An International Monetary Fund (IMF) appraisal team suggests prompt measures for plugging fund leakages under social-safety net, enacting the pending banking-sector laws and lessening loads of non-performing loans (NPLs) within the set timeline.
The team, which continues reviewing the progress Bangladesh has made so far in conducting reforms after obtaining a $4.7-billion loan from the IMF, on Thursday met with officials from the finance division, financial institutions division and the central bank, sources said.
The multilateral lender is expected to release the third tranche of the loan in a month after completion of the review, based on progresses made until March last.
Chris Papageorgiou, Chief of the Development Macroeconomics Division, is heading the IMF mission.
Sources having attended the meetings told the FE that the IMF team at the discussion with finance -division officials inquired about the measures so far taken to ensure that allocations under the social-safety -net recipe go to the designated persons.
"They suggested closing the leakages in this to stop misuse of safety-net funds," one of the sources said.
Finance officials informed the team that a notification was issued on April 1 asking all the ministries and divisions concerned to make sure that in case of cash distribution under any new social-safety -net programme the funds have to be sent into the mobile financial-service accounts of beneficiaries which have been opened using their own national identification numbers.
The same has to be ensured by June 2025 next in the case of cash distribution under the ongoing safety -net programme, which is not distributed to beneficiaries into their own mobile financial-service accounts, the notification informed.
Sources said the IMF team also met officials of the financial institutions division where they emphasised the need for enactment of some laws that are required to bring order in the country's ailing banking and financial -institutions sector.
According to officials concerned the enactment of the Negotiable Instrument Act, Bankruptcy (Amendment) Act, Financial Institutions Act, and the Artharin Adalat (amendment) Act remained in the queue, which the IMF officials asked to enact as quickly as possible.
At the meeting the IMF officials also asked taking measures for lessening NPLs in the country's banking sector in line with the set timeline of June this year. The IMF had earlier suggested lowering NPLs in private -sector banks to 5.0 per cent and below 10 per cent in state-run banks by the timeline.
In 2023, the classified loans rose by 21 per cent to Tk 1.46 trillion compared to the total NPLs of Tk 1.2 trillion in December 2022.
State-owned commercial banks bear the biggest burden of the classified loans -- some 21 per cent or Tk 658 billion of their total outstanding loans -- followed by state-run specialised banks with a share of 13.87 per cent or Tk 56.70 billion, the private commercial banks having 5.93 per cent or Tk 710 billion, and foreign commercial banks 4.82 per cent or Tk 32 billion.
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