IMF asks to cut tax exemptions and red tape in banks.

Besides raising questions about the bureaucratic board, the IMF delegation sought to know the government's actions on financial sector reforms, including recent performance of the banking sector, risk management, recapitalization needs. Apart from this, the IMF has suggested making a strategy paper to reduce defaulted loans. Banks have asked for updated information on five legislations including the Companies Act, Bankruptcy Act.

According to the Financial Institutions Department, two of the five laws have been approved by the Cabinet. The rest are working. It was assured to consider the IMF's recommendation regarding the appointment of bureaucratic directors in the bank.

Meanwhile, the IMF team had a meeting with various departments of Bangladesh Bank yesterday. The IMF has called for lifting interest rate ceilings, devising strategies to reduce inflation and releasing monetary policy four times a year.

However, Bangladesh Bank told the team that although monetary policy is currently published once a year, it will be done twice a year. It will be published four times in phases. This is because Bangladesh Bureau of Statistics (BBS) currently publishes GDP estimates once a year.

If these accounts are published more than once, monetary policy can also be published more often. Bangladesh Bank also said that although inflation is between 9 and 10 percent, it will decrease after the rise in AMAN. The interest rate cap will be withdrawn gradually.

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