Bangladesh Bank Approves LC Opening for S Alam-Owned SS Power Through Rupali Bank

Dhaka, August 16, 2026 — Bangladesh Bank has approved the opening of Letters of Credit (LCs) for SS Power One Limited — of which the majority share is owned by S Alam Group — through Rupali Bank with a 100 percent cash margin until December 31, 2027. The central bank published a gazette notification on August 16, allowing the Banshkhali coal-fired power plant company to import coal despite its owner being classified as a loan defaulter.

📜 The Gazette Notification

A senior Bangladesh Bank official told The Business Standard that the central bank had sent a proposal to the finance ministry seeking approval to allow the LCs to be opened. Following the ministry's approval, Bangladesh Bank issued the gazette notification. Key conditions of the approval:

• 💰 100% cash margin — required for all LCs opened by SS Power
• 📅 Valid until December 31, 2027 — time-limited exemption
• 📦 LC purpose — importing coal for power generation
• 🚧 BB bears no liability — central bank will not bear any liability arising from the exemption
• 🚧 No financial assistance — company not eligible to seek BB financial support

🏭 SS Power Ownership Structure

SS Power operates the Banshkhali coal-fired power plant in Chattogram. The ownership structure is:

• 🏭 S Alam Group — 70% ownership (majority shareholder)
• 🇨🇳 Chinese company — 30% ownership

S Alam Group is one of Bangladesh's largest conglomerates — with interests spanning steel, power, cement, and consumer goods. The group has faced significant financial difficulties in 2025-2026, including the closure of 11 factories and substantial banking sector exposure.

🚧 The Defaulter Exception

The BB approval is notable because SS Power's owner — S Alam Group — is currently classified as a loan defaulter. The BB official explained:

“SS Power itself is not a loan defaulter. However, its owner is now classified as a defaulter, which has resulted in the group being treated as a defaulter as well.”

Under normal circumstances, companies owned by defaulting groups would be barred from opening LCs. The exception was granted because:

• ⚡ Power generation — SS Power is a power-generation company critical for electricity supply
• 🚧 Uninterrupted power supply — finance ministry and BB prioritised ensuring continuous power generation
• 📜 Gazette notification — formal legal mechanism for the exemption
• 💰 100% cash margin — protects BB and banking sector from additional risk

📊 Why This Decision Matters

The BB's decision to allow LC opening for a defaulter-owned company is significant for several reasons:

• ⚡ Energy security — Banshkhali power plant is critical for national power supply
• 🚧 Precedent setting — establishes framework for handling defaulter-owned strategic assets
• 💰 100% cash margin — ensures no additional banking sector exposure
• 📜 Transparency — gazette notification makes the exemption public and formal
• 🤝 Finance ministry involvement — decision taken at highest government level

🏭 S Alam Group Context

S Alam Group has been at the centre of Bangladesh's banking sector challenges. The group has been reported to have:

• 🏭 11 factory closures — due to banking restrictions and raw material crisis
• 💰 Significant banking exposure — across multiple banks
• 🚧 Loan defaulter status — classified as defaulter by banking sector
• 📜 LC restrictions — previously unable to open LCs due to defaulter status
• 🏢 Government engagement — sought BB support for restructuring

The SS Power exemption represents a targeted approach — allowing a specific strategic asset (power plant) to continue operating while maintaining restrictions on the broader S Alam Group.

🌐 Strategic Context: Energy Security and Banking Sector Reform

The BB's decision reflects the tension between two competing government priorities:

• ⚡ Energy security — Bangladesh cannot afford power plant shutdowns amid ongoing energy crisis
• 🏛️ Banking sector reform — government committed to strict enforcement against defaulters

By requiring a 100% cash margin and disclaiming BB liability, the central bank has created a framework that allows strategic assets to continue operating without extending additional credit risk to the banking system. The time-limited nature of the exemption (until December 31, 2027) ensures it is not a permanent escape from defaulter consequences.

For Bangladesh's broader economy, the decision underscores the interconnectedness of energy security and financial sector stability — and the difficult trade-offs that policymakers must navigate when strategic assets are owned by financially troubled conglomerates. The 100% cash margin requirement — while costly for SS Power — ensures that the power plant's coal imports are fully backed by cash, protecting Rupali Bank and the broader banking system from any additional exposure to the S Alam Group. The exemption also signals that Bangladesh Bank is willing to differentiate between a defaulter group's various assets — protecting strategic national infrastructure (power generation) while maintaining restrictions on non-strategic commercial activities. This nuanced approach may serve as a template for future cases where defaulter-owned strategic assets require continued operational support to protect broader national interests.