The central bank asks non-banking financial institutions (NBFIs) not to write off the defaulted loans swindled by scammers until the settlement of legal disputes, officials say.
All the NBFIs have been instructed to file lawsuits against the scamsters who siphoned off the funds in the name of taking loans using non-existent companies.
A Bangladesh Bank (BB) disclosed this in a notification on Tuesday.
The latest move came against the backdrop that some NBFIs have made initiatives to write off classified loans received by the swindlers.
"We've found that some NBFIs had already taken measures to write off such loans from their books," a senior BB official tells the FE while replying to a query.
He further says that such loans must not be written off until the settlement of legal disputes.
"We've taken the latest move to ensure credit discipline in the sector," the central banker says while explaining the crux of the notification.
Under the current rules, the NBFIs can write off the defaulted loans, which have remained in the bad category of non-performing loans (NPLs) for at least three years.
Before making any final decision in this regard, the NBFI management has to ensure cent-percent provisioning against the amount to be written off.
Although loan write-off is a global practice, it depends on the capability of the bank or NBFI concerned to write off its loans.
In 2003, the central bank introduced a guideline for writing off classified loans to improve the loan-recovery situation and make financial statements of banks more transparent and accountable.
Some NBFIs are now facing problems as large-scale scams have been committed in recent years mainly due to the lack of corporate governance, industry insiders say.
PK Halder, who was arrested in India last month, is one of the individuals responsible for the ongoing vulnerable situation of the NBFI sector.
The former managing director of NRB Global Bank and Reliance Finance Limited allegedly embezzled over Tk 35 billion from four NBFIs, creating a haphazard situation for the entire NBFI sector.
Currently, 35 NBFIs are in operation in Bangladesh.
