To ensure good governance and accountability in the financial sector and to protect the interests of depositors and other creditors, Bangladesh Bank has declared four financial institutions non-viable.
At the same time, these institutions have been brought under a resolution framework, and operations have commenced with the appointment of administrators.
This information was announced in a press release issued by Bangladesh Bank on Sunday (August 9).
The four non-viable institutions are Aviva Finance Limited, Fareast Finance & Investment Limited, FAS Finance & Investment Limited, and International Leasing and Financial Services Limited.
Bangladesh Bank stated that these institutions were declared non-viable under the Bank Resolution Act, 2026.
The decision was taken following a resolution by the central bank’s board of directors after assessing the financial capacity, recovery prospects, and liability settlement capabilities of these entities.
According to the central bank, several key factors influenced the decision, including large capital shortfalls, high levels of classified loans and investments, failure to maintain required liquidity, continuous decline in earnings capacity, and an inability to settle liabilities to depositors and other creditors.
To conduct the resolution process smoothly and effectively, relevant officials from Bangladesh Bank have been appointed as Administrators and Associate Administrators.
The appointed officers will oversee the administration, management, and resolution-related activities of the respective institutions.
Through this process, initiatives will be undertaken to review the current financial condition of the institutions, accurately assess their assets and liabilities, and protect the interests of depositors and related creditors.
Bangladesh Bank noted that this step aims to re-establish discipline and good governance in the financial sector, ensure accountability, and restore public trust.
The central bank expects that the resolution framework will bring the financial situation of the four institutions under control and lead to effective progress in safeguarding the interests of depositors and other stakeholders.
This recent move signals a firm regulatory stance regarding weak and long-troubled entities in the financial sector. Specifically, the resolution framework is being utilized to determine the future of institutions facing persistent capital shortfalls, default loans, liquidity crises, and failure to settle liabilities.