MoF asks BB to expedite 5 major acts' endorsement

The Ministry of Finance has asked the Bangladesh Bank to expedite efforts to formulate and amend five major acts related to banks and non-bank financial institutions, officials say.
They say both the World Bank (WB) and the International Monetary Fund (IMF) have for long been pushing for quickening the process.
The acts are the Negotiable Instruments Act 2024, the Bankruptcy (Amendment) Act 2024, the Foreign Exchange Regulation and Management Act 2024, the Bank Deposit Insurance (Amendment) Act 2024, and the Counterfeit Currency Prevention Act 2024.
After the interim government was formed, the Cabinet Division on August 28 sent back the five bills as those needed to be passed as ordinances in the absence of a functioning parliament.
However, no effective steps have been taken so far to place the drafts before the advisers' council for its endorsement, according to officials concerned.
The Financial Institutions Division (FID) in a letter asked the central bank to send the drafts in the form of "ordinances" to the council as soon as possible, taking into consideration their necessity to improve the default loan situation and the prevailing problems in banks and financial institutions.
It also asked the central bank to get the Bengali version of the Bangladesh Bank (Amendment) Act 2024 endorsed by the interim government's Advisory Council.

A senior FID official told The Financial Express banks and financial institutions have been facing chronic problems for a long period, which were exposed following the end of the Awami League regime that had ruled the country for the last 15 years.
He said the volume of default loans in banks has reached an all-time high now, deteriorating the financial health of many banks and causing a severe liquidity crisis in some.
"Strict enforcement of some rules and regulations are needed to put banks and financial institutions in order," he also said.
The official further said enacting the five laws is also necessary as multilateral lenders like the IMF and the WB had long been asking for it.
"The visiting IMF team also inquired about updates on the passage of the five major acts," another FID official said.
The official told The Financial Express the IMF loan review team  has, with great importance, discussed lowering non-performing loans in the banking sector as early as possible, which is part of the conditions for the Washington-based lender's ongoing $4.7 billion credit programme for Bangladesh.
Default loans soared to Tk 2.85 trillion at the end of September, nearly 17 per cent of the total disbursed credit.
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