New Age, 27 July 2012
The non-bank financial institutions which failed to raise their minimum paid-up capital to Tk 100 crore by the June 30 deadline would face merger with other NBFIs if they fail to meet the requirement by December 31, said Bangladesh Bank officials.
The BB, however, gave different timeframes for different NBFIs to fulfil the requirement.
An official of BB told New Age that the central bank had extended the deadline for the 13 failed NBFIs after holding discussions with them one-to-one basis.
He said the BB would not issue any circular in this regard.
He said, ‘The December 31 deadline will not be applicable to all the 13 NBFIs. The BB has given some of them two to three months from the date of June 30 for fulfilling the requirement. We have considered new timeframe case-to-case basis.’
The central bank will take stern action against the NBFIs which will fail to increase their paid-up capital within the extended deadline.
‘In case of failure, they will have to be merged with other NBFIs,’ he said.
In July 2011, the BB had asked the NBFIs to raise their minimum paid-up capital to Tk 100 crore within June 30, 2012 to implement the Basel programme in this sector.
The NBFIs which failed to increase their paid-up capital by the deadline included Bangladesh Finance and Investment Company, Bangladesh Industrial Finance Company, FAS Finance and Investment, First Lease Finance and Investment, GSP Finance Company, Islamic Finance and Investment, MIDAS Financing, National Housing Finance and Investment, Hajj Finance Company and Reliance Finance.
BB officials could not confirm immediately the name of the three remaining failed NBFIs.
There are some 31 NBFIs operating in the country.
Asad Khan, president of the Bangladesh Leasing and Finance Companies Association, told New Age that they hoped that most of the failed NBFIs would be able to increase their paid-up capital within December.
He said the central bank had earlier suggested that the NBFIs which would fail to increase their paid-up capital within the BB deadline could go for floating initial public offering at the capital market to raise their capital.
Five NBFIs applied to the Securities and Exchange Commission for issuing their IPOs and they are waiting for the regulators’ approval, he said.
Under the circumstances, the fulfilment of the BB requirement will depend on the SEC decision, he said.
Asad Khan, also managing director of Prime Finance, said, ‘The BB is the highest authority in this regard. So, if it wishes, it can take stern action against any failed institution.’
Existing liquidity crisis in the financial sector and negative situation at the capital market have also hit the operation of the NBFIs, said another BB official.
He said the central bank would help the failed NBFIs so that they could increase their paid-up capital as early as possible.
Bangladesh Economy 
Leave a comment