NBFIs to submit info to BB on large loans

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Siddique Islam The central bank has asked the non-banking financial institutions (NBFIs) to submit their respective statements of large loans or lease facilities to its department concerned on quarterly basis, officials said. Under new provisions, a loan or a lease sanctioned to any individual or business entity or business group amounting to 15 per cent or more of the total capital of an NBFI will be considered as a large loan. "We've taken the latest move with a view to minimising the credit risk of the NBFIs through diversifying the exposure of their loan portfolios," a senior official of the Bangladesh Bank (BB) told the FE. He also said the NBFIs will have to maintain provisions against large loans like the commercial banks to ensure discipline in the country's financial sector. The central bank has issued a circular in this connection recently and asked chief executives and managing directors of all NBFIs to comply with the new directives on large loans or leases properly. All types of direct and indirect loans or lease facilities will be considered while calculating the large loans or leases. But all types of indirect loans or leases will be calculated as 50 per cent of credit equivalent, according to the circular. "The NBFIs will have to submit the statements on large loans in specified format to the BB's Department of Financial Institutions and Markets within 15 days after the end of the respective quarter," another central banker said. For the disbursed loans or leases that exceed the limit, the NBFIs are allowed to take necessary steps to bring down the loan or lease amounts within the specified timeframe, he added. He also said the NBFIs concerned may, if necessary, arrange partaking with other financial institutions to comply with the rules. Currently, 30 NBFIs are running their business in the country. "We'll comply with the large loan or lease provisions in line with the BB's requirements," Managing Director of the Industrial and Infrastructure Development Finance Company Limited (IIFDC) Assaduzzaman Khan told the FE.