Dhaka, Bangladesh (BBN)– The central bank of Bangladesh has warned the non-banking financial institutions (NBFIs) against irregularities over lending and concealing information in reporting their financial affairs.
The fresh warning was issued at a meeting of the chief executive officers (CEOs) and managing directors (MDs) of NBFIs with Bangladesh Bank (BB) Governor Fazle Kabir in the central bank headquarters in the capital on Wednesday.
The top executives were also cautioned that the BB would take stern action against them and others to protect depositors’ interests, if such irregularities are found in future.
“We’ve already taken actions against a few top executives of NBFIs in this connection,” SK Sur Chowdhury, deputy governor of the BB, told BBN in Dhaka after the meeting.
The NBFIs have also been advised to go for long-term investment, particularly in infrastructure-development projects and bond market.
“We’ve advised the NBFIs not to behave like banks,” the deputy governor explained.
At the meeting, the CEOs were advised to improve upon their quality of assets and take necessary measures to reduce the amount of non-performing loans (NPLs) through expediting their recover drives.
The NBFIs have also been instructed to play their due role in ensuring good governance in the sector.
“We’ve urged the central bank to raise our service charge to 1.0 per cent from the existing 0.5 per cent as loan-processing fee for maximum Tk 0.5 million instead of the existing Tk 0.20 million,” Mafizuddin Sarker, chairman of Bangladesh Leasing and Finance Companies Association (BLFCA), told the reporters.
Different issues like access of NBFIs to funds belonging to government, semi-government and autonomous bodies and tax on bond investment were also discussed at the meeting.
Currently, 33 NBFIs are running their business across the country.