Beximco, Thermax large loan restructuring prayers reach BB

The state-owned Janata Bank has sent to the central bank the applications of two business houses -- Beximco and Thermax -- for restructuring their large loans worth Tk.25.16 billion, officials said.
The Beximco Group, one of the top business conglomerates in Bangladesh, has applied for restructuring loans worth Tk 18.49 billion against its five units while the lesser one the Thermax Group sought restructuring of its Tk 6.67 billion loans taken against four units.
"We've submitted the proposals to the Bangladesh Bank (BB) in line with the existing large loan restructuring policy," Abdus Salam, chief executive officer (CEO) and managing director (MD) of the Janata Bank Limited, told the FE Tuesday.
He also said the Janata Bank is now working on a few more loan restructuring proposals for submission to the central bank.
"We've proposed interest rates of the loans in question as per the large-loan-restructuring policy," Mr. Salam said while replying to a query.
Under the existing large-loan-restructuring policy, the interest rate to be charged on the outstanding balance of the restructured loan could be a discounted one. But it shall not be less than the cost of fund of the banks concerned plus 1.0 per cent extra.
The CEO claimed that such loan restructuring will help the economy by generating new employment opportunities.  
The Beximco Group, which has a number of its units listed on the bourses, operates in textiles, pharmaceuticals, real estate, hospitality, marine food, commodities trading, information and communication technology (ICT), ceramics and aviation.
On the other hand, Thermax Group manufactures quality cotton yarn, melange yarn, woven fabrics, knit fabrics and knit apparels of high standard.
"We're now scrutinising the proposals in line with the large-loan-restructuring policy," said Mohammad Naushad Ali Chowdhury, executive director of the BB and head of the large loan scrutiny committee.
The central bank earlier formed a six-member inter-departmental committee to go through the terms and conditions, set by the central bank earlier for restructuring loans properly.
Mr. Chowdhury also said the committee has already completed their initial assessment of the proposals.
"We've already asked the state-owned commercial bank (SoCB) to provide some relevant documents to comply with the existing rules and regulations," the executive director of the BB said while replying to a query.
He also said the committee is now examining different issues including collateral of the restructured loans, cost of fund and repayment schedule.
"We'll submit the proposals after completing our scrutiny to the Banking Regulation and Policy Department (BRPD) of the central bank for taking next course of action," the committee chief noted.
Talking to the FE, a committee member said the SoCB has proposed interest rate on Beximco Group's restructured loans at 10 per cent while the rate on Thermax Group's loans at 13.50 per cent.
He also said the borrowers are allowed to repay their restructured term loans for maximum 12 years, while both restructured continuous and demand loans will be cleared in maximum six years.
The interested large borrowers will have to apply for recast of their loan portfolios by June 30 this year.
The BB earlier determined large borrowers by the size of their outstanding loan portfolios -- Tk 5.0 billion being the baseline.
Earlier on January 29 last, the central bank issued a circular in this connection and asked the commercial banks to set up special cells for ensuring monitoring and supervision of the restructured loans.
The BB's board of directors approved the policy on January 27 last allowing such loan rescheduling only if the business entities are hit by global or domestic shocks.
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