Six NBFIs finally set for liquidation, three get time to recover

Six non-bank financial institutions (NBFIs) out of 35 are set to be liquidated finally due to poor financial health, after the Bangladesh Bank (BB) board approved the move today.

The six NBFIs are FAS Finance, Premier Leasing, Fareast Finance, Aviva Finance, People’s Leasing, and International Leasing.

Initially, the regulator had planned to liquidate nine NBFIs. However, after two days of hearings, three companies -- Prime Finance, GSP Finance, and Bangladesh Industrial Finance Company (BIFC) -- were given three to six months to improve their finances.

Arief Hossain Khan, executive director and spokesperson of Bangladesh Bank, confirmed the development to The Daily Star.

The decision was made at a BB board meeting chaired by Governor Ahsan H Mansur.

A senior central bank official, speaking on condition of anonymity, told The Daily Star that the central bank has already declared six NBFIs non-viable, while the remaining three have been given three to six months to improve their financial condition.

“If the three institutions fail to recover or show meaningful progress, they will be added to the liquidation list,” the official added.

Last week, BB held hearings with the nine NBFIs -- FAS Finance, Bangladesh Industrial Finance Company, Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing, and International Leasing -- to determine if they had grounds to oppose liquidation.

In November 2025, the BB board approved the liquidation of troubled NBFIs under the Bank Resolution Ordinance 2025, the country’s first comprehensive framework for resolving failing banks and NBFIs.

The ordinance outlines procedures for merging, restructuring, or closing distressed institutions and sets the hierarchy for repaying creditors once assets are sold.

Together, the nine NBFIs account for 52 percent -- Tk 25,089 crore -- of the sector’s total defaulted loans as of the end of 2024, reflecting years of unchecked lending irregularities and capital erosion.

BB Governor Ahsan H Mansur recently said that individual depositors of the nine troubled NBFIs may recover their principal amounts before Ramadan in February.

A senior BB official added that the central bank will write to the Ministry of Finance to request a Tk 3,000 crore bailout package, as the number of NBFIs facing liquidation has now decreased.

Earlier, the BB governor had said the Ministry of Finance had verbally approved Tk 5,000 crore for the liquidation of the nine NBFIs.

According to central bank data, the nine institutions hold Tk 15,370 crore in deposits, of which Tk 3,525 crore belongs to individual depositors and Tk 11,845 crore to banks and corporate clients.

As of September 2025, the country’s 35 NBFIs had Tk 29,408.66 crore in non-performing loans, equal to 37.11 percent of their total outstanding loans of Tk 79,251.11 crore, according to BB data.

A year earlier, in September 2024, the sector’s non-performing loan ratio was 35.52 percent.