Bangladesh Bank yesterday ordered non-banking financial institutions (NBFIs) not to disburse loans using checks from current accounts which they must maintain with the central bank.
The Bangladesh Financial Intelligence Unit (BFIU) and the Anti-Corruption Commission (ACC) have discovered that the checks were used in some of the major scams perpetrated in the NBFI sector, central bank officials said.
Each NBFI must have a current account with the central bank to maintain its cash reserve ratio and statutory liquidity ratio.
NBFIs are allowed to use checks when they want to withdraw funds from the central bank or settle interbank loans or debts such as call money.
Some delinquent NBFIs used the checks to make loans to crooks so that no suspicions arose among watchdogs, a BB official said.
Usually, no issues are raised when current account checks with the central bank are placed for withdrawal or transfer of funds.
Checks allowed scammers to seamlessly withdraw funds from banks.
And that’s what the crooks capitalized on to siphon off funds, dug up the BFIU and the ACC.
And that prompted the central bank to send letters to all NBFIs prohibiting them from disbursing loans using BB current account checks.
Prashanta Kumar Halder also known as PK Halder defrauded large sum of money from four NBFIs using BB checks.
Halder, a former managing director of NRB Global Bank and Reliance Finance who lives in Canada after fleeing Bangladesh, is one of those responsible for the current vulnerable situation in the NBFI sector.
He and his associates embezzled around Tk 4,000-5,000 crore from four NBFIs – International Leasing and Financial Services, FAS Finance & Investment, People’s Leasing and Financial Services and Reliance Finance.
Victim of scams in recent years, many NBFIs are now unable to repay depositors despite their funds coming due.
Non-performing loans in the country’s 34 NBFIs stood at Tk 11,757 crore in September last year, up 17% year-on-year, according to BB data.