Staff Correspondent: The Bangladesh Bank asked non-bank financial institutions to release approved loans to bank accounts owned by genuine borrowers.
Some NBFIs have recently credited funds to the accounts held by other persons or entities who have not applied for the loan, flouting rules, according to a central bank notice.
As per the Integrated Risk Management Guidelines for Financial Institutions-2016, the NBFIs have to disburse the loans to the borrowers’ accounts.
Still, some NBFIs have breached the rules in recent years, the notice said.
Such a practice has already created a wide range of corruptions at some NBFIs, paving the way for scamsters to swindle a huge amount of money through fraudulent means, a BB official said.
For instance, the central bank unearthed that Proshanta Kumar Halder, popularly known as PK Halder, and his accomplices had used the same tricks to embezzle thousands of crores of taka from four NBFIs.
The financial health of the NBFIs – International Leasing & Financial Services Ltd, FAS Finance, Peoples’ Leasing, and Reliance Finance – is in dire straits due to the scams.
In another move, the central bank asked NBFIs to collect audit reports prepared by chartered accountant firms before approving loans or renewing the existing ones.
NBFIs will have to give out loans based on the audit reports.
The instruction came as many companies submit management audit reports or review reports instead of the actual audit reports prepared by the chartered accountant firms.
“The practice has created an impediment to ensuring credit discipline in the NBFI sector, which has pushed up default loans as well,” the notice said.
NBFIs will also have to preserve the audit reports with the credit register of the companies.
The lenders also will have to verify the audit reports using the document verification system (DVS) of the Institute of Chartered Accountants of Bangladesh (ICAB).
The ICAB has developed the DVS, a piece of software that aims to prevent unruly firms from submitting falsified or multiple audited financial statements to the National Board of Revenue, banks, and NBFIs.
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