DHAKA: Bangladesh Bank (BB) yesterday declared four non-bank financial institutions (NBFIs) non-viable and initiated resolution proceedings under the Bank Resolution Act 2026 to protect depositors and restore discipline in the financial sector.
The four entities are Aviva Finance Ltd, Fareast Finance and Investment Ltd, FAS Finance and Investment Ltd, and International Leasing and Financial Services Ltd, according to a BB press release.
The central bank dissolved the boards of trustees of these NBFIs, vacated the posts of managing director, and appointed administrators from its own ranks to oversee the resolution process. The decision followed a comprehensive review of their financial health and recovery prospects.
BB cited acute capital shortfalls, alarming levels of bad loans, persistent liquidity failures, a sharp deterioration in earnings, and an inability to honour obligations to depositors and creditors as the primary triggers for intervention.
Alauddin Hossain, director of the Bank Supervision Department-11, has been appointed administrator of Aviva Finance. Sadekur Rahman, director of the Bank Supervision Department-10, will oversee Fareast Finance, while Abu Sama Md Ataur Rahman, director of the Bank Supervision Department-2, will supervise FAS Finance. Mohammad Iqbal Hossain, director of the Bangladesh Bank Training Academy, will act as administrator of International Leasing.
Officials said administrators have initially been appointed to the four NBFIs, excluding People’s Leasing, because of a legal complication involving the latter. Their primary responsibility will be to carry forward liquidation and repay depositors with government funds.
The five institutions — including People’s Leasing — have exceptionally high levels of non-performing loans, ranging from 93 per cent to nearly 100 per cent of their portfolios. Together, they hold deposits worth Tk 16,076 crore.
Individual depositors will be prioritised in repayment, with each eligible to receive up to Tk 10 lakh. Around Tk 2,700 crore of deposits belong to individual customers.
In May last year, BB began the process of revoking the licences of 20 NBFIs that had failed to return customers’ deposits. -The Daily Star/ANN
