Islami Bank in Bangladesh has approved a Tk 700 crore loan to AnonTex Group, despite the group being one of the five large borrowers of Janata Bank that has struggled with repayment for over 13 years. This decision follows a significant favor granted to AnonTex by Janata Bank in the form of a Tk 3,359.19 crore interest waiver, provided that the principal amount is repaid by June 15 of the current year. At the end of 2022, AnonTex’s liabilities to Janata Bank exceeded Tk 7,726 crore, far surpassing the bank’s single-borrower exposure limit. AnonTex, an export-oriented garment manufacturer with a substantial turnover and prominent clients, failed to repay this sum.
Notably, the Bank Company (Amendment) Act 2023 prohibits entities from obtaining fresh credit if they have defaulted on their loans elsewhere. Despite these concerns and its own liquidity issues, Islami Bank proceeded to approve the loan, citing the eligibility of the company. The disbursement process has already begun, raising questions about lending discipline at Islami Bank and corporate governance. The bank had been facing a liquidity crisis, leading to a substantial fine imposed by the Bangladesh Bank, as well as its reliance on liquidity support from the central bank.