A visiting delegation of the International Monetary Fund (IMF) has expressed concern over the weakness of Bangladesh's banking system and the high rate of non-performing loans (NPL), according to a senior official of the finance ministry.

The IMF conveyed this concern at a meeting with the Banks and Financial Institutions Division (FID) at the Secretariat early this week. The organization has urged good governance to restore order in the banking sector.

The IMF also wanted to know current situation of the banking sector in discussion with the FID, said the official on condition of anonymity because he is not authorized to talk to the media.

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“The delegation said that even after the government provided various facilities to control defaulted loans, it did not decrease. Rather increased than before,” said the official.  The IMF wanted to know why this is happening.

In response, banks and Financial Institutions have said that the government is trying to reduce defaulted loans. This effort will be continued, sources said.

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At present, the amount of defaulted loans in the banking sector is Tk1.13 lakh crore, which is more than 8.5 per cent. Most of the defaulters are state-owned banks.