Bangladesh Bank has approved the liquidation of nine non-bank financial institutions, triggering the largest clean-up of the sector since its inception. The decision was taken at the central bank’s board meeting on Sunday, chaired by Governor Ahsan H Mansur, under powers granted by the new Bank Resolution Ordinance 2025.
With the approval secured, the central bank will now appoint liquidators, sell the institutions’ assets and distribute the proceeds according to the repayment hierarchy set in the resolution law, with depositors given top priority.
The nine NBFIs being wound down are Peoples Leasing and Financial Services, International Leasing and Financial Services, Aviva Finance, FAS Finance and Investment, Fareast Finance and Investment, Bangladesh Industrial Finance Company (BIFC), Premier Leasing and Finance, GSP Finance Company and Prime Finance and Investment.
A senior Bangladesh Bank official told TIMES that many depositors have had their savings locked for years and the regulator has received verbal approval for around Tk5,000 crore to support deposit repayments.
“Returning the deposits of the affected customers is our top priority,” he said.
According to industry data, the nine firms together account for about 52 per cent of all defaults in the NBFI sector. Their collapse has trapped about Tk15,370 crore in deposits – Tk3,525 crore belonging to individual savers and Tk11,845 crore to banks and corporate entities.
Peoples Leasing holds the largest volume of blocked individual deposits (Tk1,405 crore), followed by Aviva Finance (Tk809 crore), International Leasing (Tk645 crore), Prime Finance (Tk328 crore) and FAS Finance (Tk105 crore).
Bangladesh Bank’s internal assessments show catastrophic financial deterioration in the nine entities. FAS Finance has 99.93 per cent classified loans and Tk1,719 crore in losses; Fareast Finance has 98 per cent bad loans and Tk1,017 crore in losses; BIFC has 97.30 per cent bad loans and Tk1,480 crore in losses; International Leasing has Tk3,975 crore in non-performing loans – 96 per cent deemed unrecoverable – and Tk4,219 crore in accumulated losses.
Peoples Leasing’s loan default rate stands at 95 per cent with Tk4,628 crore in losses; Aviva Finance has 83 per cent bad loans and Tk3,803 crore losses; Premier Leasing has 75 per cent bad loans and Tk941 crore in losses; GSP Finance has 59 per cent bad loans and Tk339 crore in losses; and Prime Finance has 78 per cent bad loans and Tk351 crore in losses.
Most of these firms now have negative net asset value, leaving ordinary shareholders with virtually no chance of recovery once depositors and creditors are repaid.
The liquidation move also coincides with a broader clean-up drive, including the recent licensing of Sammilito Islami Bank – created from the merger of five distressed Shariah-based banks – signalling the regulator’s shift toward aggressive intervention and resolution across the financial system.
“This is the first real test of Bangladesh’s new resolution regime,” said a senior central bank official.
“For years, these institutions survived on regulatory forbearance, not financial strength. Liquidation is now the only credible way to protect depositors and restore discipline in the sector,” the official added.
