Home ›› 17 Aug 2021 ›› Front
Default loans at non-bank financial institutions (NBFIs) rose 47.18 per cent year-on-year in March this year despite the loan moratorium facility offered by Bangladesh Bank.
At the end of March this year, non-performing loans (NPLs) in 34 NBFIs stood at Tk 10,353 crore – 15.46 per cent of the total outstanding loans. The total outstanding loans in the sector stood at Tk 66,962 crore, the latest BB data show.
On March 24 last year, BB asked NBFIs to keep classification unchanged until December of that year to help the borrowers tide over the economic shock. The loan moratorium facility has since been extended to the end of August this year.
“There are borrowers who have a bad track record on repayment and those who are unable to repay. We’re classifying them as defaulters,” said Md Golam Sarwar Bhuiyan, first vice-president of the Bangladesh Leasing and Finance Companies Association (BLFCA), a forum of the high officials of NBFIs.
He said they are trying their best to recover the loans. However, BB asked the NBFIs to keep the classification unchanged until August this year.
“We are now ramping up our loans recovery efforts after the government withdrew strict restrictions on movement,” said Golam Sarwar, the managing director of Industrial and Infrastructure Development Finance Company Ltd (IIDFC).
However, he added that most of the borrowers are facing difficulties due to the ongoing Covid-19 pandemic.
This year’s January to March quarter saw bad loans in the NBFI sector rise by Tk 300 crore, BB data show. The sector’s bad loans stood at Tk 10,053.60 crore at the end of December last year.
The BB inspection team found at least 10 NBFIs involved in loan scams and massive irregularities, which impacted the sector’s overall financial health.
Proshanta Kumar Halder, also known as PK Halder, a former MD of the NBFI Reliance Finance, allegedly embezzled about Tk 3,500 crore from four NBFIs: International Leasing and Financial Services (ILFSL), People’s Leasing and Financial Services, Reliance Finance and FAS Finance and Investment.
According to the central bank probe report, he controlled most shares of the ILFSL after buying them under the names of different individuals, including his family members.
Lack of corporate governance and the weak monitoring of the central bank are also responsible for the bad performance of the NBFIs, said experts. The High Court recently restructured the board of directors of ailing people’s leasing and international leasing to protect the depositors’ money.
