Bangladesh Central Bank Grants Limited Import Facility to S Alam Group Power Firm
DHAKA, Aug. 18 —
Under the special arrangement, SS Power-1 will be permitted to open LCs solely for raw-material imports by depositing 100% cash margin through state-owned Rupali Bank, according to a Bangladesh Bank directive issued on Sunday.
The exemption will remain in effect until Dec. 31, 2027, the directive said.
Bangladesh Bank said provisions under Section 27(Kha)(3) of the Bank Company Act would not apply to SS Power-1 during the specified period, allowing the company to maintain limited import operations despite the restrictions normally imposed on companies belonging to a loan-defaulting business group.
The central bank stressed, however, that the arrangement does not amount to a government guarantee or financial backing.
Any loan or financing extended under the special facility will remain the responsibility of the lending bank or financial institution, the directive said. Neither the government nor Bangladesh Bank will assume liability for such financing, and lenders will not be entitled to seek financial assistance or reimbursement from either authority in the future.
Power plant currently shut
A Bangladesh Bank official said SS Power-1’s power plant is currently not operating and that the decision to provide the facility was taken in consideration of the country’s current electricity-supply situation.
The official said the central bank issued the directive after receiving approval from the Ministry of Finance.
The facility is narrowly defined. SS Power-1 will not automatically gain access to general loans or other forms of bank financing. Its permission is limited to opening LCs for raw materials, with the full value of each LC secured by cash margin.
The arrangement is intended to facilitate the import of materials needed for the plant’s operations while limiting the financial exposure of banks and the government.
S Alam Group under scrutiny
The decision comes as the S Alam Group, one of Bangladesh’s largest business conglomerates, remains under scrutiny over its role in the country’s banking sector.
A report by the Bangladesh Financial Intelligence Unit (BFIU) has raised allegations concerning the group’s acquisition of control over several banks and a financial institution during the previous government and the subsequent flow of large volumes of lending to businesses associated with the group.
The group has also faced allegations involving the misappropriation and transfer of large sums of money abroad. Such allegations remain subject to investigation and legal proceedings, and claims should be distinguished from findings established by a final court judgment.
The group’s activities in the banking sector have become a major focus of regulatory and political debate as Bangladesh works to address a rise in non-performing loans and concerns over corporate governance and related-party lending.
Similar facilities granted previously
SS Power-1 is not the first company to receive a special import-related exemption despite restrictions associated with a defaulting business group.
Similar facilities have previously been extended to Shinepukur Ceramics Ltd, a company of the Beximco Group, and Abdul Monem Sugar Refinery, part of the Abdul Monem Group.
The decisions reflect a broader policy challenge facing Bangladesh’s regulators: how to enforce lending discipline against defaulting business groups while preventing essential industrial and power-sector operations from being disrupted.
In the case of SS Power-1, the central bank has attempted to strike that balance by restricting the exemption to raw-material imports and requiring full cash backing for the LCs.
The decision therefore does not constitute a conventional bailout or fresh credit line for the company. Instead, it provides a tightly controlled mechanism through which the power producer can import essential raw materials while leaving the financial risk with the participating bank.
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