Thousands of retail depositors are now at the front line of a deepening financial crisis, with around Tk 3,500 crore of clients’ money effectively locked in six failed non-bank financial institutions, leaving little chance of recovery before Eid as liquidation processes drag on.
The institutions"FAS Finance, Fareast Finance, People’s Leasing, International Leasing, Aviva Finance and Premier Leasing"have already entered formal liquidation after being declared non-viable, and their balance sheets show a near-total breakdown of repayment capacity.
For ordinary clients, this means their savings are no longer accessible as cash, but tied up in a slow-moving legal and recovery process.
The immediate concern is retail exposure. These are individual depositors"many small savers"whose funds were placed in fixed deposits and savings instruments, now frozen with no clear payout timeline.
Bangladesh Bank has indicated that any repayment plan, once activated, will prioritise these clients first, but the absence of ready funds is delaying even that initial step.
Beyond the client layer lies a much larger financial hole. The total locked amount across the six firms stands at about Tk 15,370 crore, meaning the bulk"over Tk 11,800 crore"belongs to banks, corporate entities and other institutions. This creates a cascading pressure inside the financial system itself, as institutional funds remain stuck alongside retail deposits.
The root of the crisis is severe asset erosion. These firms are carrying extreme levels of defaulted loans"FAS Finance nearly 100 percent, Fareast Finance above 98 percent, International Leasing over 96 percent, People’s Leasing around 95 percent, Aviva Finance near 83 percent and Premier Leasing about 75 percent. In effect, most of the money that should have been returned to depositors is trapped in bad loans, many of which may never be fully recovered.
The interim government has taken a hardline clean-up approach instead of injecting blanket bailouts. It has approved liquidation, appointed administrators, and initiated asset verification and recovery drives. The strategy is to release funds in phases"starting with small clients"based on whatever can be recovered and supplemented by limited government support.
But the numbers expose a serious constraint. Estimates suggest that Tk 5,000 crore to Tk 9,000 crore may be required to meaningfully support repayments, yet only a fraction of that is currently available or committed. Without sufficient fiscal backing, even priority payments to clients remain stalled.
This leaves liquidation as a slow grind rather than a quick solution. Assets must be sold, loans chased, and claims legally cleared before any cash reaches depositors. The process ensures order, but not speed.
A Bangladesh Bank spokesperson acknowledged the situation, saying, “The new government has already taken on multiple social schemes. If funds become available, we will move on this matter.”
That statement underlines the core reality. Clients are first in line but not yet paid, institutions are exposed to even larger losses, and more than Tk 15,000 crore remains locked in a system where recovery"not rescue"will ultimately decide how much money comes back and when.
Currently all six distressed NBFIs are now under Bangladesh Bank supervision or liquidation frameworks, but not run by normal management. PLFSL is fully under court-appointed liquidator control with Bangladesh Bank monitoring.
International Leasing and FAS Finance operate under special regulatory oversight teams managing recovery and claims. First Finance is under strict central bank supervision with reduced board authority and restructuring direction.
BIFC remains in liquidation-type control due to insolvency, with asset recovery priority. Premier Leasing is under Bangladesh Bank-led resolution management. In all cases, administrators are institutional teams, not individually public CEOs, focusing on asset recovery and depositor repayment.
