Spl panel settles over 300 cases worth Tk 20b

A special panel on classified-loan recovery has so far settled more than 300 cases worth nearly Tk 20 billion under the post-uprising government's cleanup drive against bloated bad loans in the banking sector.
Officials and bankers said Thursday that within last seven months of operation of the government-formed classified loan-recovery committee resolved the cases in its nearly 30 meetings.
The committee is working to resolve some other big cases in next few meetings this month, said committee members and bankers involved with the crash course in default-loan recovery.
The Bangladesh Bank's 'selection committee for policy support to restructuring businesses and financial management' would complete its work by the end of this month as the central bank Tuesday issued a circular on the loan-rescheduling system.
Against the backdrop non-performing loan (NPL) buildups over the past years, the committee was formed on January 30 this year in tune with large-scale reforms kicked off following last year's regime change through uprising.
The committee members have said they have already recommended at least 300 cases for the settlement in different ways -- like allowing defaulters loan-rescheduling opportunity for the last time with a guarantee of repayment, extending the loan-repayment period, and interest waiver for business-exit plan.
Meanwhile, more than 1,300 applications for default-loan settlement have been filed before the committee seeking the settlements, sources said.
"Alongside hundreds of small companies, some big-shot corporates and businesses have also queued up with petitions for longer-term loan- repayment facilities from the recovery-support committee as they want to pay back the overdue and classified credits," says one source.
Among them, at least 65 big corporates have already applied for the settlement of their classified loans with their billions of taka of default loans hauled out from different commercial banks and financial institutions, the sources said.
Among the biggies are the struggling Gazi Group, Abdul Monem Group, Aman Feed, EnergyPack, Beximco Group, Desh Bandhu Group, Zahintex Industries Ltd, Amazing Fashion, and HKG Steel.
Besides, Ershad Brothers, Elegant Spinning and Textile Ltd, Tampaco Foils Ltd, ZahinTex, Universal Yarn, Rownak Spinning, Universal Yarn, and Spider Digital Security, among others, are in the queue seeking long-term loan-repayment facility.
The government panel has already scrutinised more than 350 applications of tycoons holding unpaid credits ranging from Tk500 million to Tk 80 billion in the process of recovery of the credits that have accumulated over the years of lending leniency, says a committee member.
The committee sat at least 32 times within its last 7-month period, a member of the committee told the FE.
"But this committee should not continue for long. So, we suggested the central bank to prepare a guideline for loan rescheduling by the non-willful defaulters. Accordingly, the BB issued the circular on Tuesday. Now we will sit frequently during the last two weeks of September for resolving some cases," he added.
The committee reviews whether the applicants with big NPLs or classified loans are willful or non-willful defaulters.
"Some borrowers have already rescheduled their loan thrice, some are stuck up for long even after three-time rescheduling, some businesses had already faced losses and some businessmen have already closed their businesses after facing losses," he said.
"So, we have recommended different solutions on a case-to-case basis of the default loans aimed at recovering those," he told the FE, requesting anonymity.
Among the solutions, they have recommended allowing defaulters loan-rescheduling opportunity for the last time with the guarantee of repayment within the fresh maturity period or extending the repayment period with the concrete assurance, or interest waiver for the business-exit plan, the member added.
"Besides, some big applicants have pledged repaying their non-performing loans (NPLs) and bad loans within an extended repayment period. But we have asked the lending agencies and the borrowers to submit detailed audit reports of their annual revenue earnings and loan-repayment capabilities in the future days," he said.
It is impossible to settle those classified loans without justifying their annual revenue earnings and loan-repayment capabilities by engaging reputed international auditors, he added.
Some big corporates and businesses have queued up with petitions for longer-term loan- repayment facilities.
The member of the committee said they won't allow those applications until the annual revenue-earning and loan-repayment plans of those borrowers are validated by internationally reputed audit firms.
The recovery committee has reviewed the problematic and non-performing loans taken from the country's different commercial banks and financial institutions at its last 32 meetings.
At all the meetings, the borrowers as well as banks and nonbanks' representatives were present to submit their views.