Thermax defaults on dollar loans under export fund: Cenbank

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State lender Agrani Bank is in trouble to recover a whopping Tk790 crore loans it extended to apparel maker Thermax Group's seven establishments, which owe nine banks Tk1,822 crore, according to a Bangladesh Bank finding.

The central bank report says Agrani Bank increased its credit risk by providing loans to these establishments without considering the creditworthiness by not evaluating the liability to other banks when disbursing loans.  

Of the Tk790 crore, an equivalent of Tk252 crore borrowed by the group's six concerns in foreign currency under export development fund (EDF) facility turned overdue. However, the Bangladesh Bank later deducted the equivalent amount from Agrani Bank's foreign currency accounts after the specified period for repayment was over.

A senior official of Agrani Bank told TBS, "We gave the loans to Thermax establishments in dollars. The central bank deducted dollars from our bank account as the company did not repay the loan on time." 

A Bangladesh Bank inspection team assessed the loans to Thermax establishments in March this year.

EDF is the central bank's special facility for exporters to help them import raw materials with dollar loans. Entrepreneurs can take up to 270 days to repay this loan. Although the Thermax subsidiaries did not export goods in accordance with imports citing stock-lots, the central bank did not find the goods in the group's warehouses. The firms could not even give clear details on how to repay these foreign currency loans, the central bank report says.

Fazlul Hoque, general manager of Agrani Bank's Principal Branch at Motijheel in Dhaka that sanctioned the loans, told The Business Standard yesterday, "All overdue EDF loans of Thermax establishments have been turned into forced loans. Loans have been rescheduled with appropriate down-payment as per central bank policy. Currently the loans are regular."

Regarding the central bank's finding that the liability of other banks has not been properly assessed while lending to the Termex establishments, Fazlul Hoque said, "Our loans have been approved in accordance with the proper rules of the board. Customers' EDF loans have become overdue on the consequence of global economic turmoil."

Tk1,822cr loans with 9 banks

According to a central bank report, the seven establishments of Thermax Group owe a staggering Tk1,822 crore to nine different banks with Agrani Bank having the highest.

Other lenders include Social Islami Bank, United Commercial Bank, Islami Bank Bangladesh, Rupali Bank, Janata Bank, Al-Arafa Islami Bank, NRBC Bank, Sonali Bank and another sharia-based bank whose name was not mentioned in the report.

The Bangladesh Bank report shows Thermax Blended Yarn Limited has a total loans of Tk566 crore with six banks including Agrani Bank. Of the loans, Tk366 crore is currently outstanding.

It opened 14 LCs worth $10.89 lakh from EDF for import of textile raw materials, which it failed to repay within the stipulated period of 270 days. Later, the central bank deducted dollars equivalent to Tk98 crore from the foreign currency account of Agrani Bank.

Adury Apparels Ltd's loan amount to three banks including Agrani Bank is Tk339 crore, of which current outstanding balance is Tk265 crore.

The company showed its annual production capacity at 54 lakh pieces, though the central bank's inspection team found that the company has the capacity to produce 2.48 crore pieces of apparels, meaning that the company hid the production information.

Similar mismatches were found in other concerns of the group.

Stating the current lending policy of the bank, Fazlul Hoque said while pressing for recovery, they are also helping the companies to run their business.  "Now, if we collect Tk100 from the customer's business operations, we are offering a new back-to-back loan facility of Tk80, keeping the business activities of the customer normal.