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IMF pushes for enforcement of regulations

Siddique Islam | Published: September 05, 2019 10:08:13 | Updated: September 07, 2019 12:40:10


Reuters file photo

The International Monetary Fund (IMF) has emphasised strict enforcement of regulations to ensure stability of the financial sector in Bangladesh.

It also recommended that the policymakers take effective measures to further improve the financial system if the country wants to reach the next stage of development.

The observations of an IMF visiting mission came at a concluding meeting held at the Bangladesh Bank (BB) headquarters on Wednesday.

BB governor Fazle Kabir presided over the meeting.

The eight-member IMF Financial Sector Stability Review (FSSR) Mission, led by Susan Mary George, for the first time assessed possible major vulnerability in the country's financial sector since August 25.

It appreciated the existing regulatory framework that is of almost global standard, but they expressed concern over weak enforcement of rules and regulations, meeting sources said.

Most of the problems would be solved if the regulations are enforced properly by the authorities concerned, observed the team of the Washington-based lender.

The meeting discussed issues like the situation on non-performing loans (NPLs), effective monitoring of property prices, separation of commercial functions of state-owned commercial banks from development one and strengthening capital base of scheduled banks.

IMF also suggested taking effective measures to address macroeconomics fundamental vulnerability giving top priority to ensure stability in the financial sector.

The global monetary watchdog offered technical support to BB for improving financial-sector stability through reforming rules and regulations.

The central bank, however, is yet to make a decision on IMF's technical assistance, according to BB officials.

During the visit, the mission met with policymakers, regulators, experts and stakeholders of scheduled banks and financial institutions as part of its assessment.

It also heard issues like liquidity situation, trend of NPLs, good governance and human resources in the banking sector here when they met the leaders of Association of Banks, Bangladesh (ABB) recently.

When contacted, ABB chairman Syed Mahbubur Rahman said the IMF mission heard the issues but they did not give any recommendations or suggestions.

Earlier, an IMF FSSR Scoping Mission visited Dhaka from April 16-18 this year.

siddique.islam@gmail.com

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