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Finance and Planning Minister Amir Khosru Mahmud Chowdhury has said Bangladesh may need around Tk 16,000 crore annually over the next five to eight years to restructure and recapitalise the banking sector.
The government has made arrangements to allocate the necessary funds, but meeting the entire requirement through public financing alone would be difficult, he said.
Against this backdrop, the International Finance Corporation (IFC) has expressed interest in supporting bank recapitalisation, while private equity investors have also responded positively, the minister added.
Assessing the current banking situation, Amir Khosru said concerns among depositors had largely eased, with deposits returning to banks and net deposits increasing.
The minister made the remarks while speaking to journalists after attending the annual meetings of the World Bank and the International Monetary Fund (IMF) in Bangkok on Monday.
Amir Khosru said Bangladesh was holding discussions with the IMF over its loan programme and reform conditions, expressing optimism that the outstanding issues could be resolved through mutual understanding.
“There are no major differences with the World Bank and the IMF on the fundamental aspects of Bangladesh’s reform plans,” he said, adding that discussions were underway on the timing and phasing of certain reforms.
He stressed that reforms should be implemented gradually, taking into account the country’s economic realities, rather than putting pressure on the government to undertake numerous measures simultaneously.
The minister expressed confidence that continued discussions would help the government and the IMF reach a consensus.
He also said Bangladesh was working to finalise its Country Partnership Framework with the World Bank, which would establish a roadmap for development and economic cooperation in the coming years.
Referring to the global economic situation, Amir Khosru said high international oil and gas prices had increased pressure on Bangladesh’s energy sector.
The government expected additional loan assistance from the World Bank, beyond its regular support, to meet the growing expenditure burden, he said.
He noted that aligning domestic oil and gas prices with international market rates would create a need for subsidies to cushion the resulting economic pressures.
The government also hoped to secure World Bank support to establish a financial safety net for the next two to three years to address economic shortfalls and pressures accumulated over previous years.
The minister also pointed to positive trends in the capital market, saying foreign investors were once again showing interest in investing in Bangladesh.
On revenue collection, he said government measures to address the revenue shortfall were beginning to yield results.
Income tax collection had already grown by around 18 per cent, he said, expressing hope that the country’s tax-to-GDP ratio would also increase over time.
