The visiting International Monetary Fund mission on Thursday observed that the international practice should be followed in implementing the merger and acquisition in the country鈥檚 ailing banking sector.
Besides, the Washington-based multilateral lender wanted elimination of ineligible beneficiaries under the social safety net programme.
The IMF, now on a fortnight-long visit in the capital, made the observations while meeting with the officials of the Financial Institutions Division and the Finance Division at the Secretariat.
Officials attending the meetings said that the IMF wanted exercising international practices to implement the merger between weak and strong banks for improvement of the banking sector hamstrung by bad loan, loan theft and weak performance.
The IMF expressed the view against the backdrop of a Bangladesh Bank initiative for forced mergers amid criticisms by local economists that the initiative will create opportunities for many directors and bankers responsible for weakening the banks to avoid legal actions.
On April 2, the World Bank warned that forced bank mergers without a thorough assessment of asset quality might become counterproductive for the country鈥檚 banking sector.
The IMF meeting with the Financial Institutions Division also focused on the growing non-performing loans in the banking sector and the passage of the necessary acts in line with the loan worth $4.7 billion sought by the government to tackle the shortage of foreign currencies.
Since January 2023, the IMF has disbursed $1.1 billion.
The ongoing IMF mission linked to disbursement of the next tranche suggested expansion of the social safety net programme by excluding ineligible beneficiaries during its meeting with the Finance Division.
The Finance Division officials told the visitors that verified mobile financial service accounts have been made mandatory for beneficiaries of cash benefits under the social safety net programme to check manipulators of cash benefits.
They also said that around four lakh new beneficiaries would be included in the coming FY25 with verified MFS accounts.
Since 2019, all major cash transfer schemes have been brought under the Government-to-Person programme, while the MFS has been chosen as a medium for transfer of cash benefits under the safety net programme since FY21.
But incidents have been found in which persons not enlisted as social safety net beneficiaries received the cash through non-verified MFS accounts, said a circular issued by the finance ministry on April 1.聽
Some Tk 1,26,000 crore has been allocated in the current FY24 for safety net benefits under some 130 schemes.
The number of beneficiaries has been estimated at 1.5 crore.聽聽聽
Think tank Centre for Policy Dialogue in a report released in March 2023 said that Tk 1,500 crore in social safety net benefit meant for the elderly and widows is pocketed by ineligible beneficiaries every year due to poor targeting and regulatory weakness.聽
The think tank estimated that around 30 per cent of the cash aid for the elderly and 33 per cent of that for the widows go to ineligible beneficiaries.
