Cenbank to liquidate five NBFIs, gives four others 3 months to recover
The central bank further instructed the companies to intensify recovery of overdue loans and substantially reduce classified loans through rescheduling, negotiated settlements and other lawful recovery measures.
The Bangladesh Bank has decided to liquidate five troubled non-bank financial institutions (NBFIs) after determining that they are no longer financially viable, while granting four others a final three-month opportunity to restore their financial health under strict conditions.
The decision was taken under the Bank Resolution Act, 2026 following a review of Financial Viability Reports on nine distressed NBFIs at a recent board meeting.
The institutions slated for liquidation are People's Leasing and Financial Services Limited, International Leasing and Financial Services Limited, Aviva Finance Company Limited, FAS Finance and Investment Limited, and Far East Finance and Investment Limited.
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The central bank said protecting depositors would be the top priority during the liquidation process. To facilitate repayments, the government and Bangladesh Bank have decided to establish a special fund.
Before any repayments are made, each institution will undergo a mandatory forensic audit by a reputed audit firm to identify those responsible for financial irregularities. Legal action will be taken against individuals found guilty.
According to Bangladesh Bank officials, the five institutions hold around Tk2,700 crore in deposits belonging to about 27,000 depositors. Once administrators are appointed, individual depositors will initially receive up to Tk10 lakh each under the repayment plan.
Bangladesh Bank's latest Financial Stability Report shows the extent of the crisis. As of December last year, FAS Finance's non-performing loan ratio stood at 99.99%, International Leasing's at 99.44%, Far East Finance's at 98.50%, People's Leasing's at nearly 95%, and Aviva Finance's at 93.93%.
Among the five institutions, Aviva Finance was chaired by controversial businessman Saiful Alam, while the other four were controlled by former financier Prashanta Kumar (PK) Halder, who has been accused of masterminding one of Bangladesh's biggest financial scandals.
Meanwhile, Prime Finance and Investment Limited, GSP Finance Company (Bangladesh) Limited, Bangladesh Industrial Finance Company Limited (BIFC) and Premier Leasing and Finance Limited have been given three months to regain financial viability under Section 15 of the Bank Resolution Act.
To avoid liquidation, the institutions must inject fresh capital through sponsor shareholders, sell assets, recover defaulted loans to improve liquidity and meet other conditions set by the central bank.
Bangladesh Bank warned that failure to meet even one of the conditions within the stipulated period would trigger immediate resolution or liquidation proceedings. The four institutions have also been directed to submit monthly progress reports to the central bank's Resolution Department by the seventh day of each month.
The latest action follows notices issued to 20 NBFIs in May last year over high default loans and failure to repay depositors. After assessing their recovery plans, the central bank concluded that nine institutions had failed to present credible turnaround strategies, leading to the latest resolution measures.
