The Bangladesh Bank has directed non-bank financial institutions (NBFIs) to complete legal procedures in order to replace their company suffix "Limited" with PLC.

The central bank gave the direction in a notice on Wednesday.

In Bangladesh, companies are switching to the PLC (Public Limited Company) suffix in order to comply with the amended Company Act 1994. The amendment was made in 2020.

A PLC is a public company and is the equivalent of a US publicly traded company that carries the Inc. or corporation designation.

The use of the PLC abbreviation after the name of a company communicates to investors and to anyone dealing with the company that it is a publicly traded corporation.

As per the amendment, NBFIs would have to change the Memorandum of Association and the Articles of Association in order to assume the PLC suffix, said the BB notice.

Currently, 35 NBFIs are operating in Bangladesh while the maiden one was established in 1981. Of them, two are fully government-owned, one is the subsidiary of a state-run commercial bank, 19 were initiated by private domestic initiative, and 13 were initiated by joint venture initiative.

Major sources of funds for NBFIs are term deposits (at least three months tenure), credit facilities from banks and other NBFIs, call money as well as bond and securitisation.

NBFIs can conduct their businesses with diversified financing modes such as syndicated financing, bridge financing, lease financing, securitisation instruments, and private placement of equity.

They are not allowed to issue cheques, pay orders or demand drafts, receive demand deposits, and be involved in foreign exchange financing

In February, the central bank gave permission to banks to complete legal procedures to add PLC as a suffix.