NBFIs are requested to properly preserve loan and investment documents

TBS Report

May 29, 2022, 7:55 PM

Last modification: May 29, 2022, 8:16 PM

Bangladesh Bank file photo: Salahuddin Ahmed/TBS


Bangladesh Bank file photo: Salahuddin Ahmed/TBS

According to a Bangladesh Bank circular, Non-Banking Financial Institutions (NBFIs) have been advised to properly retain loan, lease or investment documents as some recent investigations of financial irregularities revealed that the documents were missing.

As some financial institutions do not keep records properly, many problems have arisen in taking legal action for loan recovery and investigating loan and investment anomalies, the circular says. published on Sunday.

However, a central bank source said the central bank gave the instruction not to obtain loan documents when investigating the Bangladesh Industrial Finance Company (BIFC).

The authorities assume that other NBFIs could also have disappeared by lending their documents which are proof of their financial misdeeds, said a senior official of Bangladesh Bank, adding that the circular aims to bring discipline in the non-financial sector. banking.

The circular says that a copy of the memorandum presented before the board meeting – which contains loan, lease and investment details, loan appraisal reports, approval, renewal, rescheduling or restructuring and delisting – must be kept with a copy with the decisions of the meeting. . But if the loan or investment is more than Tk 50 crore, the documents will need to be stored at an alternative branch or at the head office.

The central bank said the documents can also be stored digitally after ensuring cybersecurity and regularly updating the database. In addition, each institution will have to form a cybersecurity management team to regularly report to the board on the overall status of ICT security and system backup.

In addition to this, the central bank said that the ledger must be updated at the end of each working day and the backup of the database must be stored properly.

According to the central bank, a report on the retention of the document must be submitted to the managing director of the institution after conducting an internal inspection once every three months.

If any irregularity is found during the internal inspection, the Managing Director informs the Bangladesh Bank within seven working days of submission of the report.

Another senior Bangladesh Bank official told The Business Standard that many NBFI managing directors often claim that their previous senior officials did not properly keep records.

“Due to the unavailability of data, we are not getting a full picture on the institutions. We believe that their missing document claim is aimed at concealing loan and investment data. The new circular will deter them from doing such apologies,” the official added.

Comments are closed.