Issues and challenges of non-banking financial institutions and financial institutions in Bangladesh

Abstract

This report focuses on the Issues and Challenges of Non-Banking Financial Institutions and Financial Institutions in Bangladesh and identifies those mechanism which can improve the NBFI’s and Financial sector. The main objective of this report is to find out the factors which are responsible for Banking and Non-Banking Issues- Challenges and necessary steps to reduce those problems. Financial management systems in countries wealthy or poor, established or emerging, developed or undeveloped, include Banks and Non-Bank Financial Institutions (NBFIs). The deadly COVID-19 Pandemic has had a devastating influence on the financial and finance industries of most nations throughout the globe, including Bangladesh. As a result of the COVID-19 Pandemic, opportunistic global financial and economic circumstances, a decline in exports and imports, mismanagement, and corruption, Bangladesh's financial industry has been enduring terrible suffering and hardships. Bangladesh's banking system is experiencing a liquidity crisis as a result of a variety of demand and supply side problems. As a consequence, there is a loss of trust and confidence in the banking and non-banking sectors as a result of high levels of nonperforming loans (NPLs), leading to a loss of faith and credibility in this industry. Moreover, the primary concern of Bangladesh's NBFIs is raising funds for low-cost investment and due to banks' present liquidity issue, it has become hard for them both to obtain cash at a fair rate. However, When Peoples Lending and Wealth Management Limited went bankrupt recently as a result of massive financial mismanagement by the company's executives, it tarnished the financial and economic reputations of NBFIs by robbing depositors of their hard-earned monies and shattering public faith in NBFIs.