New Bangladesh Bank governor had Tk 89cr loans rescheduled before appointment

Private lender Mutual Trust Bank rescheduled Tk 89 crore in stressed loans for Hera Sweaters Ltd, a garment exporter owned by Md Mostaqur Rahman, months before he was appointed governor of Bangladesh Bank (BB) on Wednesday.

The bank approved the garment manufacturer a 10-year repayment facility with a two-year grace period in December last year under the central bank’s special loan rescheduling policy, a senior Mutual Trust Bank official said on condition of anonymity.

The facility was meant for firms hit by factors beyond their control, including political unrest, currency volatility and an economic slowdown.

Documents seen by The Daily Star show Hera Sweaters had sought a 15-year rescheduling facility with a two-year grace period and a lower interest rate. The bank eventually approved a shorter tenure.

In January last year, the central bank formed a five-member committee led by the executive director of the Department of Offsite Supervision to support the restructuring or rescheduling of corporate borrowers that had fallen into default for reasons beyond their control.

On September 16, the Bangladesh Bank issued a unified special rescheduling policy aimed at sustaining economic growth and assisting such borrowers.

About 300 companies, including several large defaulting conglomerates, applied for rescheduling or restructuring facilities worth roughly Tk 2 lakh crore in the first nine months of last year.

Rahman, managing director and chief executive of Hera Sweaters, was a member of the BNP’s election steering committee during the 13th national election earlier this month.

He succeeds Ahsan H Mansur, who took office in August 2024 after the Awami League-led government fell after a mass uprising.

At least three managing directors of commercial banks, speaking anonymously, questioned the appointment.

Their bottom line of the argument was: how can a person who has rescheduled loans for his own company under special terms work in the interest of the country’s banking sector? This is a major conflict of interest.

One of them said that, for the first time in the country’s history, a businessperson has been appointed as governor. This could create conflicts of interest in policy formulation, although it is too early to make a definitive assessment.

The Daily Star tried to reach Md Mostaqur Rahman by phone and WhatsApp messages for comment. He did not respond.