Deposits in Bangladesh’s non-bank financial institutions (NBFIs) experienced a decline of 1.19% or Tk 53.8 crore by the end of March compared to December. The decrease was primarily due to a lack of trust and confidence among customers in these entities. However, loans disbursed by NBFIs increased by Tk 917.7 crore in the January-March period compared to the previous quarter, according to data from Bangladesh Bank. The total loans of the sector reached Tk 71,239 crore at the end of March 2023, indicating a 61% higher disbursement than deposit collection. This imbalance raises concerns about the asset-liability mismatch for NBFIs. Additionally, loan recovery by NBFIs dropped by 5.46% in the January-March period. The liquidity crisis in the sector is attributed to fund withdrawals by banks and the lack of public confidence in NBFIs. The government has taken steps to revive struggling NBFIs, including People’s Leasing and Financial Services, Bangladesh Industrial Finance Company, and International Leasing and Financial Services.
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