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He said that while bad loans have not risen sharply in recent years, some new loans have defaulted due to the current macroeconomic challenges facing businesses.

“To discuss a way out, we had met with the central bank top officials in October last year. The banking regulator assured us they will sit with the sector people soon after the groundwork,” Saha added.

‘TO THE EDGE OF COLLAPSE’

Central bank data showed that 12 finance companies out of the total 35 hold nearly 73.5 percent of the sector’s bad loans. At seven companies, bad loans crossed 90 percent of total disbursed loans.

For example, FAS Finance’s bad loans stood at 99 percent of its outstanding loans, Fareast Finance at 98 percent, Aviva Finance at 90 percent, BIFC at 97 percent, International Leasing at 96 percent, People’s Leasing at 97 percent and Union Capital at 95 percent, according to BB data.

Anis A Khan, former chairman of the Association of Bankers, Bangladesh (ABB), recently said that some banks and NBFIs have fallen victim to an “unholy nexus”, which he described as a “serious threat” to the integrity of the overall financial system.

“Besides, several other NBFIs have been infiltrated by unscrupulous investors who have exploited their positions as chairpersons and directors for personal gain,” Khan said, comparing these actions to “outright theft” that has pushed several NBFIs “to the edge of collapse”.