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Bangladesh Bank approves closure of five NBFIs
Liquidation process to begin in July as default loans soar and firms fail to repay depositors
Daily Sun Report, Dhaka
Published: 13 May 2026, 09:09 AM
Bangladesh Bank’s board of directors has granted preliminary approval for the closure or liquidation of five non-bank financial institutions (NBFIs) amid mounting default loans and prolonged failure to repay depositors.
The decision was taken at a board meeting chaired by Governor Md Mostaqur Rahman on Tuesday (12 May), with the formal liquidation process scheduled to begin from July.
The five institutions are FAS Finance, Fareast Finance, Aviva Finance, Peoples Leasing and International Leasing. According to Bangladesh Bank data, their non-performing loan ratios range from more than 93 percent to nearly 100 percent.
Officials said the institutions had long been unable to recover defaulted loans, leaving them incapable of returning depositors’ funds.
A central bank official said the entities would be liquidated under the Bank Resolution Act, which outlines procedures for restructuring, merging or winding up financially distressed institutions.
As part of the process, Bangladesh Bank will appoint an administrator and two additional officials for each institution, while the firms will be declared non-operational.
The official added that individual depositors of the five institutions would be repaid, requiring an estimated Tk5,000 crore.
The government has reportedly assured the central bank that the necessary funds will be allocated in the upcoming national budget.
Bangladesh Bank first issued notices in May last year asking 20 NBFIs to explain why they should not be shut down due to high default loans and failure to return deposits. After reviewing recovery plans, the central bank initially shortlisted nine institutions for closure before narrowing the list.
According to sector insiders, widespread irregularities and financial scandals during the previous Awami League government contributed significantly to the crisis.
Among the major allegations is that former NRB Global Bank managing director PK Halder embezzled at least Tk3,500 crore from four NBFIs — Peoples Leasing, International Leasing, FAS Finance and BIFC.