State-owned sugar mills in Bangladesh, plagued by decades of mismanagement and irregularities, have failed to repay billions in bank loans, according to industry sources.

The mills, which operate under the Bangladesh Sugar and Food Industries Corporation (BSFIC), have informed five state-owned banks of their inability to meet loan installment payments. Among the affected mills are Pabna Sugar Mills, Shyampur Sugar Mills in Rangpur, Panchagarh Sugar Mills, Setabganj Sugar Mills in Dinajpur, Rangpur Sugar Mills, and Kushtia Sugar Mills.

BSFIC owes over Tk 9 billion to Sonali Bank alone, creating significant pressure on the country's largest bank. However, the total outstanding loan amount across all banks remains undisclosed. Interest on these loans has accumulated substantially, and the BSFIC needs nearly Tk 160 crore to make the down payments demanded by the banks.

In light of these financial challenges, BSFIC has requested the government to restructure its loans. The corporation seeks a waiver on both interest and principal payments and proposes converting the outstanding amounts into interest-free block accounts.

A government committee, including representatives from the Finance Ministry, Bangladesh Bank, state-owned banks, BSFIC, and the Ministry of Industries, has been formed to address the issue. After reviewing the financial situation of the mills, the committee recommended that the loans be converted into interest-free bonds, following the waiver of accrued interest.

"The ministry will soon hold a meeting with the stakeholders to discuss the matter," said Zakia Sultana, Senior Secretary of the Ministry of Industries, in a statement to The Mirror Asia.

Analysts attribute the ongoing financial losses of the sugar mills—spanning over five decades—to chronic mismanagement and irregularities within the sector.