The International Monetary Fund (IMF) has expressed its deep concern over the recent rise in non-performing loan (NPL) in the banking sector. It wanted to know about the actions the government had taken in realising loans taken fraudulent 14 from different state-owned banks.

The agency also has sought to know about the progress relating to the special 'diagnostic examination' that the Bangladesh Bank (BB) is supposed to conduct on four state-owned commercial banks (SCBs) as was asked by it in September last.

A note containing the concerns of the multilateral lending agency, along with a set of queries made on the entire banking and financial sectors, has been sent to the Ministry of Finance (MoF) and the Bangladesh Bank ahead of the visit of Extended Credit Facility (ECF) team of the Fund.

The ECF mission, headed by David Cowen, is scheduled to arrive in Dhaka today (Tuesday) to review the progress in the pledged reforms in banking and other financial areas as were agreed upon under the credit deal, a senior finance official said.

The BB top officials said they had completed a great deal of tasks towards completing the special 'diagnostic examination' to identify weaknesses of he SCBs in asset quality and liquidity management.

"We are very much operational in conducting an inclusive diagnostic examination of Sonali, Janata, Agrani and Rupali banks," BB's Deputy Governor Abu Hena Mohammed Raji Hasan told the FE on Monday.

The examination, along with identifying other alleged malpractices, irregularities and rise in classified loans in the entire banking sector is being conducted by the central bank, Mr Raji added.

The amount of classified loans increased by Tk 72.82 billion or 1.58 percentage points in the third quarter of 2012.

As of September 30, the total amount of non-performing loans in the banking sector soared to Tk 362.82 billion or 8.75 per cent of the total outstanding loans.

The amount of NPL was Tk 290 billion or 7.17 per cent of total outstanding loans of banks on June 30 last, data of BB shows.

News: The Daily Financial Express/Bangladesh/27-Nov-12