Tk73,101cr loan default cases filed in Ctg in a year – 86% tied to S Alam Group alone

Illustration: TBS

Infograph: TBS

Since the government changed on 5 August last year, 46 banks have lodged 1,028 loan default cases with Chattogram's Artha Rin Adalat, involving a staggering Tk73,101 crore – tantamount to more than 9% of the FY2025-26 national budget.

Artha Rin Adalat (Money Loan Court), a specialised judicial body, handles loan defaults and financial disputes between banks and borrowers. These cases were registered between 11 August 2024 and 4 August 2025, court records show.

An analysis of the case documents by The Business Standard reveals that while only 31 of these cases involve S Alam Group and its entities, they account for 86% of the total defaulted loans — Tk63,125.48 crore across three banks: Islami Bank, Janata Bank, and Social Islami Bank.

Islami Bank Bangladesh alone bears the brunt of Tk51,327.34 crore in defaults by the Chattogram-based conglomerate, including Tk42,176.94 crore from its Khatunganj branch.

Islami Bank's new Managing Director, Md Omar Faruk Khan, told TBS, "The matter is under investigation. With the Bangladesh Bank's support, we have formed four audit committees. Once their reports are in, we will know how these irregularities occurred and against whom action should be taken. Already, 8-10 senior officials directly involved have been suspended."

At the bank's Khatunganj branch, loans taken by S Alam Group (Tk42,176.94 crore) represent 57.69% of the branch's total loan portfolio, secured by collateral worth only Tk6,000 crore.

Asked whether proper procedures were followed, Branch Manager Jamal Uddin declined to comment. Instead, he said, "We currently have 26 cases, including those against S Alam, ongoing in the Chattogram Artha Rin Adalat, and we are pursuing all legal avenues to recover the funds."

S Alam Group, along with its affiliated and business entities — including S Alam Vegetable Oil, S Alam Super Edible Oil, S Alam Refined Sugar Industries, S Alam Steels, S Alam Trading Company, S Alam Cold Rolled Steel, as well as Sonali Traders, Delta Oil Refinery, Sadia Traders, Global Trading Corporation, Ozy Travels, Century Food Products, Adil Corporation, Infinia Synthetic Fiber, Genesis Textile Accessories & Apparels, Chemon Ispat, Savola Oil, and Infinity CR Strips — secured these loans from the three banks, court record shows.

Businessmen and legal experts said granting such massive loans to a single group shows how borrowers, closely connected to the previous government, circumvented rules, exposing banks to extreme risk and making it nearly impossible for ordinary businesses to obtain credit.

Former Chittagong Chamber of Commerce and Industry director Mahfuzul Haque Shah told TBS, "They [S Alam Group] exploited power, gained undue advantages, and created unfair competition, harming genuine entrepreneurs. Banks failed in due diligence."

He said some businesses defaulted due to high interest and operational challenges, while others borrowed with no intent to repay. "A key problem is that trading and industrial loans carry the same interest rates, which is inherently unjust. Regulators must act immediately."

Akhtar Kabir Chowdhury, lawyer and civil-society platform Sushashoner Jonno Nagorik (SHUJAN) in Chattogram, said, "Public funds were plundered under government protection. Ordinary borrowers face endless paperwork, while these groups secured thousands of crores with ease."

 Cases flood Ctg Artha Rin Adalat

Until recently, Chattogram had only one Artha Rin Adalat, but two new courts were established on 18 June, with two joint district and sessions judges appointed. Limited hearings began on 1 July, aiming to speed up case disposal and reduce judicial delays.

With around 5,200 cases pending across Chattogram's three Money Loan Courts, backlog has been a major concern.

 Janata Bank also hit by S Alam's massive defaults

Janata Bank holds the second-largest volume of bad loans to the S Alam Group. In 12 cases, defaulted loans at Janata amount to Tk11,435.63 crore, of which Tk11,392.14 crore involves S Alam Group and its entities.

When contacted, Janata Bank Managing Director Md Mojibur Rahman told TBS, "I am not aware of how such large sums were lent to a single group. However, without full details, I cannot make any statement on the matter."

Md Mahiuddin, general secretary of the Chaktai-Khatunganj General Traders' Welfare Association, said, "Chattogram has the most importers, many needing regular loans. Yet small traders face constant harassment, while unscrupulous businessmen easily access thousands of crores, with bank officials complicit, leaving genuine traders deprived."

 S Alam Group's defaults in Social Islami Bank 

Social Islami Bank shows Tk939.67 crore in defaulted loans, including Tk406.03 crore linked to S Alam Brothers Ltd in a single case. 

Apart from the 31 cases filed by Islami Bank, Janata Bank, and Social Islami Bank against S Alam Group, the conglomerate has also defaulted on loans from other banks. 

Largest case by Islami Bank's Khatunganj Branch

The biggest loan default case involves Islami Bank's Khatunganj branch, with a staggering Tk13,317.34 crore at stake. S Alam Group Chairman Saiful Alam and 13 others are named defendants, and the case is currently under trial.

The next four largest default cases also involve S Alam subsidiaries. Notably, S Alam Vegetable Oil alone defaulted on Tk10,280.36 crore from the branch.

Following a court order in a case filed by the Khatunganj branch, authorities seized a four-storey commercial building in Motijheel, Dhaka, along with 5 kathas and 9.90 decimals of land belonging to the S Alam Group.

Assets frozen include shares of SS Power Ltd worth over Tk58 crore, Sonali Cardo Logistic Ltd shares worth Tk117.75 crore, and 31,251.70 decimals of land with factories, equipment, and raw materials in Banshkhali, Chattogram.

Additionally, three Mudaraba Short Notice Deposit accounts of SS Power Ltd at a Gulshan bank branch have been frozen, containing Tk102.39 crore, Tk35.85 crore, and Tk0.778 crore, respectively.

Islami Bank filed another case on 4 July at Chattogram Artha Rin Adalat against Sonali Traders for Tk4,953.58 crore in default from the Khatunganj branch. Further cases target Chemon Ispat (Tk3,616.55 crore) and Infinity CR Strips (Tk2,821.68 crore), both S Alam affiliates.

 What Bangladesh Bank says

Bangladesh Bank spokesperson Arif Hossain Khan told TBS, "Bangladesh Bank has clear policies regarding loan disbursement and recovery. Every scheduled bank approves and disburses loans in line with these policies. Our role is to oversee and ensure their implementation. If any irregularities are found in loan disbursement, we flag the concerned bank.

"Even so, if there are policy violations in loan approval or usage, the responsibility lies with the respective bank. However, we keep such matters under close watch and issue necessary directives as per the law."