Bangladesh Bank has convened a special board meeting on June 9 to finalise the liquidation process of five ailing non-bank financial institutions (NBFIs) that have collectively kept thousands of crores of taka in depositors’ funds frozen for years.
The meeting, scheduled just two days before the national budget for 2026-27 is announced, is expected to place a full roadmap for liquidation, a framework for returning deposits, and a proposal for budgetary support.
If the board approves the proposal, it will be swiftly sent to the Ministry of Finance to secure necessary allocations in the upcoming budget, central bank sources said.
The Bangladesh Bank board, chaired by the governor, includes the secretaries of the Finance Division and the Financial Institutions Division, along with the chairman of the National Board of Revenue. Officials say this makes the June 9 meeting the single most significant policy step in the liquidation process so far.
Five firms on the list
The institutions identified for liquidation are First Asia Securities (FAS) Finance, Fareast Finance, Aviva Finance, People’s Leasing and Financial Services, and International Leasing and Financial Services.
At a previous board meeting on May 12, an in-principle decision was taken to liquidate the five NBFIs in the first phase. Subsequently, the central bank prepared a detailed implementation plan covering deposit repayment priorities, sources of funds, disbursement methods, and potential government assistance.
Officials say the financial health of these firms has deteriorated beyond recovery through conventional restructuring efforts, leaving liquidation as the only viable option to protect depositor interests.
Small depositors to get priority
Bangladesh Bank spokesperson Arif Hossain Khan said the framework being prepared focuses primarily on returning money to small depositors.
“The last board meeting gave an in-principle decision to liquidate five financial institutions. Accordingly, the relevant department has prepared the terms and conditions and a full framework. The main goal is to return the money of small depositors,” he said.
According to the proposal, small depositors will be given priority in the first phase. Larger depositors will be considered later based on fund availability and progress in selling assets. Customers are expected to receive back their principal deposits.
From nine to five
Initially, the central bank had decided to liquidate nine NBFIs. Three sought more time, narrowing the list to six. From those, Premier Leasing also requested time, leaving five to be liquidated in the current first phase.
According to Bangladesh Bank data, approximately Tk 15,370 crore remains trapped in nine weak NBFIs. Of this amount, Tk 3,525 crore belongs to individual depositors, while Tk 11,845 crore is owed to banks and corporate entities. Thousands of customers have suffered financial hardship as these institutions have failed to return deposits for extended periods.
Little left for shareholders
An internal assessment by the central bank found that defaulted loan ratios at the selected institutions range from 90 percent to nearly 100 percent, with net asset values in negative territory. Officials say little to nothing is likely to remain for ordinary shareholders after depositors and creditors are paid.
The June 9 board meeting will not only decide the fate of the five NBFIs but also mark the first practical application of a full-fledged NBFI resolution framework in the country’s financial sector, officials added.
If the board gives the green light, the formal liquidation process could begin at the start of the new fiscal year.
