Rupali wants govt to issue bonds against stuck-up SoE loans

The largely state-owned Rupali Bank Ltd, in a bid to reviving its financial health, has requested the ministry of finance to issue interest- bearing bonds against the money the state-owned enterprises (SoEs) and other government organizations owes to it.

The ministry is yet to make a decision to this effect, finance ministry sources said.
The major part of the Rupali Bank's classified loan, amounting to Tk. 16.30 billion, as of June 30 last belongs to the public sector entities. Of the classified loans, Tk. 4.97 billion is the principal amount and the rest is accumulated interest.
Finance ministry sources said the problems, including overdue SOEs' loans, capital shortfall and manpower shortage, facing the Rupali Bank need to be solved under a package programme.
However, the finance ministry boss is taking time to give a decision on the Bank, a high official of the MoF, preferring anonymity, said.
According to the data, the now-closed Adamjee Jute Mills owes the largest amount of overdue loan, Tk. 7.58 billion, to the Rupali Bank, followed by the Bangladesh Textile Mills Corporation, Tk 1.54 billion, the Bangladesh Agriculture Development Corporation, Tk 1.23 billion, the People's Jute Mills, Tk 1.08 billion, the Bangladesh Jute Mills Corporation, Tk 930 million, the Food Ministry, Tk 484 million, the Crescent Jute Mills, Tk 376 million, the Karim Jute Mills, Tk 312 million, and the Sylhet Pulp and Paper Mills Tk 152 million.
Besides, the Khulna textile Mills owes to the Bank Tk 95.6 million, the Khulna Newsprint Mill Tk 77 million, Bangladesh Aroma Tea Ltd Tk 44.4 million, Bharat Tea Estate Tk 39 million and the National News Publication Tk. 72 million.
Rupali Bank sources said they had to give loans to the SOEs at the insistence of the MoF since the government owns 94 per cent of the Bank's shares.
The MoF at a recent meeting asked the Rupali Bank to submit its total outstanding loans with the SOEs.
"It is the finance minister who would take the final decision on the fate of the Rupali
Bank. But he remains unresponsive until now," a frustrated official in the MoF told the FE.
Issues like appointing the Chief Executive Officer, increasing its paid -up capital by issuing right shares or by other means, issuing bonds against the SOE loans and recruiting adequate manpower, are some of the issues that need to be solved urgently, officials said.