Approval must for NBFIs to write off subsidiaries’ loans

Now the non-bank financial institutions (NBFIs) will have to receive prior approval from the Bangladesh Bank to waive interests and write off defaulted loans of its subsidiaries.

The central bank issued a notice in this regard on Thursday with a view to keeping safe the depositors’ money at the financial institutions.

Some NBFIs are exceeding their investment limit in their subsidiaries and they are not complying with rules and regulations to waive interests and write off loans, the notice said. “As a result, discipline in the financial sector is being hampered.”

The central bank has taken the fresh decision to bring discipline in the banking sector and to guard the depositors’ money, it said.

Earlier in June, the Bangladesh Bank asked the NBFIs not to write off any defaulted loans without following the due legal course of action.