BB asks state banks to rope in more private lenders
With Bashundhara Group seeking to borrow from state banks to establish a gold refining plant at Tk 5,790 crore, Bangladesh Bank yesterday asked five public sector banks to include more private lenders in the syndicated finance scheme to mitigate credit risks.
The industrial behemoth sought Tk 4,300 crore as a syndicated loan from six lenders led by Agrani bank. Bashundhara was supposed to arrange the rest of the fund, said a top official of the state lender.
However, it has become difficult for the state banks to contribute their portion as the amount exceeds the single borrower exposure limit.
A single borrower exposure limit is a threshold calculated against the capital of a bank, which stipulates the ratio of money a bank can lend to a borrower.
At a meeting with the managing directors of five state banks yesterday, the BB asked Sonali, Janata, Agrani, Rupali, and Bangladesh Development Bank Ltd (BDBL) to follow the single borrower exposure limit while giving out funds to Bashundhara.
As per the single borrower exposure limit, BDBL is allowed to give out a maximum of 15 per cent of its capital to an individual or company as loans while the rest four banks can disburse 10 per cent of their capital.
The BB came up with the decisions at a meeting chaired by BB Governor Fazle Kabir at the BB headquarters. Financial Institutions Division Secretary Sheikh Mohammad Salim Ullah was present at the meeting.
A BB official said that the state-banks' credit risk would be diversified if more private lenders are included in the financing programme.
In its loan application, Bashundhara said it would contribute Tk 1,490 crore from its own coffer out of Tk 5,790 crore to set up the plant, a high official of Agrani Bank said.
As per the previous agreement, the debt-equity ratio stood at 30 per cent. Yesterday, the BB said the conglomerate has to contribute 40 per cent of the fund.
The company planned to manage the rest of the funds through a syndicated loan led by Agrani Bank.
Of the amount, Agrani Bank was scheduled to disburse Tk 950 crore, Sonali and Janata Tk 1,000 crore each, Rupali Tk 500 crore, EXIM Bank Tk 600 crore, and BDBL Tk 250.
The figures will change following the central bank's latest directive, the BB official said.
The repayment tenure of the loan is seven years, including a grace period of two years. The interest rate of the loan would be 9 per cent.
The central bank also asked banks to submit a new proposal, the managing director of a state bank said.
"If the banks finance the company, their single borrower exposure limits will go above the ceiling," said Md Serajul Islam, a spokesperson of the BB.
"So, the central bank is looking into it."
Gazi Billal Hossain, a top official of Bashundhara Group, declined to comment.
Bashundhara wants to set up the plant in Bhatara in the capital. It will have a capacity of producing 200 kilogrammes gold bars and 150 kg gold jewellery every day.
In July, the central bank allowed the import of unrefined and partially refined gold revising a gold policy framed in 2018.
The commerce ministry issued a standard operating procedure for the establishment and running of gold refineries.
Interested companies will need a minimum capital of Tk 1,000 crore and own 20 bighas of an unbroken stretch of land to run the operations.
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