The government has started the process of meeting the requirements set by the International Monetary Fund (IMF) for sanctioning a loan of USD 4.5 billion. The concerned regulators have already taken initiatives to reduce defaulted loans in the banking sector and subsidies.
The Bangladesh Energy Regulatory Commission (BERC) recently hiked the wholesale electricity price by 19.92 per cent, prompting power companies to propose a 20 per cent hike in electricity prices passed on to consumers.
Financial sector regulator, Bangladesh Bank has asked four state-owned banks to reduce their defaulted loans by up to 12 per cent by June next year. At the same time, it began counting net foreign exchange reserves as determined by the global lender.
Ultimately, the loan is to be approved at the IMF Board of Governors meeting in the last week of December. An IMF delegation has completed preliminary talks with Bangladesh during its visit to Dhaka from 26 October to 9 November.
He held separate meetings with the Ministry of Finance, the National Board of Revenue (NBR), Bangladesh Bank and the Ministry of Power, Energy and Mineral Resources. He put forward various conditions to repay the loan and the officials here started working accordingly even before the final approval.
The IMF’s demands include reforms in the banking sector and reduction in defaulted loans, reduction in spending on subsidies, and reforms in the revenue sector.
Ahsan H Mansoor, former IMF official and executive director of the Policy Research Institute (PRI), said the conditions put forward by the IMF must be met and it would be unwise to disagree here.
“The conditions are very flexible this time. If we cannot accept these (conditions), then we have to understand that we do not want the solution of the problem.
