BB allows default-linked Abdul Monem Sugar to open 100% margin LCs
The special facility will remain in force until 30 June 2027, despite the company's links to hundreds of crores of defaulted loans.
Highlights:
- BB allows AMSRL to open import LCs with a 100% cash margin until June 2027.
- The company is linked to defaulted loans worth around Tk698 crore.
- Banks extending the facility will not receive any financial support from the govt or the central bank.
Bangladesh Bank has allowed Abdul Monem Sugar Refinery Ltd (AMSRL) to open import letters of credit (LCs) with a 100% cash margin until 30 June 2027, granting the company a special regulatory exemption despite its association with substantial defaulted loans.
The central bank issued a circular today (6 July), signed by Deputy Governor Md Kabir Ahmed, allowing scheduled banks to open import LCs for the refinery without the restrictions stipulated under Section 27A(3) of the Bank Company Act, 1991.
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The circular, issued under Section 121 of the Bank Company Act, said the exemption will remain effective until 30 June 2027.
However, Bangladesh Bank made it clear that neither it nor the government will assume any liability arising from credit facilities provided under the arrangement.
The circular also states that banks extending such facilities will not be eligible to seek any financial assistance or compensation from the government or the central bank in relation to those exposures.
The approval follows a request by Bangladesh Bank to the government seeking permission to allow the refinery to continue opening import LCs with a full cash margin, even though the company is a guarantor for defaulted loans amounting to around Tk455 crore.
According to Bangladesh Bank data as of March 2025, Abdul Monem Ltd had defaulted loans totalling Tk698 crore across 24 banks and non-bank financial institutions, including Agrani Bank, IFIC Bank, United Commercial Bank (UCB) and Dutch-Bangla Bank. Of the total, nearly Tk455 crore is owed to Agrani Bank.
The Abdul Monem Group applied in August last year to restructure its defaulted loans under special terms. It later submitted another application to Bangladesh Bank Governor Mostaqur Rahman on 7 June this year, seeking permission to open import LCs with a 100% cash margin.
