Bangladesh News

While the government’s anti-corruption drive continues, the state-owned Sonali Bank has waived Tk 129 crore interest on loans taken by one of the top loan defaulters, Mohammad Ali, also a business leader.

The Board of Directors of Sonali Bank at a meeting with its Chairman and Cabinet Secretary Ali Imam Majumder in the chair approved a proposal in this regard on April 17.

Mohammad Ali, vice president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), has Tk 165 crore outstanding loans with Sonali Bank. The loans were taken against Dhaka Vegetable Oil Industries Ltd, of which Mohammad Ali is chairman and managing director.

The interest was waived on condition that the borrower would pay back principal amount and other charges on the loans by this month, the amount being Tk 35.66 crore, sources said.

The Sonali Bank board took the decision subject to approval of Bangladesh Bank (BB). But BB sources said approval of the central bank is not needed.

The business leader took the loans in a fraudulent process. And the bank has been treating those as bad loans since 1995, they added.

“The loans were taken showing edible oil stock at Dhaka Vegetable Oil Industries plant but Sonali Bank officials later found that the containers were full of water instead of oil,” said a high official of the bank.

At least a dozen officials of the bank, including a general manager, lost their jobs for involvement in the process of granting the loans, he mentioned.

The bank had also filed a criminal case against Mohamamd Ali for fraudulence. He filed a writ petition with the High Court challenging the case but lost it.

A case for recovery of the loans is now under trial at the Money Loan Court, the official said.

Most officials of Sonali Bank are dissatisfied with the board decision waiving such a huge amount of interest due from a top loan defaulter, he said seeking anonymity.

“He took Tk 56 crore loans from Sonali Bank against Deshma Shoe Indutries, which is also defaulted,” said an official of the bank.

Banking sources said Mohammad Ali has defaulted loans also with other banks.

The FBCCI vice president has defaulted loans of Tk 52 crore with Oriental Bank and Tk 33 crore with the IFIC bank.

He has also applied to these banks for waiving of interest on the loans on condition that he would repay the principal amounts at a time.

“He will have to pay about Tk 100 crore if he wants to get the interest-free facilities,” a banking source noted.

Mohammad Ali did not respond to repeated demands by the banks in the last few years to repay the loans.

The managing director of Sonali Bank was not available for his comment.