NBFI and Finance Company Licence in Bangladesh: Step-by-Step Process (2026)

NBFI license Bangladesh: the 2026 framework under the Finance Company Act 2023

An NBFI license Bangladesh Bank grants is one of the hardest financial-sector permissions to obtain in the country, and in 2026 it is also one of the most closely watched. Since the Finance Company Act 2023 replaced the Financial Institutions Act 1993, a non-bank lender, leasing company or term-deposit taker is a "finance company", licensed under section 4 and supervised by a Bangladesh Bank department that, from June 2026, carries that name. Sponsors who once treated a finance company as a family-controlled funding vehicle now face hard shareholding caps, statutory fit and proper tests and a regulator that has spent two years closing failed institutions.

This guide explains the licence end to end: who needs one, the minimum paid-up capital and how it is assessed, sponsor eligibility, the shareholding and board rules, the application and formation process, foreign ownership, the prudential requirements that apply from the first day of business, and the 2025 to 2026 programme that took weak NBFIs into liquidation. Where our existing guides already cover a neighbouring subject, such as bank resolution, money laundering controls or loan recovery, we link to them rather than repeat them.

Summary: A finance company in Bangladesh cannot carry on financing business without a Bangladesh Bank licence under section 4 of the Finance Company Act 2023. The regulator tests financial condition, management, capital adequacy, the objects clause and the public interest; requires minimum paid-up capital of Tk 100 crore under the saved 1994 regulations; caps any person or family at 15 per cent; and applies statutory fit and proper tests to every director and chief executive.

Key point: The licence is only the start. A finance company that fails to begin business within six months of licensing, runs below its minimum capital or harms depositors can lose its licence under section 7, and since 2025 Bangladesh Bank has shown it will use its resolution and liquidation powers against failed NBFIs.

At a glance

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Table of Contents

What an NBFI license Bangladesh Bank issues actually permits

The Finance Company Act 2023 (Act No. 59 of 2023) received assent on 13 November 2023 and came into force immediately. It repealed the Financial Institutions Act 1993 and re-enacted the regime with stronger licensing, governance and resolution provisions.[1] The market still uses "NBFI" and "financial institution", but the statutory term is now "finance company": a company licensed by Bangladesh Bank under section 4.

Section 2 defines "financing business" as accepting term deposits that are not repayable on demand, lending, investment and lease financing, together with the activities listed in section 21. Section 21 adds development finance for public projects, investment in securities issued for structured finance, portfolio investment in government and listed securities, mobile financial services through a subsidiary, and any other business Bangladesh Bank prescribes.[1]

What a finance company cannot do

The limits matter as much as the permissions. Section 22 bars dealing in gold or foreign currency and any business not authorised by the Act. Section 21(2) prevents a finance company from acting directly as a stock broker, stock dealer, merchant banker or portfolio manager, or carrying on any business that needs registration with the Bangladesh Securities and Exchange Commission. Trustee and custodian work, with BSEC registration, is the exception.[1] Capital-markets ambitions therefore have to be structured through a subsidiary, which itself needs prior Bangladesh Bank approval under section 27. Our guide to securities law in Bangladesh covers the BSEC side of that structure.

Who needs a licence

Section 4(1) is categorical: no company may carry on financing business in Bangladesh without a Bangladesh Bank licence. Section 4(6) also bars an unlicensed entity from using the word "finance" in its name in a way that suggests it is a finance company, with exceptions for a licensed company's subsidiaries and industry associations.[1] Chapter 7 gives Bangladesh Bank powers to call for information on unlicensed financing businesses, make declarations against them, control the assets of those involved and wind them up. Anyone taking public money on a term basis outside a bank, a cooperative or a microcredit licence should assume the Act applies.

Finance companies sit alongside, not inside, the bank company regime; our overview of banking law in Bangladesh maps the wider statutes. This guide concentrates on what a sponsor needs to obtain and keep an NBFI license Bangladesh Bank will accept as sound.

Licensing criteria under section 4 of the Finance Company Act

Section 4(2) requires a written application to Bangladesh Bank in the form prescribed under the Act. Before granting a licence, section 4(3) requires Bangladesh Bank to be satisfied on five matters: the applicant's financial condition; the character of its management; the adequacy of its capital, its structural soundness and its earning prospects; the objects in its memorandum of association; and the public interest.[1]

These are discretionary tests, and the statute sets no deadline for a decision. The public-interest limb in particular gives the regulator room to refuse a technically complete application if it judges the market does not need another lender or the sponsor group is unsuitable. Bangladesh Bank's own circular register shows how sparingly it has used the power: only a handful of new licences were announced between 2015 and 2023, the most recent being Nagad Finance PLC in May 2023, which surrendered its licence in August 2023.[2]

Conditions attached to the licence

Under section 4(4) Bangladesh Bank may impose any condition it considers appropriate when granting a licence, and under section 4(5) it may add, remove or amend conditions at any time.[1] Breach of a licence condition is itself a ground for cancellation under section 7.

Branches and business centres

Section 6 requires Bangladesh Bank's prior written approval to open a new business centre, branch or booth inside or outside Bangladesh, or to relocate an existing one, and the same section 4(3) criteria apply to that decision.[1] In May 2025 Bangladesh Bank issued a fresh policy on the establishment, expansion, relocation and leasing of finance companies' business centres.[2] The business plan should show a staged branch strategy.

Minimum paid-up capital for an NBFI license Bangladesh applicants seek

The Finance Company Act does not fix a capital figure on its face. Section 8 requires every finance company to maintain capital and statutory reserves in the amount, at the rate and in the manner Bangladesh Bank prescribes, and section 67 empowers Bangladesh Bank to make regulations on licensing and capital.[1] Until new regulations replace them, section 70(2) keeps in force regulations and notifications made under the 1993 Act, so far as they are consistent with the new statute.[1]

The Tk 100 crore floor

The operative figure comes from a notification of 24 July 2011 that amended regulation 4 of the Financial Institutions Regulations 1994. For a company registered in Bangladesh, minimum paid-up capital is Tk 100 crore, and paid-up capital plus reserves must never fall below the risk-based minimum capital Bangladesh Bank sets from time to time. A company registered outside Bangladesh must keep an equivalent amount in Bangladesh.[3] The same circular required existing institutions to cure any shortfall by 30 June 2012, allowed IPOs, rights issues or bonus shares to do so, and barred cash dividends while a shortfall persisted.[3]

Tk 100 crore is the floor, not the target. Bangladesh Bank requires a minimum capital adequacy ratio of 10 per cent, and a finance company below that ratio with default loans above 10 per cent cannot declare a dividend.[9] A lender planning rapid balance-sheet growth will hit the risk-based requirement long before it outgrows the absolute minimum, so the business plan should model capital at three and five years, not only at launch.

Checking the current figure

Section 67 allows Bangladesh Bank to issue new finance company regulations on licensing and capital at any time. We found no regulation replacing the Tk 100 crore paid-up capital floor as at October 2026, but any sponsor should confirm the figure with the Finance Company Regulation and Policy Department before fixing the capital plan and subscription documents.

Source of funds

Capital must be clean as well as sufficient. Section 10(3) allows a finance company to require every share purchaser to declare that they are not buying as a nominee or in a benami name, and section 10(4) forfeits all the declarant's shares to the government if the declaration is false.[1] Expect subscription money to be traced to tax-paid income or documented corporate funds. The anti-money laundering framework that sits behind these checks is covered in our guide to anti-money laundering law in Bangladesh.

Sponsor eligibility and shareholding limits

The 15 per cent cap

Section 10(1) prohibits concentration of shares in any person, related party or family. No person, related party or family members may, directly or indirectly, alone or jointly, buy more than 15 per cent of a finance company's shares.[1] "Family" is defined broadly to cover a spouse, parents, sons, daughters, brothers, sisters and dependants.[1] Existing holders were given two years from commencement to sell down to the cap, failing which the excess is forfeited to the government; the cap does not apply to government-owned finance companies.[1]

The practical consequence is that a new finance company needs at least seven unrelated sponsor groups to reach full subscription, and usually more, since few sponsors will want to sit at exactly 15 per cent. Sponsor agreements must be drafted so that related parties are identified and aggregated before the cap is tested, not after Bangladesh Bank raises the question.

Significant shareholders and cross-holdings

A "significant shareholder" is a person or family holding more than 5 per cent of paid-up capital.[1] Section 10(2) requires a Bangladesh Bank no-objection before anyone becomes one. A finance company may not be a significant shareholder in another finance company or a bank, and a person who is a significant shareholder of one finance company may not be a significant shareholder of another finance company or bank company.[1]

Sponsor credit history

Sponsors become directors, and directors must meet the statutory fit and proper tests described below. A sponsor who is, or whose related concern is, a defaulting borrower is disqualified from the board.[1] Bangladesh Bank's circular letter of 24 July 2025 on identifying wilful defaulters adds a further layer of screening.[2] Clearing the credit information report of every sponsor and associated company should be the first piece of diligence, not the last.

Fit and proper tests for directors and the chief executive

The fit and proper regime now sits in the statute, not only in circulars. Section 15(8) disqualifies a person from appointment as director, managing director or chief executive of a finance company if any one of seven grounds applies.[1]

• They lack the management, business or professional experience and educational qualification Bangladesh Bank prescribes.
• They have been convicted of a criminal offence.
• A government agency or Bangladesh Bank investigation report finds them involved in fraud, deception, financial crime or other illegal activity.
• They have breached the rules, regulations or codes of a financial-sector regulator.
• They are connected with a company or institution whose registration or licence has been cancelled.
• They, or a related concern, are a defaulting borrower.
• They have been declared bankrupt by a competent court.

The fifth ground matters in 2026: a person who sat on the board of a failed finance company may find that connection used against them.

Education and the board policy

Bangladesh Bank's board policy for finance companies, issued in February 2024 and amended by a circular letter of 16 April 2025 under section 41(2), requires every director to hold at least a bachelor's degree. Alternate directors must meet the same fit and proper standards as the director they replace, and a nominee director appointed by an institution must meet the standards that apply to independent directors.[7]

Board composition and tenure

Section 14 caps the board at 15 directors, including at least two independent directors.[1] Under section 15(1), a family holding more than 5 per cent may have no more than two directors, and a family holding between 2 and 5 per cent may have one.[1] Section 15(7) bars a director from also sitting on the board of another finance company, bank, insurer or their subsidiaries. Section 16 sets a three-year term and a maximum of three consecutive terms or nine years, after which a director must wait three years before standing again.[1]

Independent directors from a Bangladesh Bank panel

Since January 2025 independent directors have been chosen differently. Bangladesh Bank prepares a panel of eligible candidates against the statutory criteria, and finance companies appoint from that panel subject to Bangladesh Bank's no-objection. A vacancy must be reported within three working days, and Bangladesh Bank must be told at least 30 working days before an independent director's term expires. Independent directors report irregularities and dissent directly to Bangladesh Bank, and must not sign guarantees for the company's borrowings.[8]

Removal powers

Fit and proper status is tested continuously, not only at licensing. Section 19 empowers Bangladesh Bank to remove a finance company's chairman, any director or the chief executive, and section 20 allows it to supersede the board.[1] In August 2026 Bangladesh Bank went further under the resolution statute, dissolving the boards and removing the managing directors of four failing NBFIs.[13]

Step-by-step NBFI formation and the licence application

The Act sets the criteria but leaves procedure largely to Bangladesh Bank. In our experience the process for an NBFI license Bangladesh Bank will seriously consider runs through eight stages, and the early stages decide whether the later ones succeed.

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Feasibility, business model and capital plan

Start with the business case. Bangladesh Bank must be satisfied about earning prospects under section 4(3), so the application needs a credible plan that identifies target segments, funding sources and the path to profitability. The plan should explain why the market needs another finance company at a time when 35 NBFIs operate and the sector's non-performing loans stood at 37.11 per cent in September 2025.[12] A focused SME, housing or Islamic finance proposition with a clear funding strategy fares better than a generic leasing model. Sponsor structuring and fit and proper screening, covered above, should be complete before anything is filed.

Application to Bangladesh Bank

The application is made in writing to Bangladesh Bank in the prescribed form under section 4(2).[1] It should be supported by the business plan, financial projections, sponsor and director profiles, draft memorandum and articles of association, the proposed capital structure, governance and risk-management frameworks, AML and CFT policies, and IT and operational plans. The memorandum matters because its objects clause is one of the five statutory tests.

Incorporation and capital

Only a "company" registered under the Companies Act 1994 can be licensed.[1] Sponsors therefore incorporate with the Registrar of Joint Stock Companies and Firms, with an objects clause limited to financing business, and deposit the required paid-up capital. Our guide to public limited company registration in Bangladesh explains the RJSC steps; the sequencing of incorporation against the regulator's review should be agreed with Bangladesh Bank rather than assumed.

Licence and commencement

If Bangladesh Bank is satisfied, it issues the licence with any conditions it chooses under section 4(4), and section 5 provides for publication of the list of finance companies.[1] The clock then starts. Section 7(1)(c) allows cancellation if the company fails to begin financing business within six months of receiving its licence.[1] Premises, core systems, senior management and policies must therefore be ready to go live, not merely planned, when the licence arrives.

How long does it take?

The Act imposes no time limit on Bangladesh Bank's decision, and new licences have been rare. Budget for an extended review and avoid premises leases or senior hires that depend on a fixed licence date.

Foreign ownership of a finance company

The Act does not bar foreign ownership, but it hands the key decisions to Bangladesh Bank. Section 10(1) provides that the maximum shareholding of foreign persons in a finance company is to be determined by Bangladesh Bank.[1] A foreign investor should therefore treat the permitted percentage as a matter for negotiation with the regulator, confirmed in writing, rather than as a fixed rule.

Board seats for foreign shareholders

The family-based director limits in section 15(1) do not fix board seats for foreign shareholders; Bangladesh Bank does. Its circular of 20 December 2023 provides that the maximum number of directors representing foreign shareholders is set in proportion to their shareholding.[6] A joint venture agreement that promises a foreign partner board control out of proportion to its equity will not survive regulatory review.

Foreign-registered companies

Under the 2011 amendment to the 1994 regulations, a company registered outside Bangladesh that is licensed to carry on financing business must keep in Bangladesh an amount equal to the Tk 100 crore minimum, or the risk-based capital requirement if higher, in the manner Bangladesh Bank prescribes.[3]

Foreign exchange and repatriation

Foreign equity must arrive through formal banking channels and be properly documented so that dividends and sale proceeds can later be repatriated. Our guides to foreign exchange regulations in Bangladesh and capital repatriation from Bangladesh explain the inward remittance and exit rules. Investors should also note that the dividend restrictions tied to capital adequacy and default loans will affect the timing of returns.[9]

Ongoing prudential requirements after licensing

Holding an NBFI license Bangladesh Bank has granted brings continuous prudential obligations. The core rules are in the Act; the numbers are mostly in Bangladesh Bank circulars issued under sections 8, 9 and 41.

Cash reserve and liquidity

Section 9 requires every finance company to keep a cash reserve and liquid assets against its deposits and liabilities as Bangladesh Bank prescribes. Cash means unencumbered balances in current accounts with Bangladesh Bank; liquid assets include excess balances there, unencumbered treasury bills and bonds, and other assets Bangladesh Bank names.[1] Since 1 June 2020, deposit-taking finance companies must keep a cash reserve ratio of 1.5 per cent on a fortnightly average, never below 1 per cent on any day. The statutory liquidity ratio remains 5 per cent for deposit-takers and 2.5 per cent for those that do not take deposits.[4]

Deposit-taking limits

A finance company is not a bank. Section 24(1) prohibits deposits repayable on demand by cheque, draft, debit card or the depositor's order.[1] Bangladesh Bank set the minimum term of any deposit at three months in 2013, with premature encashment allowed only after that period.[5] Section 24(2) caps deposits from an individual at Tk 50 lakh in a single name and Tk 1 crore in joint names, or any other limit Bangladesh Bank sets.[1] Bangladesh Bank issued a fresh circular on individual deposit limits on 15 July 2026, so the current figure should be checked against that circular.[2]

Lending and exposure limits

Section 25 sets the lending rules. Total credit to any one person or related party may not exceed the share of paid-up capital and reserves that Bangladesh Bank fixes, and that share can never exceed 30 per cent. Unsecured loans to any individual are capped at Tk 10 lakh or another amount Bangladesh Bank sets, with separate rules for agriculture and CMSME lending. A finance company may not lend against its own shares, lend to benami or shell entities, or lend without security to its directors, their families or companies they control.[1]

Capital markets and subsidiaries

Under section 26, aggregate capital-market investment may not exceed 25 per cent of paid-up capital and reserves, and a holding in any company other than a subsidiary may not exceed 5 per cent of paid-up capital and reserves. Existing excess holdings must be brought down within five years of commencement, extendable by three years with approval. Section 27 requires prior approval to form a subsidiary, and to lend to, invest in or write off exposure to one.[1]

Capital adequacy, dividends and reporting

Capital adequacy is measured under Bangladesh Bank's prudential guidelines, with the 10 per cent minimum ratio linked to dividend restrictions.[9] Chapter 6 of the Act governs financial statements, audit, inspection and returns, and section 39 requires reporting of money laundering and suspicious transactions to Bangladesh Bank.[1] Section 41 gives Bangladesh Bank a general power to issue binding directions, which it uses for everything from loan classification to MD appointments.

Defaulters and recovery

Section 30 deals with defaulting and wilful defaulting borrowers, and a defaulting borrower is one whose overdue facility remains unpaid six months after it falls overdue under Bangladesh Bank's definition.[1] Recovery suits by finance companies are heard by the money loan courts; our guide to the Artha Rin Adalat in Bangladesh covers that process.

Comparing the key Finance Company Act thresholds

The table brings together the numbers a sponsor and its advisers will test most often. Statutory figures can only be changed by Parliament; circular figures can be changed by Bangladesh Bank at short notice.

Licence cancellation and the regulator's enforcement tools

Section 7(1) lists nine grounds on which Bangladesh Bank may cancel a licence: breach of a licence condition; false or misleading information in obtaining the licence; failure to begin business within six months; conducting business against depositors' interests; insufficient assets to meet depositor liabilities; operating below minimum capital; not carrying on the business for which the company was formed; conviction by a court; and suspending operations without permission.[1]

Before cancelling, Bangladesh Bank must record the irregularities and give the company a written notice of not more than 15 days to show cause. Cancellation is notified to the company in writing and published in the official Gazette. From publication the company may not carry on any financial transaction, though it may perform administrative work with prior approval; rights and claims of and against the company survive.[1]

Suspension, reconstruction and amalgamation

Section 49 allows Bangladesh Bank, after consulting the government, to suspend a finance company's business for six months, extendable by up to six more, in the interest of depositors or the public. During the suspension the company may not pay depositors or creditors or carry on business without approval, and Bangladesh Bank may frame a scheme to reconstruct the company or amalgamate it with another finance company or a bank company. Section 50 allows voluntary amalgamation or reconstruction with prior approval.[1]

The resolution statute

Alongside the 2023 Act sits the Bank Resolution Act 2026, which replaced the 2025 Ordinance. Section 71 of that Act provides for its application to finance companies.[14] In practice it is the statute Bangladesh Bank now uses for the hardest NBFI cases. Its tools, including temporary takeover, transfer and bridge institutions, are explained in our banking law guide.

Bangladesh Bank reforms and weak NBFIs in 2025 and 2026

As of December 2024, 35 NBFIs had defaulted loans of Tk 25,089 crore, 33.25 per cent of disbursed loans, and seven had default rates above 90 per cent.[10]

Show-cause notices to 20 NBFIs

In May 2025 Bangladesh Bank served notices on 20 NBFIs asking why their licences should not be cancelled, giving them 15 working days to respond and signalling that mergers or liquidation could follow.[10] The list included CVC Finance, Bay Leasing, Islamic Finance, Meridian Finance, GSP Finance, Hajj Finance, National Finance, IIDFC, Premier Leasing, Prime Finance, Uttara Finance, Aviva Finance, Phoenix Finance, People's Leasing, First Finance, Union Capital, International Leasing, BIFC, Fareast Finance and FAS Finance.[10]

From nine liquidations to five

On 30 November 2025 the Bangladesh Bank board, chaired by Governor Ahsan H Mansur, approved winding up nine NBFIs under the Bank Resolution Ordinance 2025: FAS Finance, Bangladesh Industrial Finance Company, Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People's Leasing and International Leasing. Those nine held Tk 15,370 crore of deposits and accounted for 52 per cent of the sector's defaulted loans, and the governor said the government had verbally approved about Tk 5,000 crore to repay depositors.[11]

By May 2026, under the elected government, the board had narrowed the in-principle decision to five: FAS Finance, Fareast Finance, Aviva Finance, People's Leasing and International Leasing. Prime Finance, GSP Finance and BIFC were given three to six months to improve, and Premier Leasing was not in the final list. Individual depositors with up to Tk 10 lakh were to receive their full principal without interest, with larger depositors paid proportionately.[12]

Administrators appointed in August 2026

On 9 August 2026 Bangladesh Bank acted under the Bank Resolution Act 2026 against Aviva Finance, Fareast Finance, FAS Finance and International Leasing. It dissolved their boards, removed their managing directors and appointed its own officials as administrators to take the liquidations forward and repay depositors with government funds. People's Leasing was left out because of a legal complication. Bangladesh Bank cited acute capital shortfalls, very high bad loans, persistent liquidity failures, falling earnings and inability to meet obligations.[13]

What happened to mergers?

Mergers were on the table in 2025, but the reported actions against NBFIs have so far been liquidations and administration rather than amalgamations. The merger route remains open through section 49 of the Finance Company Act and the resolution statute, and a stronger finance company or bank looking to acquire a weak NBFI's portfolio should expect Bangladesh Bank to set the terms.

Supervisory changes

The regulator itself has changed. On 28 June 2026 the Department of Financial Institutions and Markets was renamed the Finance Company Regulation and Policy Department, and in July 2026 it issued new circulars on write-offs, individual deposit limits, one-time exit for borrowers and restructuring support.[2] For applicants, the message is that the 2026 regulator is more interventionist and more focused on depositor protection than the one that licensed most existing NBFIs.

Common mistakes in NBFI licence applications

Most stalled applications fail for predictable and avoidable reasons.

• Hidden concentration. Splitting one family's stake across relatives, employees or friendly companies to stay under 15 per cent fails because the Act aggregates related parties for the cap and the significant shareholder test, and a false benami declaration forfeits the shares.
• Untested directors. A nominee with a defaulted related-company loan, a past regulatory breach or a seat on a failed NBFI board will sink the file. Screen every name against all seven section 15(8) grounds and the fit and proper standards in the board policy.
• Untraceable capital. Subscription money borrowed from banks, routed through related companies or lacking tax records invites refusal.
• A plan without a market. Copying existing leasing models or assuming cheap deposits will not satisfy the earning-prospects test.
• Missing the commencement window. The licence starts a six-month race to open for business under section 7(1)(c).
• Unapproved foreign terms. Promising a foreign partner equity or board seats Bangladesh Bank has not approved creates a joint venture that cannot be implemented.

How TRW helps with an NBFI license Bangladesh application

TRW advises sponsors, foreign financial groups and existing finance companies across the regime: structuring, sponsor diligence and fit and proper screening, constitutional documents and shareholder agreements, the Bangladesh Bank submission and regulator queries, and post-licence compliance. We also act for investors and depositors in weak NBFIs on resolution and liquidation. Our banking and finance practice works with our corporate and capital markets teams so that licensing, incorporation and BSEC issues are handled together.

What to watch for the rest of 2026

Three developments will shape any NBFI license Bangladesh sponsors pursue over the next year. First, the liquidations of the five worst NBFIs, and the outcome for Prime Finance, GSP Finance and BIFC after their improvement period, will show how Bangladesh Bank uses the resolution Act in practice.[12] Second, the renamed Finance Company Regulation and Policy Department may replace the 1994 regulations with new licensing and capital regulations under section 67, which could move the Tk 100 crore floor.[1] Third, deposit protection is being extended to finance companies, as our banking law guide explains, which will change how they price and market term deposits.

For a well-capitalised, genuinely diversified sponsor group, the current climate is a reason to prepare an application that answers the regulator's questions before they are asked, not a reason to stay away.

Frequently asked questions

What law governs an NBFI license in Bangladesh?

The Finance Company Act 2023 (Act No. 59 of 2023), in force from 13 November 2023. It repealed the Financial Institutions Act 1993, and section 4 requires a Bangladesh Bank licence to carry on financing business.[1]

What is the minimum paid-up capital for a finance company in Bangladesh?

Tk 100 crore for a company registered in Bangladesh, under the 1994 regulations as amended in July 2011 and saved by section 70 of the 2023 Act. Paid-up capital and reserves must also meet Bangladesh Bank's risk-based capital requirement. Confirm the current figure before filing.[3]

How much of a finance company can one sponsor own?

No person, related party or family may hold more than 15 per cent, and anyone becoming a significant shareholder with more than 5 per cent needs a Bangladesh Bank no-objection first.[1]

Can foreigners own a finance company in Bangladesh?

Yes. Bangladesh Bank sets the maximum foreign shareholding under section 10, and foreign shareholders' board seats are fixed in proportion to their shareholding.[1] [6]

What are the fit and proper tests for finance company directors?

Section 15(8) disqualifies anyone without prescribed experience and qualifications, with a criminal conviction, implicated in fraud or financial crime, in breach of financial regulation, linked to a cancelled licensee, a defaulting borrower or bankrupt. Directors also need at least a bachelor's degree.[1] [7]

How long does Bangladesh Bank take to grant a finance company licence?

The Act sets no deadline for the decision, and new licences have been rare. Once granted, the company must begin business within six months or risk cancellation.[1] [2]

Can a finance company take demand deposits?

No. Section 24 bars deposits repayable on demand by cheque, draft, debit card or order, and Bangladesh Bank sets a minimum deposit term of three months.[1] [5]

What CRR and SLR apply to finance companies?

Deposit-taking finance companies keep a 1.5 per cent cash reserve on a fortnightly average, never below 1 per cent daily. The SLR is 5 per cent for deposit-takers and 2.5 per cent for others.[4]

Which NBFIs is Bangladesh Bank liquidating?

In May 2026 the board decided in principle to liquidate FAS Finance, Fareast Finance, Aviva Finance, People's Leasing and International Leasing. Administrators were appointed to the first four in August 2026.[12] [13]

Can Bangladesh Bank cancel a finance company licence?

Yes, on any of nine grounds in section 7, including breach of conditions, misleading information, failure to start within six months and operating below minimum capital, after a show-cause notice of up to 15 days.[1]