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Central Bank Grants Special Concessions to Two Beximco Units
Bangladesh Bank has extended special banking concessions to two loan-defaulting entities under Beximco Group—Shinepukur Ceramics and Beximco LPG. The regulatory relief permits the renewal of a Tk 105 crore working capital credit limit for Shinepukur Ceramics and authorizes Beximco LPG to open letters of credit (LCs). Both waivers will remain effective until December of next year.
The central bank issued two separate circulars in this regard on Monday (October 12).
According to central bank directives, Sonali Bank is authorized to renew the Tk 105 crore working capital limit of Shinepukur Ceramics despite its classified loan status. The restrictive provisions of Section 27KaKa(3) of the Bank Company Act, 1991, will be suspended for the entity through December next year.
The waiver was granted by Bangladesh Bank under powers conferred by Section 121 of the Bank Company Act, citing public interest considerations. Earlier on August 17, the central bank had also permitted Shinepukur Ceramics to open LCs against a 100 percent margin.
Meanwhile, Beximco LPG was granted permission to open LCs against a 100 percent cash margin through National Bank. This concession will similarly remain valid through December of next year.
Two Binding Conditions Imposed
The central bank attached two mandatory conditions to the waivers for both companies:
The concessions must not generate any financial or legal liability for the government.
All revenues generated by both commercial units must be routed into a designated account, from which creditors' dues must be settled on a proportional basis.
Under Section 27KaKa(3) of the Bank Company Act, 1991, loan defaulters are barred from receiving banking facilities. However, in formal consultation with the government, Bangladesh Bank exercised its discretionary authority to exempt these two entities from the statutory restriction.
In addition to the two Beximco enterprises, the central bank has recently extended similar exemptions to several other defaulting business concerns.
https://thedailyexpress.news/news/business/Central-Bank-Grants-Special-Concessions-to-Two-Beximco-Units