ministry is not ready yet to approve the proposal to issue rights since it would cost the exchequer about Tk 4.0 billion.