Bangladesh Bank said the decision was taken in view of the institutions' capital shortfall, high non-performing loans, liquidity crisis and deterioration in earning capacity. At the same time, the institutions have been brought under resolution and administrators have been appointed. Experienced officials of Bangladesh Bank have been appointed as administrators and co-administrators, who will oversee the management and rehabilitation process of the institutions.

At the end of December 2025, the non-performing loan ratio of FAS Finance was 99.99%, Fareast 98.50%, Aviva 93.93% and International Leasing 99.44%. Earlier last year, Bangladesh Bank had identified nine institutions as 'non-operational'. Among them, the remaining five are—People's Leasing, BIFC, Premier Leasing, GSP Finance and Prime Finance.

The nine institutions have individual and institutional deposits of Tk 15,370 crore, of which Tk 3,525 crore belongs to small depositors. Currently, out of 35 non-bank financial institutions in the country, 20 are troubled, with a non-performing loan ratio of 83.16%. In contrast, the 15 institutions in good standing have a non-performing loan ratio of about 7% and their profit is Tk 1,465 crore.

The central bank hopes that this step will restore good governance in the financial sector and public confidence.