The non-bank financial institutions (NBFI) are grappling with a liquidity crisis, and they may face even greater challenges due to the deposit ceiling imposed by the Finance Companies Act 2023. The Act restricts NBFIs from accepting deposits exceeding Tk50 lakh from an individual, or up to Tk 1 crore if the individual also deposits in a joint name. However, the Act grants the Bangladesh Bank the authority to adjust this limit at its discretion. The NBFI sector is hopeful that the central bank will consider this flexibility.
While some industry representatives, like The Chairman of the Bangladesh Leasing and Finance Companies Association, have received assurances of rational implementation, top-tier NBFI CEOs are less assured. They express concerns about competition from banks, the lack of bond financing, and the need for larger deposits. The restrictions are particularly burdensome for strong NBFIs focused on maintaining liquidity. Some suggest that the policy is stricter for NBFIs compared to banks. The industry is now analyzing the implications and planning to communicate their concerns to the government and the central bank.
Source for more details:
