In a significant move to safeguard small investors, the government has announced that individual depositors of nine financially distressed non-bank financial institutions (NBFIs) will receive the full return of their principal amounts, though no interest will be paid. The initiative is backed by a government support package of BDT 5,000 crore, designed to facilitate the liquidation process of the selected institutions. Bangladesh Bank Governor Ahsan Homanur confirmed the decision, emphasising the distinction between individual and institutional depositors.
Under the recently enacted Bank Resolution Ordinance 2025, the central bank has already initiated liquidation procedures for the nine NBFIs. These steps were deemed necessary due to the institutions’ deteriorating financial health, primarily caused by rising loan defaults. While individual depositors are guaranteed full recovery of their principal, institutional depositors will be dependent solely on the proceeds generated from asset sales.
Governor Homanur stated, “Individual depositors will receive their principal amounts in full. No interest will be provided. Institutional depositors will recover only what is realised from asset liquidation.”
For each institution, Bangladesh Bank will appoint a liquidator tasked with assessing assets, liabilities, loans, properties, and recoverable investments. Proceeds will then be distributed proportionally among creditors. “For instance,” the governor elaborated, “if BDT 50 is recoverable from a total liability of BDT 100, institutional depositors will receive BDT 50.”
The nine NBFIs selected for liquidation are listed below:
| Serial | Institution Name | Current Status |
|---|---|---|
| 1 | FAS Finance | Show-cause notice issued |
| 2 | Bangladesh Industrial Finance Company (BIFC) | Show-cause notice issued |
| 3 | Premier Leasing | Show-cause notice issued |
| 4 | Fareast Finance | Show-cause notice issued |
| 5 | GSP Finance | Show-cause notice issued |
| 6 | Prime Finance | Show-cause notice issued |
| 7 | Aviva Finance | Show-cause notice issued |
| 8 | People’s Leasing | Show-cause notice issued |
| 9 | International Leasing | Show-cause notice issued |
Earlier in January 2025, Bangladesh Bank had identified a total of 20 NBFIs as financially vulnerable. The nine institutions selected for this round were chosen to limit government exposure to the BDT 5,000 crore support package.
Currently, the country’s deposit insurance scheme covers individual depositors up to BDT 200,000. The revised ordinance now extends this coverage to NBFIs, which have yet to contribute to the fund. Consequently, the government has decided to directly protect individual depositors in this initial phase. From this year onwards, all NBFIs will be required to contribute to the deposit insurance fund, ensuring parity in depositor protection across banks and NBFIs.
Governor Homanur confirmed that the liquidation process is underway. Show-cause notices have been issued to all nine institutions, providing them the opportunity to respond. If satisfactory explanations are not received, the institutions will be formally declared insolvent, and liquidators will be appointed. The central bank’s assessment indicates limited prospects for restructuring, restricting recovery opportunities for institutional creditors.