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Weak banking sector contributing to economic risk

One of the three domestic risks that could imperil the economy in the short- to medium term, according to the International Monetary Fund, is the issues with the banking sector. The chances of these issues affecting the larger economy range from medium (10 to 30% chance) to high (30 percent or more). Domestic concerns result from the Rohingya issue’s sluggish resolution, waning donor support, and the more frequent and severe natural disasters linked to climate change.

By 2026, MoUs will seek to raise SoCBs’ capital adequacy ratios and provisioning coverages to 10% and 100%, respectively. A strong risk-based supervisory framework will serve as the cornerstone for actions to be done to increase the financial system’s stability, soundness, and reach. Along with fighting corruption, the government promised to improve governance as part of the $4.7 billion credit program.

 

Source:

The Daily Star

 The Business Post   

 

 

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