Strategic Finance and Investments gets NBFI licence from BB

The central bank yesterday awarded the licence to a non-bank financial institution despite a challenging business environment facing the financing sector and weakening health of many NBFIs. 

Strategic Finance and Investments received the licence to begin operations at a time when 10 of the 35 NBFIs are struggling to return funds to banks and customers upon maturity.

It applied for the approval on October 16 last year and the central bank was compelled to respond promptly as the sponsors have a strong connection with the influential quarters, said a central bank official requesting anonymity.

As per the initial biographical report of the company, Anjuman Ara Shahid, wife of Padma Bank Chairman Chowdhury Nafeez Sarafat, is the chairman of the new NBFI.

She is also a sponsor-shareholder of Padma Bank, which was rechristened from Farmers Bank as part of its effort to sweep the gross irregularities and loan scams under the carpet and get an image makeover.

There is a lack of confidence among the depositors in the NBFI sector and many cannot withdraw funds upon maturity, a central bank official said.

So, the higher-ups of the central bank should have shunned giving the licence to the new NBFI in the interest of the financial sector, he said.

At the end of September last year, the total default loans in NBFIs amounted to Tk 6,838 crore, up 25.23 per cent from six months earlier, according to data from the central bank.

The amount would have been much larger had the default loans of People's Leasing and Financial Services been added to the list. Default loans of People's Leasing are now more than Tk 500 crore.

In July last year, the BB was forced to start the process of liquidating People's Leasing and Financial Services as the NBFI failed to repay depositors' money despite the maturity of funds.