In a major relief move, Bangladesh Bank (BB) has decided to appoint administrators to initiate the liquidation process of five effectively bankrupt Non-Bank Financial Institutions (NBFIs) and return funds to thousands of distressed small depositors.
Under the regulatory rescue roadmap, the central bank will initially refund individual depositors with savings up to Tk 10 lakh. The required capital for this first-phase reimbursement will be disbursed from a specialized government fund allocated in the national budget, according to UNB report.
According to central bank sources, the five financial institutions designated for formal liquidation are FAS Finance, Fareast Finance, Aviva Finance, People's Leasing and Financial Services, and International Leasing and Financial Services.
Official data from Bangladesh Bank reveals that these five institutions collectively hold roughly Tk 2,700 crore deposited by nearly 27,000 individual retail investors, most of whom have faced severe financial uncertainty due to being denied withdrawals for over a decade.
The latest financial audits underscore a catastrophic collapse in the credit health of these institutions. As of December last, default loans at FAS Finance reached an unprecedented 99.99 percent, followed closely by International Leasing at 99.44 percent, Fareast Finance at 98.50 percent, People's Leasing at approximately 95 percent, and Aviva Finance at 93.93 percent.
The data indicates that the entire combined loan portfolio of these five non-bank lenders has turned into non-performing assets, rendering them completely incapable of continuing day-to-day corporate operations.
