The visiting International Monetary Fund (IMF) delegation has advised Bangladesh Bank to disclose detailed and complete information regarding bad and risky loans fin the public interest. Meeting sources said that the visiting IMF delegation gave this suggestion in the meeting held with the BB officials on Sunday (April 28).  In the meeting, the IMF asked to make the financial health of the banks and the inspection report open to the customers. At the same time, it urged to increase the number of inspections to prevent irregularities-corruption and loan scams. Officials concerned in the meeting said that bad loans or risky assets are increasing in banks due to various irregularities including big loan scams. Several banks have weakened which also acknowledged by the BB Governor.  Therefore, the IMF believes that the deposits of those banks which are in trouble are also at risk. In such a situation, the global lender suggested that the banks should disclose the full report of risky assets to the customers.  Read more: DUJ, DRU, TIB condemn ban on journalists entering Bangladesh Bank According to the IMF Officials, “If these reports are published, the customers will be able to make informed decisions about keeping their deposits.” In the meeting, the IMF sought to know whether the central bank's inspection of banks' financial health is continuing or not. Clarification has also been sought as to whether inspection reports are disclosed to customers or not.  In addition, the IMF delegation suggested increasing the quality and number of inspections to prevent irregularities, corruption and loan scams, sources said. When asked about the meeting with the BB, the executive director and spokesperson of the BB Mesbaul Haque said that the meetings with the IMF are ongoing. This meeting will be held step by step till May 8. He did not agree to make any comment other than that and said the details will be given in future. Read more: Islamic Banking in Bangladesh: Commendable contribution to the country’s economic growth

In any country, a safe and sound banking system is the sine qua non of a strong economy. By channelising funds from savers to borrowers, banks help keep the wheels of the economy moving, in the way boosting the confidence of businesses, investors and consumers. But for years, state-owned banks in Bangladesh have been foundering under the weight of stressed or non-performing assets -- or bad loans, in lay man's term -- all thanks to irrational lending and inadequate evaluation and monitoring of debtors. Read: SMEs, women-led enterprises need access to stimulus loans Any loan that remains overdue for over three months is termed as a stressed asset in the banking sector. And today, this huge pileup of bad loans threatens to derail the economic revival in Bangladesh by choking the credit supply channel of the economy, as against export earnings and the resilience of the private sector in fuelling growth amid Covid. In fact, the cumulative non-performing loans (NPL) of six state-owned commercial banks (SCBs) currently stand at Tk 43,836 crore against that of the combined figure of Tk 49,191 crore of 42 private commercial banks (PCBs). Read Bangladesh Bank announces 4 pc export subsidy on bicycle, cement sheet, and MS steel For years, Bangladesh Bank (BB) -- the central bank -- has been underscoring the need for state-owned banks to strengthen the recovery of loans lying unrealised by defaulters, many wilful. At the same time, banks have been advised to take necessary steps in meeting the capital deficit and creating a professional asset liability management ecosystem. Md Serajul Islam, central bank's spokesperson and executive director, told UNB that the stressed assets of the state-owned banks increased "marginally due to the higher volume of total outstanding loans". Read Bangladesh Bank tops Cyber Drill 2021 Implementation of a slew of stimulus packages has caused an increase in the outstanding loans in the country's banking system during the first half (H1) of the year, he said. The amount of outstanding loans rose by more than 3% to Tk 12,13,164 billion as of June 30, 2021, from Tk 11776.59 billion quarter on quarter, as per BB data in UNB's possession.