IMF finds data conflicts with Bangladesh Bank figuresAs per International Monetary Fund (IMF), the ratio of defaulted loans is much higher than the central bank data
The Bangladesh Bank Headquarters In Motijheel Mahmud Hossain Opu/Dhaka Tribune
November 1, 2022 6:48 AM
The visiting delegation of IMF has asked Bangladesh Bank (BB) to publish the correct information on defaulted loans.
As per International Monetary Fund (IMF), the ratio of defaulted loans is much higher than the central bank data, said sources close to the discussion.
The visiting IMF delegation discussed Monday with Bangladesh Bank on banking supervision update, strategic planning for the financial sector, and risk management issues, reports UNB.
Deputy governors AKM Sajedur Rahman Khan, Abu Farah Md Nasser and senior officials of the central bank joined the discussion.
The IMF team will sit in a meeting with the Bangladesh Securities and Exchange Commission (BSEC) on November 7 to discuss issues including the current status of the capital market and the imposition of floor prices.
At the meeting, the IMF raised several questions in this regard. The organization has also expressed concerns over suspicious transactions and money laundering.
The IMF team has recommended that the definition of non-performing loans be brought to international standards.
If not, there will be questions regarding Bangladesh's banking sector in the international arena.
According to international standards, the default loan ratio is considered tolerable up to a maximum of 3%.
But in Bangladesh, this ratio is about 9%. This ratio is more than 20% in government banks.
Bangladesh Bank's spokesperson GM Abul Kalam Azad said the central bank's discussion on Monday was fruitful and discussions will continue till November 9, 2022.
Under three schemes - Extended Credit Facility, Rapid Financing Instrument, and Rapid Credit Facility - a total of $4.5 billion has been sought from the IMF. Bangladesh Bank is optimistic about getting the loans.
The IMF delegation arrived in Bangladesh on October 26 to discuss conditions for releasing $4.5 billion loans for budget support to the country. Bangladesh's Mission Chief and Senior Economist of Washington-based international lender Rahul Anand led the IMF team in the discussion with Bangladesh.
Meanwhile, bond market development, risk management and control, compliance infrastructure and enforcement measures in the market will also be discussed in the meeting with BSEC on November 7, according to officials involved with the process.
BSEC spokesperson Mohammad Rezaul Karim told UNB on Monday that the regulator is making all preparations for the meeting.
BSEC Chairman Shibli Rubaiyat-ul-Islam, Commissioners, and Executive Officers will be present in the meeting, he said.
To prevent the ongoing fall in prices, the BSEC floor price system was imposed on the capital market on July 28 this year.
Although its market is on the rise, two-thirds of the companies listed in the capital market are currently stuck at the floor price. Investors are not able to buy and sell shares of these companies despite their desire.
As a result, the capital market transactions are continuously decreasing.
A delegation of the global lender IMF from Washington arrived in Dhaka on October 26 to discuss a $4.5 billion loan sought by Bangladesh amid dwindling foreign currency reserves.