Due to their status as prominent defaulters, Beximco and S Alam Group, which have been granted special treatment by the Awami League government, are currently the subject of intense debate and criticism. At least a dozen lenders have had crises as a result of these two groupings, posing a serious threat to the stability of the banking industry.

With Tk 23,120 crore in defaulted loans as of September of last year, Beximco stood at the top of the list of the top 10 defaulters created by Bangladesh Bank. Conversely, the S Alam Group has Tk 11,734 crore in delinquent debts.

Bangladesh Bank says that the top 10 defaulters have a total of Tk 51,856 crore in delinquent loans. The aggregate amount of delinquent loans from Beximco and S Alam is Tk 34,854 crore, or more than 12% of all defaults in the financial services sector.

These two groups are financed by at least 20 banks. According to bankers, it is not possible to get in touch with S Alam Chairman Saiful Alam Masud and Beximco Vice Chairman Salman F. Rahman because they are both currently incarcerated.

Banking sector stakeholders say that in fact, the total debt of Beximco and S Alam is around Tk 250,000 crore, which is 15.17 percent of the total debt of the banking sector. A stress test at the end of December 2023 showed that if the top three borrowers default, there will be a serious negative impact on the stability of the banking sector, which will also increase defaulted loans.

The report mentioned that Beximco has taken loans worth Tk 50,000 crore from a total of 16 banks and seven non-bank financial institutions, out of which Tk 23,120 crore has defaulted with eight banks.

Janata and Sonali Bank have suffered the most losses due to Beximco’s default. On the other hand, S Alam’s defaulted loans amount to Tk 11,734 crore and their total debt amount is Tk 1,90,000 crore.

On the other hand, S Alam has fraudulently taken loans from four banks under his control and laundered Tk 93,364 crore. From this information, it is known that it is necessary to take action against these operations through investigations by Bangladesh Bank and the Anti-Corruption Commission (ACC).

A director of the new board of directors of Islami Bank said that Saiful Alam’s loan amount is at least Tk 1 lakh crore. Although he promised to repay Tk 10 thousand crore, he is not available now.

Sonali Bank Chairman Md. Muslim Chowdhury mentioned that among the state-owned banks, they are in a relatively good position in defaulted loans, but after August 5, Beximco defaulted due to non-payment of loans.

Former World Bank Chief Economist Dr. Zahid Hossain said that large groups have legally taken out loans from banks, but their assets are very small. The government should take initiatives to bring back their assets abroad.

Transparency International Bangladesh Executive Director Dr. Iftekharuzzaman said that the lack of accountability of the government has created opportunities for such corruption and those involved need to be prosecuted.