The Ministry of Industries has proposed a waiver of loan interest for state-owned sugar mills, advocating the issuance of bonds for principal repayment to alleviate the substantial loan burden plaguing these industries. In a letter dated 5 December, the ministry appealed to the Finance Division secretary to accord special considerations to the 15 mills operating under the Bangladesh Sugar and Food Industries Corporation (BSFIC), reported TBSNews.
Officials from the ministry have clarified that the primary objective of this initiative is to provide support to mills that have endured prolonged losses due to irregularities, mismanagement, and the absence of contemporary business strategies and essential raw materials. The aim is to facilitate the recovery of these industries.
However, critics argue that sustaining such financially distressed firms and affording them special privileges contributes to state waste.
As per media report, BSFIC has extended loans amounting to Tk9,291 crore to the sugar mills through five state-owned banks, including Sonali, Janata, Agrani, and Rupali. One-third of this sum represents the principal debt, while the remaining portion constitutes long-term accumulated interest. Essentially, the Ministry of Industries is seeking an interest waiver surpassing Tk6,000 crore for the mills.
Most of the loans were initially acquired to support farmers, particularly those engaged in sugarcane cultivation. Despite farmers repaying the funds through sugarcane cultivation, neither the mills nor the BSFIC have returned the money to the banks.
A source from the Financial Institutions Division, opting for anonymity, stated, “The industries ministry has penned the letter following deliberations. However, due to the magnitude of the decision, a resolution is not imminent at this juncture. A decision on this matter will be deferred until the formation of the new government after the upcoming general elections.”
