BB asks NBFIs to find ways to restructure weak peers | The Daily Star
12:00 AM, March 04, 2020 / LAST MODIFIED: 01:17 AM, March 04, 2020

BB asks NBFIs to find ways to restructure weak peers

The central bank yesterday asked non-bank financial institutions to explore avenues to restructure their weak peers with a view to improving the image of the financial sector.

The banking watchdog came up with the proposal at a meeting with the Bangladesh Leasing and Finance Companies Association (BLFCA), a forum of the managing directors of the NBFIs, at the central bank headquarters in Dhaka.

Bangladesh Bank Governor Fazle Kabir and managing directors of a good number of NBFIs were present.

Some NBFIs are struggling to survive as they faced a wide-range of financial scams in recent years.

"The BLFCA has made some recommendations to the central bank to overcome the existing woes in the NBFI sector. And the BB has accepted the proposals very positively," said BLFCA Chairman Mominul Islam.

The central bank sought suggestions from the BLFCA on how to restructure the weak NBFIs as well, he said.

"We will work on it and give proposals to the central bank to this end. Fresh sponsor-shareholders may be allowed into the weak NBFIs in order to improve the financial health," he said.

The lenders requested the central bank to extend emergency liquidity support to the NBFIs against their cash reserve requirement and the statutory liquidity ratio, except those struggling owing to poor corporate governance.

"The central bank has given an assurance to provide the facility as per the existing rules and regulations," Islam said.

The association sought similar supports from the finance ministry on Monday in order to make the NBFI sector vibrant.

 

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