IMF wants to know steps to reduce defaulted loans

Staff Correspondent: The country’s banking sector is suffering from various crises. One of the biggest problems is defaulted loans. The International Monetary Fund (IMF) has set a target of reducing non-performing loans of public and private banks by June 2026. In a meeting today, the international donor organization wanted to know what kind of steps Bangladesh Bank has taken to reduce defaulted loans.
The banking sector of the country is going through the worst times in recent times. A delegation of IMF held a meeting with Bangladesh Bank on Wednesday (April 24) amidst the turmoil in the sector.
Several Bangladesh Bank officials present at the meeting said that by June 2026, the non-performing loans of government banks should be brought down to 10 percent. Besides, the average default rate of private banks is supposed to be brought down to 5 percent. The IMF wanted to know what kind of steps Bangladesh has taken in this regard.
In the meantime, Bangladesh Bank has repeatedly failed to meet the target of $4.70 billion of IMF’s loan waiver and reserves. At the same time, Bangladesh has lagged behind in implementing interest rates, raising revenue and introducing market-based currency exchange.
Bangladesh Bank could not fulfill the important conditions given by IMF. The agency believes that the country’s financial account is negative and reserves continue to fall due to the imposed rate of exchange.
In such a situation, the IMF has asked for detailed information about the steps Bangladesh Bank has taken in terms of stability of the country’s foreign trade, preservation of reserves and reduction of defaulted loans. Besides, the organization also wanted to know what steps have been taken to implement the market-based currency exchange rate and interest rate.
However, due to the detailed discussion with Governor Abdur Rauf Talukder about the implementation of currency exchange and crawling peg in Washington, the IMF delegation in Bangladesh has not given any advice on the implementation of crawling peg for the time being.
An official of Bangladesh Bank present in the meeting said that the IMF discussed financial sector reforms, defaulted loans, interest rate implementation, monetary policy, inflation, foreign trade balance and outlook, currency market and liquidity management with Bangladesh Bank.
He also said that our meeting with the IMF mission started on Wednesday (April 24). Now the company is collecting data from us for analysis. Then maybe give different kinds of suggestions.
Apart from reducing defaulted loans, it has also sought information on the impact on the economy of the implementation of smart interest rates in the country. Apart from this, information has also been sought on the stability of foreign trade, preservation of reserves, and the extent to which monetary policy has been implemented.