NBFI depositors may get money back before Ramadan

Individual depositors of nine ailing non-bank financial institutions (NBFIs) lined up for liquidation may get back their principal amounts before Ramadan in February, said Bangladesh Bank Governor Ahsan H Mansur.

At a press conference at the central bank headquarters yesterday, Mansur said the legal process for liquidation would begin this week.

In December last year, the central bank moved to wind up the non-banks after its board approved their closure under the newly enacted Bank Resolution Ordinance 2025, the country's first comprehensive framework for resolving failing banks and non-banks.

The nine NBFIs are FAS Finance, Bangladesh Industrial Finance Company, Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People's Leasing, and International Leasing.

According to central bank data, they hold Tk 15,370 crore in deposits, of which Tk 3,525 crore belongs to individuals and Tk 11,845 crore to banks and corporate clients.

According to central bank officials, the government has verbally approved around Tk 5,000 crore to repay the non-bank depositors.

"From this week, we are going to initiate the legal process to declare them non-viable and carry out asset valuations," Mansur said.

"This will determine whether they have negative or positive assets, and based on that assessment, a decision will be made on whether shareholders will receive anything or not," he added.

MERGING BANKS MAY FACE FURTHER AUDIT FOR SCAM LINKS

The five banks currently being merged will undergo further forensic audits to identify officials involved in irregularities and scams during the previous regime, Mansur said.

He said those found responsible are likely to lose their jobs.

Over the past two days, the governor said depositors of the merging banks withdrew Tk 107 crore, while fresh deposits of Tk 44 crore were made.

"A total of 13,314 transactions took place over the last two days... The volume of withdrawals is much lower than what we had anticipated," Mansur said.

Among the five banks, EXIM Bank recorded the highest withdrawals at Tk 66 crore.

The governor said that depositor confidence had not eroded entirely, as new deposits continued during the same period. "Those who place new deposits will be able to withdraw their money at any time," he added.

The press conference also confirmed that Sammilito Islami Bank PLC, the large commercial lender being created through the bank merger, will open on January 19.

The central bank governor said the new bank will operate privately but will be temporarily government-owned, with a suitable investor expected to take over within three years.

Mansur said the bank would face some immediate challenges, including restoring export-import operations, remittance services, and utility bill payments.

Tk 20,000CR-Tk 30,000CR NEEDED TO MERGE MORE BANKS

While responding to a question, Mansur said bank resolution is an ongoing process, and several more banks will gradually come under the merger initiatives.

He estimated that an additional Tk 20,000 to Tk 30,000 crore will be required, with no allocation in this year's budget, leaving the matter for the next government.

"The next government will need to give the green light. Subject to these considerations, we will continue our activities, as bank resolution is never free. It is a costly exercise, and bank resolution takes place in many countries around the world," he said.