ICB sees Tk 12b frozen in failed banks, NBFIs

The Investment Corporation of Bangladesh (ICB) is facing a heavy loss of more than Tk 12.05 billion as it has been unable to recover any of the money invested in fixed deposit receipts (FDRs) with 12 troubled financial institutions.

Of the institutions, 10 are non-bank financial institutions (NBFIs) and two others are private banks.

A majority of these NBFIs have already come under a process of liquidation by the central bank, while the two banks have been in financial distress.

It will be another blow for the state-run investment bank if the money is lost to the failed financial institutions, at a time when it has already fallen into the red due to unyielding investments.

Bangladesh Bank (BB) Governor Ahsan H. Mansur recently said the government had given its approval to accelerate the process of liquidation of nine NBFIs. These are First Finance, Bangladesh Industrial Finance Company (BIFC), Premier Leasing and Finance Limited, Fareast Finance and Investment, GSP Finance Company, Prime Finance, Aviva Finance, People's Leasing and Financial Services, and International Leasing and Financial Services.

Of them, the ICB has money with People's Leasing, International Leasing, Premier Leasing, Fareast Finance, Prime Finance, First Finance, and Aviva Finance. It has also made investments in BD Finance, Phoenix Finance, and FAS Finance.

ICB Managing Director Niranjan Chandra Debnath said the NBFIs had not been renewing or making any payments against the FDRs since 2021. The Corporation, however, has kept provisions against the receivables, which wiped out its profits.

The ICB made provisions worth Tk 6 billion in FY25 against the FDRs, resulting in a loss of Tk 12.14 billion.

Mr. Debnath said the central bank had been informed of the matter. He also acknowledged that there is little possibility of getting the money back if the present state of the organisations is considered.

"Nevertheless, we have continued our efforts to assess the amounts of funds and tread a legal path to recovery."

The NBFIs have reported severe losses following scams and the swindling of funds by the infamous PK Halder and his associates.

According to the Anti-Corruption Commission (ACC), Mr. Halder was involved in the embezzlement of more than Tk 35 billion solely from People's Leasing and Financial Services during 2015-2019.

The NBFIs that owe money to the ICB saw their liabilities surpass assets four to five years back. Over time, their unpaid financial obligations have only mounted. For example, the net asset value of First Finance turned negative Tk 14.3 per share five years ago, which fell further to negative Tk 37.86 per share in 2024.

The NBFIs have not yet published financial statements for 2025. However, their financial health is expected to have worsened in the year.

FID, BSEC cannot evade blame

The ICB made investments with taxpayers' money in the scam-hit banks and NBFIs. General investors of the investment bank are now going to pay heavily for the bad investments.

An institution like the ICB should have assessed risks before making investments, said Managing Director of Midway Securities Md. Ashequr Rahman.

"So, the Corporation's previous boards and management were responsible for keeping money in the weak banks and NBFIs."

The ICB is governed by the Financial Institutions Division (FID) of the Ministry of Finance, and the ministry nominates directors to the Corporation's board.

On the other hand, the Bangladesh Securities and Exchange Commission (BSEC) is the regulator of the ICB.

Market insiders say the Corporation injected funds into Padma Bank following suggestions from the ministry.

"There is no scope to say that the FID and the BSEC did not know about the bad investments. Those were publicly available data given in the companies' financial statements.

"So, the FID and the BSEC cannot avoid their responsibility," said Mr. Rahman.

Lenders demand money back from ICB

Meanwhile, the ICB has fallen short of funds to pay back its dues since it has been receiving no returns from its own investments.

It received a substantial amount of funds from different banks in the form of loans and FDRs. Of the lenders, Probashi Kallyan Bank sent a letter to the FID in the second week of October, seeking its intervention for recovery of funds worth Tk 220 million kept in FDRs with the ICB.

In its letter, the bank said the Corporation had paid only Tk 80 million out of the dues of Tk 300 million.

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