Financial Advisor Dr Salehuddin Ahmed said the government was happy with the banking sector reform initiatives even though there are constraints.

“The government is happy with the banking sector reform initiatives, although there are constraints… Development partners like the World Bank and IMF are also keeping an eye on financial, banking and tax revenue sector reforms ” he said.

The financial advisor made the comments during an interview with BSS at his secretariat office marking the end of the three months or 100 days of the caretaker government.

At the annual meetings of the IMF and the World Bank, Dr Salehuddin said he had spoken to senior officials of the World Bank, ADB, IDB and OPEC Fund and all had assured the government to extend all possible cooperation.

A good number of banks are in bad shape due to various reasons, such as having more debts than deposits, which is very unfortunate, he cited.

He said Bangladesh Bank has already reconstituted the boards of directors of a few banks while the government is considering framing the ‘Stolen Assets Recovery Act’ but the issue of repatriation of assets would take some time .

The advisor opined that saving weak banks through monetary support from strong banks is not a sustainable measure or a permanent solution as these strong banks should also be viable.

The central bank is also considering how to sell bad assets while trying to bring weak banks back to an optimal level, he added.

He observed that it is a bit difficult to keep weak banks alive for a long time when the central bank is also trying to create an “asset management company”.

Replying to another question, he said that people’s confidence in banks would be restored again if SMEs were given special financing and more jobs were generated and small entrepreneurs were given necessary financing.

While in Washington last month, the financial adviser said he received a positive response from lenders and others concerned with repatriating the siphoned money, as they suggested restoring more discipline in the banking sector, to make decisions regarding bad banks, to reduce reduce bank liabilities, and thus restore customer confidence.

On money laundering, he said the government had already formed a task force while lenders like IMF, US Treasury and UK assured that they could lend their financial experts to support Bangladesh .

He said the government had cleared most dues in the power and energy sector, including those of the International Islamic Trade Finance Corporation (ITFC), as well as in the importation of fertilizers , while the Government Procurement Committee’s purchasing proposals did not remain as good. arrears.

“Reserves are at a satisfactory level…I thank Bangladeshi expatriates for increasing our foreign exchange reserves…Export earnings have not yet declined as exporters still benefit from tax incentives,” he declared.

On the issue of Adani power import, he said the previous government had not paid dues regularly and successively the caretaker government had inherited the arrears.

The advisor said Adani Power now had assurance that the government would pay the remaining dues.

“Our commitment to donors is hundred percent, otherwise they would not come in large numbers,” he said, adding that the government had assured them that Bangladesh would not default like Pakistan and Sri Lanka .

On the foreign loan burden and liabilities, Dr Salehuddin said the government inherited a lot of things like ITFC and Adani Power dues from the previous regime.

Furthermore, he said new imports would also increase the cost, adding: “The pressure is certainly increasing on us… the country’s debt-to-GDP ratio is around 38%, which is even higher in Greece, in Italy and even in the countries of the South. USA”.

He said: “We do not want to put the burden on the shoulders of the future generation… we have appealed to lenders after seeing the sustainability of our debt… we have requested $3 billion from the IMF as well as additional support from the WB and ADB. and they will give us their support. We have such capacity to repay these loans. »

If the government succeeds in boosting FDI and FPI, foreign exchange reserves will increase further, along with efforts to diversify exports, he added.

The country’s foreign exchange reserves increased slightly, driven by a rebound in remittances.