Non-bank financial institutions (NBFIs) must seek prior permission from the central bank to lend money to their subsidiaries or associates and waive loans or interest.
The Bangladesh Bank (BB) took the directive to protect the interests of depositors and restore discipline in the financial sector.
The regulator said this in a circular issued on Thursday.
The central bank earlier found that the NBFIs are investing in their subsidiaries or associates breaching the regulatory limit.
Simultaneously, rules are being violated in the case of the waiver of interest or loan write-off, thereby hampering discipline in the financial sector.
"There is concern that the NBFIs may not get back their loans or investments," noted the circular.
Under the circumstances, the NBFIs, from now on, are required to have the central bank's permission for lending funds to their subsidiaries or associates and waiving loans or interest.
In another circular, the Bangladesh Bank said it appointed Citizens Bank PLC as a primary dealer of government securities for one year.
It also said the central bank could extend the tenure after considering the bank's year-long activities, it added.
