As 33 Large Borrowers Owe Tk56,131 Crore
B Mirror Report: State-owned Janata Bank is grappling with mounting financial stress as its exposure to a small group of high-risk borrowers intensifies. The documents available to the reporter reveal that defaulted loans from just 33 major clients now total Tk56,131 crore.
These borrowers, each receiving loans exceeding 10% of the bank’s regulatory capital, are classified as “large borrowers.” Alarmingly, 27 clients obtained loans surpassing the 25% single-borrower limit set by Bangladesh Bank, often through special approvals.
Janata Bank Managing Director Md Mazibur Rahman said the bank is pursuing two primary recovery strategies: auctioning and restructuring non-performing loans (NPLs) and bringing operational businesses back into compliance under policy guidelines. Recoveries from NPLs have already doubled compared with last year, he noted, adding that legal actions are underway against major defaulters.
Bankers and analysts cite political influence, weak regulatory oversight, and opaque lending practices as key factors behind the excessive borrowing by large clients. Bangladesh Bank’s easing of supervision has also contributed to the surge in concentrated lending.
Janata Bank, formed in 1972 through a merger of United Bank Limited and Union Bank, was once relatively strong among state-owned banks. Today, it is the worst hit by NPLs among its peers.
As of September 2025, 70% of Janata Bank’s total loans were non-performing, compared with 51% at Rupali Bank, 40% at Agrani Bank, and 20% at Sonali Bank.
Financial losses are mounting, with a Tk3,071 crore loss in 2024. Rupali and Sonali Banks remained profitable in contrast.
By June 2025, NPLs had soared to Tk72,107 crore, nearly 71% of the total loan portfolio. Capital erosion has been severe, with deficits rising from Tk9,262 crore in December 2022 to Tk65,093 crore by June 2025.
Janata Bank’s top 11 defaulters alone owe Tk42,820 crore, including major names such as Beximco Group (Tk23,000 crore) and S Alam Group (Tk9,400 crore).
The bank also faces loan concentration issues, with 77% of total loans (Tk76,840 crore) concentrated in just five branches, and nearly 39% at the Local Office branch alone, despite a nationwide network of 929 branches.
Former managing director Md Abdul Jabbar emphasized that legal measures, collateral sales, and targeted support for operational businesses are crucial for recovering these loans and stabilizing the bank.
Experts warn that political interference and deliberate targeting of specific branches exacerbate the risk, creating opportunities for misappropriation and embezzlement.
Janata Bank’s challenges underscore a broader concern over state-owned banks’ governance, risk management, and compliance with large-borrower limits, highlighting the urgent need for corrective measures to safeguard financial stability.
