The Bangladesh Bank on Monday restricted S Alam Group-controlled six banks from issuing new loans to safeguard depositors鈥� money.
In this connection, the central bank issued separate notices to the banks 鈥� Islami Bank Bangladesh, Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank and Bangladesh Commerce Bank.
According to the notices, these banks are now limited to issuing a maximum of Tk聽5 crore in loans to specific sectors, including agriculture, working capital, CMSMEs, loans under stimulus packages, SODs against FDRs within the same bank, and loans backed by 100 per cent cash margins.
They are not allowed to issue loans in any other sectors.
Any loan exceeding Tk 5 crore in these categories will require prior approval from the Bangladesh Bank.
The central bank also instructed that no existing loans could be renewed or extended unless overdue or excess amounts are repaid in cash.
聽Additionally, the banks are barred from acquiring loans from other banks or financial institutions.
The Bangladesh Bank further instructed these banks to submit monthly reports on loan recovery from their top 20 borrowers.
Officials from the Bangladesh Bank said that these banks were in a very poor shape and were surviving largely through the central bank鈥檚 bailouts.
S Alam Group, under the leadership of chairman Saiful Alam Masud, allegedly took about Tk聽2 lakh crore from the banking sector, including these banks, anonymously.
Masud, leveraging his close ties with deposed prime minister Sheikh Hasina, allegedly had taken control of seven banks since 2017.
Even after Hasina鈥檚 resignation on August 5 amid a student uprising, the Group and its associates reportedly attempted to withdraw an additional Tk聽1,000 crore from these banks, prompting the central bank to impose loan disbursement restrictions.
