Non Bank Financial Institutions (FIs)

Non Bank Financial Institutions (FIs) are those kinds of financial institutions which are regulated under Financial Institution Act, 1993 and controlled by Bangladesh Bank. Now, 31 FIs are working in Bangladesh while the maiden one was established in 1981. Out of the total, 2 is fully government owned, 1 is the subsidiary of a SOCB, 13 were initiated by private domestic initiative and 15 were initiated by joint venture initiative. Major sources of funds of FIs are Term Deposit (at least six months tenure), Credit Facility from Banks and other FIs, Call Money as well as Bond and Securitization.
The major difference between banks and FIs are as follows:

a)      FIs cannot issue cheques, pay-orders or demand drafts.

b)      FIs cannot receive demand deposits,

c)      FIs cannot be involved in foreign exchange financing,

d)      FIs can conduct their business operations with diversified financing modes like syndicated financing, bridge financing, lease financing, securitization instruments, private placement of equity etc.