Default loans in Bangladesh’s non-bank financial institutions (NBFIs) have risen sharply, reaching about Tk 29,409 crore by the end of September last year, accounting for over 37 percent of total loans. Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan confirmed the figures. The central bank’s report shows that total loans in the sector increased to Tk 79,251 crore in September from Tk 77,092 crore in June, while defaults grew by Tk 1,868 crore during the same period.

Sector insiders attribute the ongoing crisis to long-standing irregularities and fund misappropriation in several institutions, particularly those linked to PK Halder. Bangladesh Bank has issued notices to 20 NBFIs for failing to repay deposits and plans to close nine of them, including FAS Finance, Bangladesh Industrial Finance Company, and People’s Leasing. These nine hold about 55 percent of total default loans in the sector.

Governor Ahsan H. Mansur announced that individual depositors of the nine institutions will receive their principal amounts before Ramadan in February. The government has verbally approved Tk 5,000 crore to facilitate repayments, though no interest will be paid.