BB to relax lending rules for Tk 1,700cr City Group bailout

Md Mehedi Hasan Md Mehedi Hasan Eight private commercial banks are set to receive regulatory relief to extend Tk 1,700 crore in fresh loans to debt-laden City Group, in a move aimed at keeping its operations running and ensuring supplies of essential commodities ahead of Ramadan.

The banks are City Bank, Mutual Trust Bank, Prime Bank, Dutch-Bangla Bank, Southeast Bank, Trust Bank, NCC Bank and Pubali Bank.

In consultation with the government, the decision in principle was taken at a meeting between the eight banks and Bangladesh Bank Governor Mostaqur Rahman at the central bank’s headquarters yesterday, according to meeting sources.

At the lenders’ request, Bangladesh Bank plans to exempt them from Section 27(Ka Ka) of the Bank Company Act, 1991, which restricts lending to loan defaulters. The central bank intends to use its authority under Section 121 to grant the exemption.