Feroz's polls bid uncertain

Participation of ruling Awami League Chief Whip ASM Feroz in the upcoming national election hangs in the balance following a High Court order that halted the ninth rescheduling of his loans from Sonali Bank.

The HC yesterday stayed the Bangladesh Bank and Sonali Bank's decisions to allow M/S Patuakhali Jute Mills, owned by Patuakhali-2 lawmaker Feroz, to reschedule its loans of Tk 26.80 crore.

The HC bench of Justice Sheikh Hassan Arif and Justice Razik-Al Jalil passed the order following a writ petition filed recently by Patuakhali AL President Ziaul Haque, challenging the legality of the decisions.

Talking to The Daily Star, the petitioner's counsel Mainul Islam said Feroz is a loan defaulter and is now disqualified from contesting the upcoming parliamentary polls following the court order.

As per the Representation of People's Order, a loan defaulter is disqualified from contesting the election, he pointed out.

The counsel, however, said Feroz would be able to contest the election if the Supreme Court stays the HC order.  

Mainul pointed out that bank loans of a company cannot be rescheduled more than thrice, according to the BB circular issued in 2012.

But Sonali Bank rescheduled Feroz's loans for the ninth time on August 19 this year, which, according to the lawyer, is a violation of the banking rules.

And the BB approved the state-run bank's decision on September 20 this year, Mainul added.

Yesterday, the HC also issued a rule, asking the Sonali Bank and the BB authorities concerned to explain why their failure to discharge their duties in accordance with the law over rescheduling of the bank loans should not be declared illegal.

The jute mill was set up in 1985 with loans from Bangladesh Shilpa Bank (BSP).

Sonali first provided credit facility to Feroz's firm in 1989 with an initial amount of Tk 1.20 crore. The lender later increased the credit support significantly without verifying its repayment and business capacity.  

Sonali rescheduled the firm's loans for the first time in 1998.

In November 2013, the state-run lender rescheduled the loans for the eighth time and also waived interest amounting to Tk 13 crore.

Following the waiver, the company's total loan stood at Tk 20.40 crore. Sonali asked it to repay the amount within the next two years.       

The rescheduling of the loans enabled Feroz to take part in the 10th parliamentary polls in 2014 but he later became a defaulter again for non-payment of loans in due time.

Talking to this newspaper, a BB official said that in recent times, the central bank on many occasions rescheduled the non-performing loans (NPLs) of some wilful defaulters going against its own circular.

This is very harmful when it comes to implementation of the banking rules, mentioned the official seeking anonymity.

Some well-known defaulters abused the facility and took fresh loans from other lenders by providing them with clearance reports from the BB's credit information bureau, the official mentioned.

In many cases, both fresh and past loans became defaulted and consequently pushed up the volume of NPLs in the banking sector.  

Feroz also took the same rescheduling facility, which left an adverse impact on the banking sector, the banker pointed out.

The BB should strictly follow its circular for the sake of restoring corporate governance in the banking sector, added the official.