The central bank has taken the initiative to close down nine non-bank financial institutions that are in dire straits. These institutions have been identified based on three indicators - inability to repay depositors, high defaulted loans and capital shortage.

Earlier, in May, Bangladesh Bank issued notices asking why the licenses of 20 financial institutions in bad shape should not be canceled. After not receiving a satisfactory response, the final decision was made to cancel the licenses of 9 institutions. It is reported that the government will need 9,000 crore taka to liquidate these institutions.

The institutions that have taken the initiative to close are People's Leasing and Financial Services, International Leasing and Financial Services, Aviva Finance, FAS Finance and Investment, Fareast Finance and Investment, Bangladesh Industrial Finance Company, Premier Leasing and Finance, GSP Finance Company and Prime Finance and Investment Limited. Yesterday, with the consent of the Governor, information was sent to the Resolution Department of Bangladesh Bank to take necessary measures to liquidate these institutions. In case of liquidation, the money of small depositors will be returned. It is reported that all kinds of facilities will be provided to the working employees as per the employment rules.

Among the institutions, FAS Finance has defaulted on 1,814 crore taka or 99.93 percent of its total loans. The cumulative loss is 1,719 crore taka. Fareast Finance has defaulted on 98 percent of its loans. In addition, the loss is 1,170 crore taka. BIFC has defaulted on 97.30 percent of its loans and lost 1,480 crore taka. International Leasing has defaulted on 96 percent of its loans of 3,975 crore taka. The cumulative loss is 4,219 crore taka. People's Leasing has defaulted on 95 percent, lost 4,628 crore taka. Aviva Finance has defaulted on 2,430 crore taka or 83 percent. The loss is 3,803 crore taka. Premier Leasing has defaulted on 984 crore taka or 75 percent, lost 941 crore taka. GSP Finance has defaulted Tk 515 crore or 59 percent, and has incurred losses of Tk 339 crore. In addition, Prime Finance has defaulted Tk 534 crore or 78 percent. Cumulative losses are Tk 351 crore.

The central bank formed a committee in January to prepare a review report on financial institutions. The committee identified 20 institutions based on various indicators of 35 financial institutions licensed by the central bank, assessing the actual status of loans, reviewing the liquidity situation and the amount of assets and liabilities. Other troubled institutions are Union Capital, First Finance, Phoenix Finance and Investment, Uttara Finance and Investment, Industrial and Infrastructure Development Finance, National Finance, Hajj Finance Company, Meridian Finance and Investment, Islamic Finance and Investment, Bay Leasing and Investment and CVC Finance.