IMF enquired of amount of washed money, defaulted loans
BI Report || BusinessInsider
IMF logo is seen. Photo: File
The International Monetary Fund (IMF) wants to know how much the government has benefited from a controversial financial programme dubbed ‘whitening black money.’
The Fund also enquired of the actual amount of foreign currency reserve at the Bangladesh Bank and wanted to know authorities’ explanations over different provisions of bank company law to measure magnitude of bad loans.
The Fund wanted to know about Bangladesh’s budget deficit and other monetary and fiscal aspects (as per Article IV consultation). The IMF Article IV team sat with the officials of the budget wing of the Finance Division as they wanted to learn about various issues of the next national budget.
The visiting IMF delegation sat with the Finance Division and Bangladesh Bank in the last two days.
The delegation, known as Article Mission IV, led by Rahul Anand, the IMF's Assistant Director for Development, arrived in Bangladesh on Friday on a 14-day visit.
An official of the Finance Division, requesting anonymity, said the government needs another tranche of assistance from them to balance the budget.
Experts fear that the next budget deficit would be much higher than the incumbent budget deficit projection due to diversion of funds to address Covid-19 pandemic. Finance ministry officials said Bangladesh badly needs IMF assistance.
"It is true that the IMF will impose strict strings before sanctioning any assistance in the coming year,” said an official of the finance ministry.
The IMF Executive Board provided US$732 million to Bangladesh to address its urgent balance of payments and fiscal needs under the Fund’s Rapid Credit Facility and Rapid Financing Instrument.
During the last couple of days IMF and government officials discussed progress and challenges of implementation of the government-announced incentive packages, revenue collection, cost of vaccine imports, excess liquidity in the banks and single digit interest rate.
They also conversed on the measures to curb money laundering and terrorism financing and implementation of FATF recommendations.
The incumbent budget offered black money holders to whiten their illegal money by investing in almost all the sectors in the country.
The delegation wanted to know at the opening meeting about the amount of laundered money so far and revenue collection situation.
The IMF delegation wondered if black money is not being whitened enough, then why the opportunity is being extended every year.
Besides, the IMF sought some 10 types of information regarding the state-owned banks, like amount of post-Covid-19 defaulted loans and loan write-offs, asset risk, capital deficit, board of directors, legal reforms and special audit progress, etc.
They also wanted to evaluate the performance agreements of the public banks, reforms of other banks, and the latest status of the formation process of Asset Management Company (AMC).
According to the latest figures from the NBR, in the first five months (July-November) of the current 2021-22 financial year, Tk 112 crore (of 150 people) was washed and that NBR earned Tk 12 crore in taxes. The amount of washed money in the same five months of the 2019-202 fiscal was Tk 550 crore.
A total of Tk 20,600 crore was whitened belonging to some 12,000 citizens in the 2019-2020 fiscal year. Here, NBR got a total of Tk 2,000 crore in taxes.