In­ter­na­tional Mon­e­tary Fund seeks data on banks’ stock in­vest­ment

The Pak Banker - - Front Page -

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

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