Prime Bank MD asked to explain Tk50cr interest waiver to Ctg businessman

A Chattogram court has summoned the managing director (MD) of Prime Bank to explain waiver of around Tk50 crore interest for a loan to local businessman Abul Bashar.

Chattogram Money Loan Court Judge Mujahidur Rahman passed the order on Sunday, said Rezaul Karim, assistant bench of the court.

According to court records, Abul Bashar, proprietor of Jalal and Sons, obtained a Tk58 crore loan from the Khatunganj branch of the bank in 2014 to import commodities such as wheat and sugar.

In March 2016, the bank filed a lawsuit as Bashar failed to repay the loan within the stipulated timeframe. At that juncture, the outstanding loan amount along with accrued interests totaled Tk73.68 crore.

In Sunday's order, the court said that despite the initial terms stipulating a 16% interest rate, the bank opted for a solenama, allowing Bashar to repay only the principal amount of Tk58 crore. 

Describing Abul Bashar as a "willful defaulter" as he did not repay the loan despite such privileges, the court raised concerns about the fairness of completely waiving the accrued interests.

Therefore, the court asked the MD of the bank to submit an explanation by 18 March, regarding the validation of interest waiver.

Besides, the court has directed the executive director of Bangladesh Bank's Chattogram office to conduct an investigation, along with two joint directors, to ascertain whether there has been any violation of the central bank's circular on interest waivers and submit a comprehensive report.

The repayment was structured over 19 six-monthly installments, spanning from 2024 to 2033, with an exclusion of Tk49.15 crore in interest.

Abul Bashar, owner of Jalal and Sons, could not be reached as his mobile phone remained unresponsive despite repeated attempts. 

Responding to queries, Hassan O Rashid, MD of Prime Bank, declined to comment on the matter citing its sub-judice status.

He said "The bank did not violate any guidelines of the Bangladesh Bank. We will respond to the queries in the court."

Bashar also has an outstanding debt of Tk136 crore owed to the National Bank's Khatunganj branch, according to court sources.  The bank filed a separate lawsuit against him in the money loan court, citing non-repayment despite a decade passing. 

The businessman took the loan in 2005 in the name of Messer's Ahad Trading and Jalal & Sons. In 2015, the bank filed a case against both business entities.