Step-by-Step Process to Open a Non-Banking Financial Institution (NBFI) in Bangladesh
By TRW Law Firm
🌐 Overview
Non-Banking Financial Institutions (NBFIs) play a critical role in Bangladesh's financial ecosystem. Unlike traditional banks, NBFIs do not accept demand deposits or issue cheques but provide a broad array of financial services such as leasing, loans, investments, venture capital, and asset management. Their primary objective is to enhance financial inclusion and supplement the operations of the banking sector.
In Bangladesh, NBFIs are regulated under the Financial Institutions Act, 1993, and supervised by Bangladesh Bank, the central bank. Establishing an NBFI is a highly structured process requiring compliance with a robust regulatory framework to ensure transparency, financial prudence, and macroeconomic stability.
This guide from TRW Law Firm outlines a comprehensive, step-by-step procedure for registering and operating an NBFI in Bangladesh.
✅ Step 1: Form a Public Limited Company
🔎 Description
The legal foundation for any NBFI begins with forming a Public Limited Company (PLC) under the Companies Act, 1994. This entity will operate the financial services business and apply for licensing with Bangladesh Bank.
📆 Procedure
- Choose a unique name incorporating financial terminology like "Finance," "Investment," or "Capital."
- Apply for name clearance at the RJSC web portal: http://www.roc.gov.bd
- Pay the name clearance fee (BDT 575) at a designated bank.
- Upon receiving clearance, prepare the Memorandum of Association (MOA) and Articles of Association (AOA). These must specifically state the financial nature of business.
- Submit the following forms to RJSC:
- Form I: Declaration for registration
- Form IX: Consent of directors
- Form XII: Particulars of directors and officers
- Pay registration fees and stamp duties (as determined by the share capital).
- Obtain the Certificate of Incorporation from RJSC.
📄 Required Documents
- Name clearance certificate
- Draft MOA and AOA
- Forms I, IX, and XII
- NID/passport copies of shareholders and directors
- Payment receipts for fees and stamp duty
- For foreign investors:
- Board resolution of the parent company
- Notarized copies of incorporation documents
- Encashment certificate for remitted capital
🌐 Step 2: Open a Company Bank Account
🔎 Description
A company bank account is needed for receiving capital investments and handling future transactions.
📆 Procedure
- Choose a scheduled bank under the Bank Company Act, 1991.
- Submit relevant documents and application forms.
- Deposit the minimum paid-up capital of BDT 1 Billion, as required by Bangladesh Bank.
📄 Required Documents
- Name clearance certificate
- Draft MOA and AOA
- NID/passport copies of directors/shareholders
- Bank-specific forms
🔎 Step 3: Obtain Name Clearance from Bangladesh Bank
🔎 Description
The proposed company name must be cleared by Bangladesh Bank, ensuring it reflects the nature of the financial business.
📆 Procedure
- Submit a formal application to the Financial Institutions and Markets Department.
- Include a copy of RJSC name clearance and MOA/AOA.
- Await Bangladesh Bank's confirmation.
📄 Required Documents
- Application letter
- RJSC name clearance
- Draft MOA and AOA
📉 Step 4: Apply for an NBFI License from Bangladesh Bank
🔎 Description
A formal license from Bangladesh Bank is mandatory to operate as an NBFI.
📆 Procedure
- Submit an application to the Financial Institutions and Markets Department.
- Bangladesh Bank will assess:
- Financial strength
- Paid-up capital adequacy
- Governance structure
- Future earning potential
- Public interest
- Submit a 3–5 year business plan, including projected financial statements.
- Deposit a security reserve fund as instructed by Bangladesh Bank.
📄 Required Documents
- Application letter
- Certificate of Incorporation
- Approved MOA and AOA
- Shareholder and director details (CVs, financial info, proof of no defaults)
- 3–5 year business plan with financial projections
- Encashment certificate for capital remittance
- Bank statement showing reserve fund
- Auditor certificate verifying net owned funds
- Tax returns of directors and the company
- Credit reports from authorized agencies
✉️ Step 5: Post-Licensing Compliance
🔎 Description
Licensed NBFIs must adhere to ongoing compliance regulations issued by Bangladesh Bank.
📆 Procedure
- Maintain minimum paid-up capital continuously
- Follow Bangladesh Bank’s Code of Conduct for NBFIs
- File annual returns with RJSC:
- Schedule X: Share capital and shareholders summary
- Form 23B: Auditor appointment
- Financials: Balance Sheet and P\&L
- Maintain Statutory Liquidity Ratio (SLR):
- 5% total (2.5% as Cash Reserve Requirement (CRR), 2.5% in liquid assets)
- NBFIs not taking term deposits: only 2.5% CRR
- Submit semi-annual financial reports to Bangladesh Bank
- Adhere to AML/CFT laws
📄 Required Documents
- Annual financial statements
- Schedule X and Form 23B
- Compliance filings to Bangladesh Bank
- AML and governance reports
🚧 Step 6: Obtain Additional Licenses (If Applicable)
🔎 Description
Depending on the scope of business, the NBFI may require additional permissions.
📆 Procedure
- Trade License from City Corporation
- Tax Identification Number (TIN) and Business Identification Number (BIN) from NBR
- Import/Export License (if involved in cross-border operations)
- Fire Safety Certificate (if required)
- Permissions from BIDA for foreign investment
📄 Required Documents
- Certificate of Incorporation
- MOA and AOA
- Lease deed or office ownership
- NBFI License
- TIN, BIN application forms
- Proof of fee payment
🚪 Step 7: Commence Operations
🔎 Description
Once all approvals are in place, the NBFI may begin operations.
📆 Procedure
- Establish office in a commercial space
- Hire skilled personnel
- Develop internal control and risk management systems
- Implement lending, recovery, and governance protocols
- Maintain loan quality and manage Non-Performing Loans (NPLs)
📄 Required Documents
- Office lease or ownership document
- HR files and employment contracts
- Operational policy documents
- IT infrastructure setup
📈 Summary Table: Key Steps to Establish an NBFI in Bangladesh
| Step | Activity | Key Authority | Main Requirements |
|---|---|---|---|
| 1 | Incorporate PLC | RJSC | Name clearance, MOA/AOA, Forms I, IX, XII |
| 2 | Open bank account | Scheduled Bank | Minimum capital BDT 1 Billion |
| 3 | Name clearance from BB | Bangladesh Bank | MOA/AOA, RJSC clearance |
| 4 | Apply for NBFI license | Bangladesh Bank | Business plan, capital proof, no-loan-default record |
| 5 | Post-licensing compliance | RJSC, BB | SLR, financial filings, AML/CFT compliance |
| 6 | Additional licenses (if needed) | City Corp, BIDA, NBR | Trade license, TIN/BIN, import/export permission |
| 7 | Commence operations | Self-regulatory | Office setup, staff hiring, operational systems |
💬 Contact TRW Law Firm
For complete legal support in setting up and operating a Non-Banking Financial Institution in Bangladesh, reach out to our experienced corporate team.
TRW Law Firm – Banking & Finance Practice
📍 Dhaka: House 410, Road 29, Mohakhali DOHS
📍 Dubai: Rolex Building, L-12 Sheikh Zayed Road
📞 +8801708000660
📞 +8801847220062
📞 +8801708080817
📧 info@trfirm.com
📧 info@trwbd.com
📧 info@tahmidur.com
Let TRW Law Firm guide your journey from incorporation to full NBFI operations with strategic legal insight and regulatory compliance.
