For the first time in the country’s financial sector, 9 financial institutions are being closed in Bangladesh. Bangladesh Bank said the decision has been taken to protect the interest of customers.
Bangladesh Bank has decided to close these 9 financial institutions due to failure to repay depositors, increasing non-performing loans and acute capital shortage. The nine institutions targeted for closure are FAS Finance, Bangladesh Industrial Finance Company, Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing, and International Leasing, which the government has declared ineffective and an order has been issued to close them very soon.
Bangladesh Bank data revealed that the amount of defaulted loans in the financial sector last year was TK 250.89 billion, and these nine institutions were reportedly linked to 52% or more than half of the loan defaults and the Bangladesh government declared to close all nine institutions.
The present Governor of Bangladesh Bank is Dr. Ahsan H. Mansur said that we are doing this to return the depositors’ money. He also said “the customer’s interest is the bank’s first priority.” Meanwhile, the liquidation process could begin next month, according to finance company laws 2023, where it is also said that Bangladesh Bank can apply to the High Court with government permission and appointed liquidator for the process.
Due to corruption, irregularities and loan defaults, the government finally took a hard stance and closed 9 financial institutions in Bangladesh.
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