Bangladesh Bank has relaxed restrictions on fresh banking facilities for two loan-defaulting companies of Beximco Group, allowing them to maintain business operations despite their default status.

Under separate circular letters issued on Monday, the central bank exempted Beximco LPG Unit-1 from restrictions on opening letters of credit (LCs) and receiving working capital facilities from National Bank, while Shinepukur Ceramics received an exemption for renewing its existing working capital limit with Sonali Bank.

The exemption for Beximco LPG Unit-1 will remain effective until December 31, 2027, according to the central bank's circular.

The company will be allowed to open LCs against 100 per cent margin and obtain working capital facilities, despite restrictions under Section 27KaKa(3) of the Bank Company Act, 1991, which generally bars banks from extending credit facilities to loan defaulters.

Shinepukur Ceramics, a defaulting borrower of state-owned Sonali Bank, has been allowed to renew its existing 105 crore taka working capital limit under the exemption.

Bangladesh Bank said the concession for Shinepukur Ceramics was granted in the interest of the state.

Both companies must comply with conditions attached to the exemptions. 

Beximco LPG Unit-1 must deposit all its income into a designated bank account, from which the National Bank's outstanding dues will be repaid proportionately.

The circulars also make clear that the new facilities will not create any liability for the government or Bangladesh Bank, and National Bank will not be entitled to seek financial assistance from either for extending the facilities.

The central bank communicated the decisions to managing directors and chief executive officers of all scheduled banks.