People’s Leasing returning deposits on small scale

Scam-hit People’s Leasing and Financial Services Limited has started paying back depositors’ money on humanitarian grounds as they are facing various problems and leading miserable lives.

Its new board of directors formed by the High Court started returning deposits last month on a small scale.

Company officials said Tk 2 crore had been returned to 48 depositors in October and November.

Chairman of the company Barrister Kamal-ul Alam said deposits were being returned on a priority basis.

He said the board had formulated a policy in this regard as per a court instruction.

“We are paying back Tk 1 crore per month. A depositor can get back up to 10 per cent of his total deposit, but the amount will not exceed Tk 5 lakh,” he explained. He further said it was not possible to pay back all depositors now. “We are re-examining the company’s assets and liabilities.”

The chairman said the company had been recovering over Tk 1.5 crore from defaulters every month since the new board took over.

But most of the depositors do not know when they will get their money back.

“I have not got back my money yet. I did not get any notice in this regard either,” said depositor Wahidur Rahman, a retired employee of a private company.

He put Tk 40 lakh in a fixed deposit receipt (FDR) just a few months before the company shut its door in July 2019.

People’s Leasing Depositors Association Joint Convener Samia Binte Mahbub told The Business Post the new board formed over four months ago had not made any visible progress in paying back deposits.

“They are returning a little amount, but we do not want this type of help. We want all our money back,” she said.

A high official of the central bank said the banking regulator was observing what the new board was doing to revive the company.

He said Bangladesh Securities and Exchange Commission, another regulator of non-bank financial institutions (NBFIs), officials would meet the new board to know the company’s present situation.

Embezzlement of funds by directors, violations of company rules, massive irregularities in approving loans, and a lack of internal control and compliance led the company to close its operation, said an audit report of the Bangladesh Bank in 2019.

People’s Leasing was licenced by the central bank as an NBFI on November 24, 1997.

It was doing well until 2014, with net profit being Tk 19.66 crore that year, but started incurring losses from the following year.

Proshanta Kumar Halder, the then NRB Global Bank managing director who is also known as PK Halder, used his connections in People’s Leasing to get involved in various irregularities and swindled at least Tk 3,500 crore from it and three other NBFIs.

The government decided to liquidate the company in 2019 as the latter failed to return depositors’ money.

But the initiative affected the entire financial institution sector, forcing the government to backtrack on its decision.

Responding to a writ petition filed by 201 depositors against the company’s liquidation, the High Court on June 28 this year formed a new board to lead reforms.