Bangladesh Bank has approved the initiative taken by Janata Bank to recover its loan from AnonTex Group. The central bank has taken the decision in the interests of the economy, including employment.
In a letter issued on Tuesday, BB informed that it has decided to reschedule a total of Tk 35.64 billion loans of 17 business entities under AnonTex Group, including Lamisa Spinning Ltd, Zara Denim Ltd, Simran Composite Ltd, and Galaxy Sweater and Yarn Dying Ltd.
Top officials of commercial banks appreciate the central bank’s approval of recovering the loan without affecting jobs and industrial production.
Economic analysts and experts say initiatives taken in the past to recover loans from companies including Hallmark created complex situations as they affected jobs and production.
Although the central bank has given the approval with some conditions, experts say the past experiences of recovering loans suggest that banks should take a more practical approach in their loan recovery efforts.
Talking to the Bangladesh Post, Md Abdus Salam Azad, CEO and Managing Director of Janata Bank Limited, said, “I appreciate Bangladesh Bank for approving the initiative of Janata Bank in recovering and regularising default loans.
He said the initiative would help the bank reduce its classified loans of around Tk 2,500 crore resulting in a decline in the provision and a rise in profit.
The CEO mentioned that they have taken the initiative to recover the loan of AnonTex without closing their factories.
“The company is very sincere in repaying the loan. Around 20,000 workers of AnonTex will remain employed. The business of the bank will also expand with the new investments. Our past experience in recovering default loans showed that it is not possible to recover a loan by closing down a manufacturing factory. The initiative regarding AnonTex will make it easier to recover the loan,” he added.
He further said Janata Bank has turned around in 2021 by achieving success in various indexes. The bank's operating profit has increased, the number of branches facing losses has decreased and deposits increased, he added.
One of the reflections of turning around is the regularisation of AnonTex Group loan, Abdus Salam Azad said.
He mentioned some of the achievements of Janata Bank including the continuation of banking services through the Core Banking System (CBS), without any hassle to the customers, where many other banks have failed.
“Janata Bank has ranked first among all public and private commercial banks in the cyber security drill competition. We successfully implemented Disaster Management System while continuing the activities of the main server. We also received Certificate of Merit for the best presented annual report from ICAB,” he said.
Banking sector experts say the central bank’s decision shows recognition of the ground reality.
According to them, the decision will help banks increase income and decrease non-performing loans (NPL).
This move is being admired as a positive step towards keeping the export-oriented industries running while recovering default loans. This decision would help thousands of families maintain an active income source who are dependent on the factories for their livelihoods.
The central bank in its letter said the rescheduling will be effective after depositing Tk 716.4 million in down payment to the loan accounts.
According to Janata Bank sources, AnonTex Group has already repaid Tk 860 million during the Covid-19 pandemic and gave consent for another Tk 250 million repayment. Janata Bank has formed a special team of experienced bankers to supervise loan recovery.