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BB: Depositors to get back their money

  • Published at 09:31 pm July 10th, 2019
People’s Leasing liquidation move leaves depositors worrying
Photo : Dhaka Tribune

Total asset value of People’s Leasing was Tk3,239.98 crore against the total Tk2,036.22 crore in liability

Bangladesh Bank (BB) has assured that the depositors will get their money as the central bank has started the liquidation process of People’s Leasing and Financial Services Limited (PLFS).

The central bank came up with the assurance at a press briefing organized its headquarter in the capital on Wednesday, where BB executive directors Md Serajul Islam and Md Shah Alam, among others, were present.

Serajul, also the BB spokesperson, said that depositors of the People’s Leasing must not panic as they would get back their money.

He also mentioned that the asset of the entity was still higher than the deposits PLFS received from different institutions and individuals.

Total asset value of People’s Leasing was Tk3,239.98 crore against the total Tk2,036.22 crore in liability in the form of deposits which were received by the entity.

On how much time it would require for the depositors to get back the money, Md Shah Alam said that the central bank had already started the process of liquidation immediately after getting approval from the finance ministry.

Md Shah Alam said: “We have already contacted with the BB’s lawyers and one of them has agreed to work in this regard."

BB would file the apple with the High Court soon, he added.

Replying to a question on how much time it would take to complete the liquidation of PLFS, he said it was a legal matter but the BB was doing its part promptly and would try to complete the entire process quickly and repay the depositors’ money.

Shah Alam said the depositors would get back their money in full as the liquidator would evaluate the asset and liabilities and there would be no problem in paying depositors’ money in full if the value of asset was found higher than the liabilities.

Asked whether there was any failure of the central bank, Alam said the central bank dissolved the board of PLFS based on its inspection carried out in 2015 when BB revealed that some of its directors withdrew loans in violation of rules.

Afterwards, BB took several steps under the legal purview including appointment of administrator in the entity to restore its financial state and merge PLFS with other entities.

In the meantime, BB also took legal measures for the recovery of bad loans as well and finally took the initiative of liquidation as per the finance ministry’s approval, the BB ED said.

On June 27, the Ministry of Finance approved a proposal of Bangladesh Bank on liquidating the PLSF.

"If the liquidation goes through, this will mark the first liquidation of a financial institution in Bangladesh," a senior central bank official said.

On July 9, during a visit to People’s Leasing headquarters at Motijheel in the capital, many depositors were seen crowding the office premises to draw their deposits but their applications for getting back their hard-earned money were turned down.

PLFS Managing Director and CEO Sami Huda was not present at the office on the day. Only four to five officials of the company were seen at their desks.

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