Special Loans of Tk 12,500 Crore Granted to Three Banks

To cover deficits from the outgoing year, Bangladesh Bank has provided special loans totaling Tk 12,500 crore to three private-sector banks. These funds were used by the banks on Monday, the final day of the year, to address deficits in their current accounts. As a result, the current accounts of these three banks were shown in surplus.

The three banks that received special loans are Islami Bank, National Bank, and AB Bank.

Officials from Bangladesh Bank stated that the loaned funds will be reclaimed by the central bank today (Wednesday) to balance financial accounts. Additionally, outside of the special loans, AB Bank received Tk 200 crore in separate liquidity support.

Reasons Behind the Loan
According to sources, these three banks have faced severe liquidity crises over the last 15 years due to various irregularities. Of particular note, Islami Bank—after coming under the control of the Chattogram-based S. Alam Group—suffered major misuse of funds, with the group extracting Tk 73,000 crore through irregular loans, representing almost 50% of the bank’s total loan portfolio.

Similarly, National Bank has been exploited by its stakeholders, including Sikder Group, alongside entities like Beximco, Maisha Group, Bashundhara, FMC, Saif Port Holdings, Saif Powertec, NASA, Fu-Wang Foods, SS Steel, and Karnaphuli Group, all of whom extracted large sums under the guise of loans. Many of these loans are now non-performing. Among them, the loans taken by the late Aslamul Haque's Maisha Group—a former ruling party MP—have already defaulted.

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Other notable defaulters include Bloom Success International, Broadway Real Estate, Nurjahan Group, Diking Smart Battery, Ehsan Group, Millennium Group, Opex Sinha Group, Mariam Construction, RSA Capital, Keya Cosmetics, Independent TV, and GMG Airlines.

AB Bank has also been struggling with liquidity issues for years due to irregularities. One of its key founding figures is former BNP foreign minister M. Morshed Khan, under whose family control the bank operated for years. The bank has also been involved in significant fraud and irregularities.

The Central Bank's Intervention
Due to irregularities, these banks have long failed to meet the required Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) set by the central bank. The treasury bills and bonds they held for SLR purposes had already been mortgaged to secure loans from the central bank, leaving them without further collateral to raise funds.

As a result, Bangladesh Bank granted these special loans to ensure that the banks could show surplus balances in their current accounts on the last day of the year.

Of the Tk 12,500 crore loan, Islami Bank received Tk 5,500 crore, National Bank received Tk 6,000 crore, and AB Bank received Tk 1,000 crore. These loans come with an interest rate of 11.5%. The borrowed funds, issued on Monday, are to be returned on Wednesday (January 1).

Additionally, apart from the Tk 1,000 crore special loan, AB Bank was granted an extra Tk 200 crore to meet its daily liquidity needs.