Bangladesh Bank (BB) yesterday refused to extend the deadline for non-bank financial institutions (NBFIs) to raise their capital base to a minimum of Tk 100 crore.

In a notice last year, the central bank asked the NBFIs to raise their paid-up capital to at least Tk 100 crore by June 30 this year from Tk 50 crore to minimise risks.

Of the 31 NBFIs operating in the country, five companies -- IIDFC, Fareast Finance, Hajj Finance, Reliance Finance and National Finance -- have asked the central bank for a time extension.

“There is no scope for the time extension. They failed to raise the capital despite repeated requests,” said SK Sur Chowdhury, deputy governor of the central bank.

“One year is enough time to raise paid-up capital,” said BB Governor Atiur Rahman.

“I hope the financial institutions which are yet to raise the capital to Tk 100 crore will do so by the deadline,” said Rahman, citing examples of banks that have raised their paid-up capital to Tk 400 crore in time.

The central bank advised the NBFIs to float initial public offers, issue rights or bonus shares to mobilise funds required to take their paid-up capital to the new floor.

The NBFIs, however, find it difficult to raise capital and pointed to the heavy-handed approach of the Securities and Exchange Commission (SEC) in approving their proposals.

“Fareast Finance submitted its IPO proposal two months ago, but the SEC is yet to tell the company when the clearance will be given,” said Asad Khan, president of Bangladesh Leasing and Finance Companies Association.

There are rights shares proposals of other NBFIs pending with the SEC, said Khan, also managing director of Prime Finance.

Twenty-two NBFIs are listed on the stock exchanges.

The Daily Star/ Bangladesh/ 30th May 2012