International Monetary Fund seeks data on banks’ stock investment
DHAKA: The International Monetary Fund (IMF) may impose new conditions on the $1 billion loan to Bangladesh, limiting investment by banks in the stockmarket to mitigate risks in the financial sector.
An IMF mission will start talks with the government to finalise the conditions for its new loan and make a yearly evaluation of the overall economic condition of Bangladesh.
The mission put forward some 50 queries, including data on the investment made by the banks in the stockmarket.
They asked for the latest monthly data on share holdings and capital market exposure of each commercial bank. A Bangladesh Bank (BB) official said IMF sought the data to analyse the banks' risks in the share market. Such conditions might be included in banking supervision and reforms, he added. Another BB high official said the central bank took several steps to render the banks riskfree before receiving any instruction from the IMF.
In November, a draft of the conditions to be imposed in the new IMF credit programme indicated that a bank-by-bank financial soundness indicator has to be set from before. Sources said autonomy of the Securities and Exchange Commission and tightening the stock market regulations may be included as conditions. The IMF conditions are also likely to include formulating new laws on value added taxes and income tax, minimising loss in the state-owned enterprises (SOEs), and further tightening budget expenditure. -PB News