Bangladesh Bank has instructed non-bank financial institutions (NBFIs) to reduce their non-performing loans (NPLs), which amounted to Tk 17,855 crore at the end of March, constituting 25 percent of the loans they disbursed. The central bank aims to address the sector’s image crisis by emphasizing loan recovery, corporate governance, and paying back depositors’ money to restore confidence.
The governor of Bangladesh Bank will closely monitor the situation, holding meetings with the chief executives of NBFIs every three months. The NBFIs have been instructed to pay back depositors’ money to restore the sector’s image, he said, adding that a few companies have been struggling to do so. For 16 of the NBFIs, the NPL to outstanding loan ratio is over 30 percent, as per the BB data. Even more alarming is the fact that six out of the 16 had around 90 percent of their loans classified at the end of March 2023.
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