Bangladesh Bank Declares Four NBFIs Non-Viable: Boards Dissolved, Resolution Process Begins

Dhaka, August 10, 2026 — Bangladesh Bank has declared four non-bank financial institutions (NBFIs) non-viable and initiated the formal resolution process under the Bank Resolution Act — dissolving their boards of directors, cancelling the appointments of their chief executive officers, and appointing administrators to oversee the orderly wind-down of their operations in the most significant enforcement action against troubled financial institutions since the political transition of August 2024.

🏛️ The Four Non-Viable NBFIs

According to a press release issued on August 9, the four institutions declared non-viable are:

• 📜 Aviva Finance Limited (not listed on DSE)
• 📜 Fareast Finance and Investment Limited (DSE-listed)
• 📜 FAS Finance and Investment Limited (DSE-listed)
• 📜 International Leasing and Financial Services Limited (DSE-listed)

The central bank said it took the decision to restore good governance and accountability in the financial sector, protect the interests of depositors and other creditors, and rebuild public confidence in the sector — objectives that align with the broader banking reform agenda that has seen the central bank's governor disclose that 36 percent of total loans across the banking system are non-performing.

⚖️ Boards Dissolved, CEOs Removed

Following the declaration of the institutions as non-viable and their inclusion under the Bank Resolution Act, Bangladesh Bank exercised powers granted to it under the law to:

• 🗑️ Dissolve the boards of directors of all four institutions
• 🗑️ Cancel the appointments of their chief executive officers
• 👥 Appoint administrators (Bangladesh Bank officials) to oversee the resolution process
• 👥 Appoint associate administrators to assist with the management and resolution activities

The administrators will be responsible for overseeing the administration, management, and resolution activities of the respective institutions — including assessing their financial condition, preparing resolution plans, and determining whether the institutions can be restructured, merged, or wound up through liquidation.

📊 Why They Were Declared Non-Viable

The decision was taken following a review of the institutions' financial strength and prospects for recovery, based on a decision of the Bangladesh Bank board. According to the central bank, the key reasons for declaring the four NBFIs non-viable include:

• 📉 Large capital shortfalls — the institutions do not have sufficient capital to absorb their losses
• 📉 High levels of classified loans and investments — a significant portion of their assets are non-performing
• 📉 Failure to maintain adequate liquidity — they cannot meet their short-term obligations
• 📉 Deteriorating earning capacity — their revenue streams have collapsed
• 📉 Inability to repay liabilities owed to depositors and creditors

💹 DSE Suspends Trading in 3 Listed NBFIs

Following the central bank's declaration, the Dhaka Stock Exchange (DSE) suspended trading in shares of the three listed NBFIs — Fareast Finance, FAS Finance, and International Leasing. The suspension prevents further trading in their shares until the resolution process is completed and their fate (restructuring, merger, or liquidation) is determined.

The suspension is a standard regulatory response when a financial institution enters resolution — it protects investors from trading in securities whose value is fundamentally uncertain while the resolution process unfolds. The DSE and the Bangladesh Securities and Exchange Commission (BSEC) will determine the final delisting timeline based on the outcome of the resolution process.

🏛️ Connection to Broader Banking Reform

The declaration of the four NBFIs as non-viable is the latest in a series of aggressive regulatory actions taken by Bangladesh Bank under the Bank Resolution Act 2026. Earlier this month, the central bank issued the "Regulations for Temporary Administration under the Bank Resolution Act, 2026" — giving temporary administrators sweeping powers to replace management, conduct forensic audits, and take legal action against directors suspected of financial crimes.

The four NBFIs join a growing list of financial institutions under central bank intervention:

• 🏢 5 merged Islamic banks (now operating as Sammilito Islami Bank under BB-appointed management)
• 🏢 ICB Islami Bank (continues under BB administrator)
• 🏢 11 troubled banks (selected for Asset Quality Reviews by international audit firms from January 2027)
• 🏢 4 NBFIs (now declared non-viable — this announcement)

💬 What Happens to Depositors?

Bangladesh Bank expressed hope that the move would help restore discipline and good governance in the financial sector and protect the interests of depositors and other stakeholders. The administrators appointed to oversee the resolution process will be responsible for ensuring that depositor interests are safeguarded throughout the process — whether through continued operations (if restructuring is possible), transfer of deposits to a healthier institution, or payout from available assets.

For the NBFIs' depositors and creditors, the resolution process will be a period of uncertainty. The administrators will need to assess the institutions' actual financial condition (which may be worse than reported), identify recoverable assets, and determine the most effective resolution option — whether that means restructuring with new capital, merger with a stronger institution, or liquidation with proportional payouts to creditors.

🌏 Macro Implications

The declaration of four NBFIs as non-viable sends a strong signal to the financial sector that Bangladesh Bank is prepared to use its full regulatory toolkit — not just for banks, but for non-bank financial institutions as well. The NBFI sector in Bangladesh has long been a source of concern for regulators, with many institutions suffering from weak governance, related-party lending, and capital erosion that mirrors the problems seen in the banking sector.

The action also aligns with the broader reform agenda that includes the 18-month NPL action plan targeting the 36 percent system-wide NPL ratio, the Tk 60,000 crore private sector credit stimulus scheduled for September, and the ongoing Asset Quality Reviews by Ernst & Young and KPMG. Together, these measures represent the most comprehensive financial sector cleanup in Bangladesh's history — one that will determine whether the country can restore depositor confidence and attract the foreign investment needed for post-LDC graduation economic growth.

✅ What Comes Next

The administrators will submit their initial assessment of the four NBFIs' financial condition within the timelines specified under the Bank Resolution Act regulations. Based on this assessment, they will recommend the most effective resolution option for each institution — restructuring, merger, or liquidation. For the DSE-listed entities, the BSEC will determine the final delisting timeline. For depositors, the central bank has promised that their interests will be protected — though the extent of any potential losses will depend on the actual financial condition revealed by the administrators' audit.