The Bangladesh Bank has granted permission to financially stable non-bank financial institutions (NBFIs) to accept deposits exceeding the legal limit of Tk 50 lakh for individual depositors. In a recent circular, the central bank outlined that NBFIs meeting stringent performance standards are now authorized to receive deposits surpassing the prescribed threshold for both individual and joint accounts.
Under the Finance Company Act 2023, deposits are capped at Tk 50 lakh for individuals and Tk 1 crore for joint accounts. However, the Bangladesh Bank has introduced a performance-based exemption for institutions exhibiting robust financial health and governance.
According to the circular, a finance company must satisfy three criteria simultaneously to be eligible. These include maintaining a classified loan ratio of 10 percent or lower, along with a capital adequacy ratio of at least 10 percent based on the most recent quarterly data. Additionally, the company must not have utilized any provision deferral facility provided by regulatory authorities.
Furthermore, the circular clarified the treatment of deposits that exceed the legal limits. Deposits collected prior to the enactment of the Finance Company Act 2023 can remain until maturity. Upon maturity, they may be renewed with the written consent of the account holder.
The central bank emphasized that these new guidelines do not extend to finance companies already under legal or regulatory constraints regarding deposit collection. Any previous court or Bangladesh Bank rulings restricting a finance company from accepting deposits will continue to be enforced. The directives outlined in the circular, issued under Section 24(2) of the Finance Company Act 2023, are now in immediate effect.
