Tuesday, August 20, 2019 | ePaper
Intensify surveillance to check activities of NBFIs
The NBFIs, also known as leasing companies, advertise to convince the investors about payment of higher interest although it contradicts with the modus operandi of the companies monitored by the BB. Another major allegation against the NBFIs is that they are trying to lure the investors with commitment of high interest rate in messages through mobile phones. As many clients complain to the elected representatives and high government officials against the NBFIs, the Finance Ministry issued the directive to the 35 NBFIs operating in the country. As per the statute, the leasing companies cannot issue cheques, pay orders or demand drafts and cannot receive demand deposits and get involved in foreign exchange financing, but some NBFIs often violate the regulation. In 2017, Bangladesh Bank detected corruption and loan irregularities by board members pushed First Finance Limited, a non-bank financial institution, towards the brink of insolvency. In 2015, the central bank removed five directors of People Leasing on charge of financial corruption and formed a new board of the company that suffered loss of over Tk 1,000 crore in that year putting its depositors at risk.
Though the NBFIs have very little share in the financial market against banks, which is in a severe condition in terms of corporate governance and good practice, the warning would straighten the NBFIs. We hope the authorities concerned will instill good practice in financial sector and would bring all culprits, involving in loan scams and corruption, under laws.