The Bangladesh Bank has announced to liquidate People’s Leasing and Financial Services (PLFS) as its financial condition deteriorated significantly in recent years.
Flanked by senior PLSF officials, Bangladesh Bank Executive Director Md Sirajul Islam made the announcement on Wednesday (Jul 10) at press conference.
Urging depositors not to panic, he said, “PLSF’s assets are valued at Tk 32.39 billion against the Tk 20.36 billion deposits by clients. So, it would not be a problem.”
The media call was told that a liquidator will be appointed soon and the depositors will be paid off as soon as possible in line with the court’s order.
“Bangladesh Bank will do everything necessary to protect the interest of depositors. There’s no reason to be panicked” said the central bank official.
PLFS has failed to repay the depositors’ money despite maturity of the funds, found a Bangladesh Bank report. Default loans and net losses have recently escalated as well.
It will be the first financial institution in Bangladesh to be liquidated in line with the Financial Institutions Act, 1993.
Liquidation of PLFS means closing its operations permanently and the government will take actions to settle liabilities by selling off its assets. But the central bank as the regulator has to take approval from the High Court before liquidation.
Previously, two banks — Bank of Credit and Commerce International and Oriental Bank — that were on their last legs were restructured but not liquidated.