AnonTex Group, who had a staggering Tk 7,100cr in liabilities with the scam-hit Janata Bank, secured an interest waiver of Tk 2,051cr under the ‘One Time Exit’ policy, but there are serious concerns whether it would be able pay off the remaining Tk 5,049 crore debt by June this year.

Janata Bank disbursed around Tk 3,527.9 crore in loans among 22 companies of AnonTex Group between 2010 and 2015. This figure exceeds 25 per cent of the lender’s capital base, and violates the Single Borrower Exposure Limit set by under Bank Company Act 1991.

According to Janata Bank Chairman SM Mahfuzur Rahman, the bank’s board of directors granted the interest waiver facility to AnonTex in November last year. The company has already paid back Tk141 crore, bank officials say.

Industry insiders however point out that such loan irregularities are one of the key factors behind Janata Bank’s deteriorating financial health.

This has become a controversial matter within the banking industry, with many wondering how exactly AnonTex will repay this large amount of debt within June this year, after being unable to pay loan installments regularly in the last few years.

A number of Janata Bank officials claimed that the S Alam Group, a conglomerate in Bangladesh, is taking over the debt of AnonTex. Mahfuzur said AnonTex will conclude dealings with the Janata Bank within the next six months.

When asked about the reported takeover of AnonTex loans by S Alam Group, Mahfuzur said, “The group has bought several AnonTex companies, along with their liabilities in our bank, but we do not know S Alam Group’s upcoming plans in this regard.

“The recovery of loans is our first priority, and we are not interested to learn about other details.”

He continued, “We waived the interest on AnonTex loans as per central bank policy. There is a provision to waive interest, which is subjected to the recovery of cost of funds. This is a standard practice used for recovering bad loans.

“If the whole process is completed successfully, Janata bank’s financial health will improve. We acknowledge not being able to recover AnonTex loans for years. This process is underway with approval or NOC (no objection certificate) from the finance ministry and the central bank.”

BB claims no knowledge
Central bank officials said there are regulations and circulars on loan rescheduling and interest waiving processes, and any bank can reschedule or waive interest of loans as per those regulations.

It is not mandatory to secure prior approval from the Bangladesh Bank in such matters, they added.

Commenting on the issue, Bangladesh Bank Executive Director and spokesperson Md Mezbaul Haque said, “I am not aware about the issue because central bank approval is not essential for waiving interest or rescheduling loans.”

Expressing his concerns, Policy Research Institute of Bangladesh’s Executive Director Ahsan H Mansur said, “I have serious doubts whether AnonTex will be able to repay their outstanding loans within the June deadline.

“How can a group such as this avail such a large interest waiver?”

Why does Janata want AnonTex to exit?
Janata Bank used to be one of the most reputed state-run banks in Bangladesh, but loan scams centring AnonTex and Crescent Group have turned into a key reason behind the bank’s deteriorating financial health.

Bad loans of the bank stood at Tk 5,818 crore at the end of 2017, which later skyrocketed to Tk 14,386.78 crore at the end of December last year.

After numerous irregularities were found in loans given to AnonTex Group during a central bank probe, the regulator in 2018 had ordered the bank to conduct a functional audit and take legal action against those involved in the scandal.

The state-run lender did not conduct any functional audit regarding the issue nor made any legal move against AnonTex Group in the last four years, Bangladesh Bank sources say.

Janata bank’s existing management is not willing to conduct the functional audit as some of their executives are involved with the irregularities, said several officials of the state-run bank seeking anonymity.

They added that the management now wants to avoid any connection with the scandal by recovering AnonTex loans.

When approached for comments, AnonTex Group Managing Director Md Younus Badal declined to speak on the issue.