13 NBFIs miss BB deadline to raise paid-up capitalAKM Zamir Uddin
At least 13 non-banking financial institutions failed to raise their minimum paid-up capital to Tk 100 from Tk 50 crore within the deadline set by the Bangladesh Bank, the central bank officials 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 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, Reliance Finance, Agrani SME Financing and Bangladesh Infrastructure Finance Fund.
There are some 31 NBFIs operating in the country.
Asad Khan, president of the Bangladesh Leasing and Finance Companies Association, told New Age that some companies failed to increase paid-up capital within the timeframe due to some unavoidable reasons.
He said, ‘We recently held a meeting of the managing directors and chief executive officers of NBFIs in which the BLFCA decided to request the BB to extend the deadline for raising the paid-up capital.’
But the central bank informed that the deadline would not be expanded, he said.
Under the circumstances, the BLFCA demanded that the BB should take measures on the basis of one-to-one discussion with the respective NBFIs.
Asad Khan, who is also MD of Prime Finance, said the central bank had earlier suggested that the NBFIs, which would fail to increase the paid-up capital within the BB deadline, could go for floating initial public offering in the capital market to raise their capital.
Some NBFIs failed to issue the IPO as they are yet to be listed with the capital market, he said.
He said, ‘We have been informed that the Securities and Exchange Commission is not giving IPO approval due to the prevailing weak condition of the capital market.’
Moreover, the existing liquidity crisis also hit the NBFIs, he claimed.
He, however, said the defaulting companies would try to raise their paid-up capital as early as possible.
As the regulatory body, Bangladesh Bank should consider the difficulties and limitations of the NBFIs, he added.
A BB official said that the central bank would take measures against the companies which failed to raise their paid-up capital within the deadline.
The BB will not take measures against the Agrani SME Financing and Bangladesh Infrastructure Finance Fund as they have recently started their operation, he said.
The central bank will issue show cause letters to the failed companies, he added.
He said, ‘We will not take any decision grossly against the failed companies. The central bank will reconsider the problems of the companies which will show appropriate reasons in this regard.’
He said the central bank would impose penalty against the companies which neglected the BB directives.
Another BB official said some NBFIs had already applied to the central bank requesting to extend the timeframe for raising their paid-up capital.
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