Bangladesh Bank on Wednesday issued a three-month deadline to four non-bank financial institutions to turn them from non-viable to viable institutions.
This information was confirmed by Bangladesh Bank's assistant spokesperson Shahriar Siddiqui.
He also said that if the institutions fail to fulfill the stipulated conditions within three months, resolution or reorganization, merger or other necessary legal measures will be taken against the concerned institutions as per the Bank Resolution Act, 2026.
Bangladesh Bank said that this time has been given considering the commitments given by the boards of directors of the institutions based on the decision of the board of directors as per Section 15 of the Bank Resolution Act, 2026.
The objective is to restore the financial capacity of the institutions through prompt corrective measures and most importantly, ensure the ability to return the money to general and individual depositors.
The four institutions that got three months of time according to the decision of Bangladesh Bank are Prime Finance and Investment Limited, GSP Finance Company (Bangladesh) Limited, Bangladesh Industrial Finance Company Limited (BIFC), and Premier Leasing and Finance Limited.
Due to the long-standing liquidity crisis, high defaulted loans and capital shortage, many customers of these institutions are not getting their deposits back on time. As a result, uncertainty and anxiety have been created among depositors.
Bangladesh Bank has said that the institutions will have to implement several important steps within the next three months.
First, the board of directors and sponsor shareholders of the concerned institutions will have to fill the capital shortage by investing new capital. At the same time, the necessary liquidity will have to be ensured so that it is possible to repay the depositors.
Second, the institutions will have to collect cash by selling their own assets and movable and immovable properties. In addition, special initiatives will have to be taken to collect outstanding loans.
Third, the rate of classified loans should be brought down to an acceptable level through rescheduling, restructuring or settlement of defaulted loans. Through these steps, the financial condition of the institution should be improved and the depositors' liabilities should be ensured.
Bangladesh Bank has clearly stated that if an institution fails to fulfill one or more conditions within the stipulated three months, the Bank Resolution Department will immediately initiate resolution activities as per the Bank Resolution Act, 2026.
In this case, considering the situation, restructuring of the institution, bringing in new investors, merging with other institutions, selling assets, changing management or other necessary steps as per the law may be taken.
According to analysts, this is an important step to restore public confidence in the country's financial institutions. In the past, depositors of many finance companies that fell into crisis did not get their money back for years. As a result, a crisis of confidence was created in the entire non-bank financial institution (NBFI) sector.
Under the new law, Bangladesh Bank is holding the boards of directors of the institutions accountable for the first time by setting a specific time limit. That is, not only giving time, but also giving a clear message of taking strict legal action if there is no visible progress within the stipulated time.
