Bangladesh Bank issues a new directive today

The central bank has allowed financially sound non-bank financial institutions (NBFIs) to accept deposits above the Tk 50 lakh limit set by law for individual depositors.

As of December last year, they disbursed Tk 25,808 crore in loans against collateral worth Tk 6,899 crore, according to the BB report

When most non-bank financial institutions (NBFIs) in Bangladesh are in hot water with high ratios of non-performing loan (NPL), a handful have been successfully able to keep the rate low.

Twelve non-bank financial institutions (NBFIs) out of a total 35 are holding nearly 73.5 percent of the sector’s bad loans, according to Bangladesh Bank data, reflecting a precarious situation at those entities.

Non-bank financial institutions (NBFIs) in the past fiscal year saw their defaulted loans reach a record 33.15 percent of all disbursed loans, according to the central bank, indicating a fragile situation in the sector thanks to widespread loan irregularities and scams.

Deposits at non-bank financial institutions (NBFIs) have slightly increased on an interest rate hike but the number of deposit accounts have dropped sharply, indicating a lack of trust.

Authorities must improve monitoring to keep the sector in check

Of the 23 listed NBFIs in Bangladesh, 17 published their financial reports

Deposits of Tk 1,600 crore of four state-run commercial banks —Sonali, Rupali, Agrani, and Janata — have been stuck in several weak non-bank financial institutions (NBFIs) as the latter have repeatedly failed to repay despite maturity owing to a persisting liquidity crisis.

Non-bank financial institutions (NBFIs) have remained comparatively less regulated owing to a major gap between the Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC) on some provisions relating to corporate governance, according to analysts.

Investors are hardly showing any interest to buy stocks of banks mainly due to the sector’s key indicators portraying a gloomy outlook. 

Nearly half of non-bank financial institutions (NBFIs) saw a third of their loans turn into non-performing ones at the end of March 2023, which gives an indication of the tough times the sector was going through mainly due to massive irregularities in 8 to 10 companies. 

Although most non-bank financial institutions (NBFIs) in Bangladesh are struggling with a high rate of non-performing loans (NPLs), some of them are bucking the trend by maintaining a lower ratio.

All of the listed non-bank financial institutions (NBFIs) in Bangladesh that published their financial reports for the January-June period of the current calendar year reported lower earnings due to reduced interest income, among other reasons.

Seven months have passed since the world bid adieu to 2022, but almost half of the listed non-bank financial institutions (NBFIs) in Bangladesh have not published their financial statements for the year, breaching securities rules. 

Fourteen non-bank financial institutions (NBFIs) out of a total of 35 were in the red zone last year as per the stress test report of the central bank. 

The Bangladesh Bank yesterday decided in principle to allow Nagad Finance PLC, a proposed non-bank financial institution (NBFI), to run mobile financial services. 

The non-bank financial institutions (NBFIs) will have to take permission from the central bank to lend to their subsidiaries or associates and waive loans or interests.