2019-07-11 16:45:40 BdST
People's Leasing depositors to get back money: BB
The central bank said as a regulator it will not shoulder the responsibility of failure on the part of the People's Leasing and Financial Services Ltd (PLFSL), which is now facing liquidation.
"Liquidation is the last stage under the financial institutions act. We took all other steps earlier to avoid its liquidation," executive director of the Bangladesh Bank (BB) Shah Alam told a press conference in the capital on Wednesday.
He, however, assured that the depositors will get back their money soon, and appropriate steps in this regard are underway.
Asked whether the leasing company could have been saved from winding up by appointing an administrator, and whether as a regulator BB has failed in this case, he answered in the negative.
Mr Alam said compared with the banks, the non-bank financial institutions (NBFIs) as an industry is not a big one, and their exposure is also limited.
"Our observer played an important role in the PLFSL. We tried to bring new investors to the company and tried for any good company to take it over."
"That could have been the only way to save the interest of depositors, and help the company to avoid liquidation."
Both officials of the BB and the company jointly tried to do it, he said.
Mr Alam also said the depositors have nothing to be worried about getting back their money. The company has assets worth Tk 32.39 billion, while the amount of its total deposit is Tk 20.36 billion.
He said the BB got allegations of irregularities in the PLFSL in 2014, and conducted a special inspection after that. The BB team found that some directors of the company were illegally taking loans from it.
Later, the board of directors of the PLFSL was dissolved, he added.
"We tried to recover the money from the directors who took loans from the company. The BB took measures against them, who were involved in the irregularities in line with the relevant laws."
Mr Alam also assured depositors of the country's rest 32 NBFIs, saying the central bank has been working relentlessly to protect their interest. "Depositors of other companies have nothing to be worried about."
Asked how long the PLFSL depositors will have to wait to get back their money, he said the BB will try to refund their money 'as soon as possible'.
When asked as to how the money will be given back if the value of the company's assets is found to be lower than what it owes to the depositors, Mr Alam said the BB will follow the relevant laws.
He, however, said steps will be taken, so that small investors can get back their money first.
The Ministry of Finance in a letter to the central bank on June 27 gave its nod for winding up the
PLFSL, considering its fragile financial condition and for protecting the interest of depositors.
The BB will soon appoint a liquidator for the company through the High Court to complete the process.
The central bank's spokesperson Serajul Islam also spoke at the press conference.
Unauthorized use or reproduction of The Finance Today content for commercial purposes is strictly prohibited.