The International Monetary Fund (IMF) has called for immediate action to accurately estimate and reduce Bangladesh’s non-performing loans (NPLs), which threaten the country’s financial stability. Chris Papageorgiou, IMF Mission Chief for Bangladesh, emphasized that NPLs—unpaid loans—restrict the availability of funds for new lending, posing significant risks to the financial system.
Following the IMF mission’s visit to Dhaka from September 24-30, Papageorgiou highlighted the urgent need for NPL estimation based on international standards and a comprehensive reduction strategy. He also stressed the importance of conducting an asset quality review and adopting global best practices for banking recovery and resolution.
In addition to addressing NPLs, Papageorgiou identified several key reforms for lasting financial stability, including risk-based supervision, enhanced corporate governance, and strengthening the independence of Bangladesh Bank. He also underscored the importance of accelerating regulatory reforms and developing the domestic capital market to support long-term economic growth. The IMF, in collaboration with the World Bank, Asian Development Bank (ADB), USAID, and the UK’s FCDO, is working with a task force established by Bangladesh Bank to address the sector’s vulnerabilities.
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