Bangladesh Bank has announced plans to close nine non-bank financial institutions (NBFIs) as part of efforts to safeguard "depositors’ interests".
Central bank Governor Ahsan H Mansur confirmed the move, saying that the decision was taken to ensure people could recover their savings safely, reports bdnews24.com.
The nine institutions slated for closure are FAS Finance, Bangladesh Industrial Finance Company, Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing, and International Leasing.
According to central bank data, defaulted loans in the financial sector stood at Tk 250.89 billion at the end of last year, with more than half linked to these nine firms.
The government is expected to provide funds to cover customer claims, though the amount has yet to be decided.
“Each institution is being monitored, and only then will we determine how much government support is required,” Mansur said, adding that the closures would be completed within the year.
In January, Bangladesh Bank identified 20 NBFIs as financially weak. While nine are being shut down immediately, the remaining 11 have been given time to improve their capital base and strengthen their balance sheets. If they fail, they too could face closure.
Loan recovery will continue even after liquidation, the governor stressed. “Every asset, including mortgaged properties, will be pursued, no matter how long it takes.”
A senior official said the central bank had issued notices to all 20 institutions asking why their licences should not be cancelled.
“The responses from nine were not satisfactory, so this decision has been taken,” the official said.
