TROUBLED four state-owned banks have initiated moves to take over around Tk 5,232 crore in loans of 17 subsidiaries of Navana Group from 51 banks and non-bank financial institutions as the group is struggling to repay debts. The initiatives of the banks, which are suffering from high non-performing loans, came following the instruction of the Finance Ministry. The SoBs which are going to take over Navana loans are Sonali, Rupali, Agrani and Janata. The entities which issued a credit to Navana Group include 32 banks and 19 NBFIs. Finance Minister AHM Mustafa Kamal has already held a meeting with top executives of the four state-owned banks in this regard.
Besides, the central bank is going to hold a meeting on March 24 this year with the banks which have financed Navana Group so far. In the takeover process, Agrani Bank has been working as the lead bank and overseeing the entire process. Navana submitted the loan takeover proposal to the Finance Ministry in 2018. Navana would cost cut its businesses and would float its shares in an IPO. Although the government has initiated a proposal to provide Navana Group a bailout with the state-owned banks’ fund, the SoBs themselves are struggling with a huge amount of defaulted loans. Disbursement of such a huge amount of loans would also be a violation of the single borrower exposure limit as specified by the central bank in line with the Bank Companies Act, 2013. While the banks have been suffering most from non-performing loans, corruption, scams, misappropriation and government borrowing, we doubt the takeover of Navana Group would further destabilize the banking sector.
The government is ethically and legally bound for protecting small investors and depositors of the banks. We urge the Finance Ministry to revive the banking sector and the economy as well.
