After discovering that several NBFIs were making substantial investments in its affiliates or subsidiaries that exceeded the legal limit, the central bank said they must get approval from Bangladesh Bank before they can do so.
According to the statement, the central bank decided to take this action in order to safeguard depositors' interests and reestablish order in the financial sector.
The circular also noted that the institutions waived loan interest or write off amounts in violation of norms and regulations.
There was therefore a lack of discipline in loan distribution and recovery in the financial sectors, and there was a good chance that loans or investments from the related firms would not be repaid, it added.
The central bank was thus requested to provide NBFIs prior clearance before lending, waiving loans or interest, and writing off issued loans to their subsidiaries or associates.