IMF team due next week to review SoCBs’ performance

A team of the International Monetary Fund is expected to arrive in the city next week to assess the overall performance of the state owned commercial banks (SoCBs), an official said.
The IMF mission chief for Bangladesh Daisaku Kihara will lead the delegation, which will assess the banks' performance during fiscal year (FY) '18 and the first quarter of FY '19.
The non-performing loans, profitability, capital adequacy, the liquidity situation, and funding will be assessed during the four-day visit.
The team will also get the update on the banks' compliance with the memorandum of understandings (MoUs) signed with the government, the measures taken to improve their balance sheet, and the recapitalisation plan for the current fiscal year.
They will also discuss the loan recovery framework update of the SoCBs.
During the visit, the mission will have a meeting with the financial institutions division, among other agencies.
A senior official at the ministry of finance (MoF) told the FE the overall macro-economic policy will come under discussion during the IMF team's visit.
He said the state lenders have been asked to provide the financial institutions division with updated information about their performance, which can be placed before the IMF team.
The central bank data show that the volume of non-performing loans (NPL) in the banking sector jumped by Tk 150.37 billion at the end of June this year from December last year, reaching Tk 893.40 billion.
At the same period, the classified loans stood at 10.41 per cent of the total outstanding loans.
The NPL of six SoCBs rose to Tk 428.52 billion in June last from Tk 373.26 billion in December last year.
Another senior finance official said during the last fiscal year, the government provided Tk 20 billion to meet the capital shortage of SoCBs. In the current fiscal year, the same amount has also been kept for the banks.
The state banks are suffering from huge capital shortfall as the Basel-III regulatory framework raised capital-adequacy requirement for banks.
Officials said the frequent irregularities involving large loans also cause the capital drainage of the state owned banks.

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