Bangladesh Bank plans phased refunds for depositors of four troubled finance firms

Bangladesh Bank is preparing a plan to return deposits to customers of four troubled non-bank financial institutions, with a detailed repayment scheme expected to be announced this week.

The institutions—People's Leasing (Abiba), Fareast Finance, FAS Finance and International Leasing—have been hit by years of financial irregularities and alleged embezzlement. As part of the liquidation process, Bangladesh Bank has already appointed administrators to oversee their affairs.

According to officials familiar with the process, the central bank will finalise the deposit repayment framework this week. Disbursements will begin in phases once the government approves the plan and releases the funds required to implement it.

Bangladesh Bank spokesperson Arif Hossain Khan said the framework would broadly follow the approach used for depositors of five troubled banks, while being tailored to the circumstances of the four finance companies.

Under the proposed structure, individual depositors with savings of up to Tk10 lakh would receive their deposits in full. Those with deposits of up to Tk20 lakh would initially receive 90 per cent, while depositors with up to Tk 30 lakh would receive 85 per cent in the first phase.

The initial repayment ratio would gradually decline as the size of deposits increases. The final scheme will specify how much each category of depositor will receive initially, when outstanding amounts will be paid and the overall timeline for completing the repayments.

Khan said the scheme would provide a clear roadmap covering both full and partial repayments, including the schedule for disbursing any remaining balances.

Economist MK Mujeri, former director general of the Bangladesh Institute of Development Studies (BIDS), welcomed the initiative, saying protecting depositors and returning their savings should be a priority. He also called for the troubled institutions to be liquidated efficiently after ensuring that depositors’ claims are addressed.

The repayment plan will initially focus on individual depositors. Claims involving institutional depositors will be considered after the assets of the four companies are assessed and the liquidation process is completed.