Janata Bank Faces 61% Loan Defaults Mainly from Beximco and S Alam

In May 2023, the government committed to appointing independent directors to state-owned banks, aiming for at least one-third representation on their boards to enhance governance and secure $500 million from the World Bank.

Thirteen business groups in Bangladesh defaulted on Tk 60,040 crore in loans from four state-owned banks: Sonali, Janata, Agrani, and Rupali. These loans violated single-borrower limits and contributed to Tk 116,537 crore in defaults as of September 2023.

As of September 2024, Beximco and S Alam Group top the defaulter list with defaulted loans of Tk23,120 crore and Tk11,734 crore, respectively. Together, they account for over 12% of the total defaulted loans, amounting to Tk2.84 lakh crore.

The interest rate gap between deposits and loans in Bangladesh has remained above 5% for 10 consecutive months, with the spread reaching 5.85% in November 2024, up from 2.93% in June 2023. While lending rates have sharply increased, deposit rates have not kept up, leaving depositors with returns lower than inflation (11.38% in November 2024).

TRANSFORM, an impact accelerator led by Unilever, the UK Government, and EY, announced grants of up to BDT 10 million each for two Bangladeshi SMEs focused on climate resilience.

A proposed hike in gas prices by Petrobangla has sparked major concerns among industrialists in Bangladesh, fearing economic harm. Industrial leaders argue that the increase, if approved, could lead to factory closures, job losses, and reduced industrial output, harming economic growth and potentially causing social unrest.