State-owned banks strive to recover defaulted loans: Janata Bank seeks to reclaim Tk 1,260 crore from AnonTex

Janata Bank to Auction AnonTex Group's Assets to Recover Tk 1,260 Crore in Defaulted Loans  

Janata Bank has announced plans to auction the mortgaged assets of Simran Composite Ltd, a subsidiary of apparel-maker AnonTex Group, in a bid to recover Tk 1,260 crore in defaulted loans. AnonTex, a frequent name on Bangladesh's top defaulters list, is facing its first asset auction by a commercial lender.  

The state-run bank's Janata Bhaban corporate branch has scheduled the auction for December 29 under the Money Loans Court Act. According to the auction notice, AnonTex properties in Gazipur and Ashulia are mortgaged with Janata Bank.  

Janata Bank, which holds the highest amount of defaulted loans in the banking sector, reported bad loans totalling Tk 60,489 crore as of September this year. These non-performing loans represent 61 percent of the bank's total disbursed loans and 21.22 percent of the sector’s total non-performing loans of Tk 284,977 crore.  

Large borrowers are responsible for a significant portion of these bad loans. Among them, Beximco Group owes Tk 19,507 crore, S Alam Group Tk 10,500 crore, and AnonTex Group Tk 7,708 crore.  

A senior Janata Bank official, speaking anonymously, confirmed that the lender's management and board are focusing on recovering defaulted loans from large borrowers as the bank grapples with its high level of bad loans. The decision to auction mortgaged properties is part of these efforts.  

In a similar move last month, Janata Bank announced an auction to recover Tk 1,850 crore in defaulted loans from Global Trading Corporation Ltd, a concern of S Alam Group.  

Attempts to reach Md Mazibur Rahman, managing director of Janata Bank, and Md Younus Badal, managing director of AnonTex Group, for comments were unsuccessful.  

Between 2010 and 2015, Janata Bank disbursed Tk 3,528 crore in loans to 22 AnonTex Group companies. By December 2022, the total outstanding amount, including interest, reached Tk 6,528 crore, exceeding 25 percent of the bank’s capital base and violating the single borrower exposure limit set by the Bank Company Act. The debt has since risen to Tk 7,708 crore.  

In 2018, a central bank investigation revealed irregularities in loan approvals, prompting the banking regulator to order Janata Bank to conduct a functional audit and pursue legal action. However, no legal action has been taken to date.  

In March 2023, the Janata Bank board approved waiving Tk 3,359 crore in interest owed by AnonTex, provided the company made a one-time loan repayment. The bank also planned to recover Tk 4,960 crore of the principal loan by selling AnonTex's mortgaged assets in Ashulia and Tongi.  

However, in April, the central bank ordered Janata Bank to revoke the interest waiver after an audit uncovered forgeries and scams related to the loans.