Dhaka, Bangladesh (BBN) - The central bank of Bangladesh is unlikely to extend the deadline for doubling the paid-up capital of the non-banking financial institutions (NBFIs) to a minimum BDT 1.0 billion, officials said.
The NBFIs will have to raise their paid-up capital to a minimum of BDT 1.0 billion from the existing BDT 500 million by June 30 this year.
"There is no valid ground for extending the deadline," a senior official of the Bangladesh Bank (BB) told BBN on Monday, adding that the BB earlier asked the NBFIs to increase their capital and meet the required benchmark by issuing rights or bonus shares or floating initial public offerings (IPOs).
Currently, 31 NBFIs are operating in the country.
The issue will be discussed at a review meeting between the managing directors and chief executive officers of the NBFIs and BB Governor Atiur Rahman, scheduled for on Tuesday, they added.
"The central bank has raised the amount of paid-up capital to consolidate the capital base of the country's NBFIs in line with the Basel-II framework, being implemented form January 1 this year," another central bamker said.
The Basel-II accord has been prepared on the basis of three factors: minimum capital requirement, supervisory review process, and market discipline.
Three types of risks - credit risk, market risk, and operational risk - have to be considered for the minimum capital requirement.
Meanwhile, the Bangladesh Leasing and Finance Companies Association (BLFCA) has requested the BB governor for extension of the deadline on minimum paid-up capital requirement of BDT 1.0 billion up to June 30, 2013.
The BLFCA has also proposed resuming housing loan window under the BB's refinancing scheme to meet one of the basic needs of people.
The central bank suspended disbursement of loan under the refinancing scheme since May 1, 2010 to curb inflationary pressure on the economy.
BBN/SSR/AD-29May12-1:40am (BST)
