No banks will be shut down: Finance adviser

Finance Adviser Salehuddin Ahmed has said some banks are recovering well and others may continue to struggle, but no banks will be shut down.

"Corrections are being made to address the negative syndromes in the banking sector. Islami Bank, the largest bank, is recovering. The interim government has no intention of closing any banks," he said while addressing a press conference in the finance ministry conference room at the Secretariat today (19 November).

Finance Secretary Dr Muhammad Khairuzzaman Mozumder said Bangladesh hopes to receive $1 billion from the International Monetary Fund (IMF) this fiscal year, and additional support has also been requested for the current three-year loan programme with the global lender.

"We hope to receive $1 billion from the IMF within this fiscal year. An IMF team will arrive in Bangladesh on 4 December for final discussions on this matter," he said at the press conference.

In addition, the Asian Development Bank (ADB) will provide $600 million and the World Bank $500 million in budgetary support by this December, the secretary added.

Finance Adviser Salehuddin Ahmed said the interim government has inherited a devastated economic situation from the previous Awami League administration, reports UNB.

"From the banking sector to the capital market, there is a bleak scenario everywhere. Irregularities and corruption in development projects have compounded the crisis," he said.

"We are trying hard to correct all these anomalies," he said, emphasising efforts to restore order and stability across key economic sectors.

The adviser said austerity measures are being implemented to reduce the budget deficit. "With that, we face the challenge of increasing revenue. Without improving revenue, we will not be able to finance our development projects."

Salehuddin said measures are being taken to reduce government expenditure. "Salaries and allowances for government officials will not be impacted," he assured.

Referring to the Annual Development Programme, he mentioned that projects deemed unnecessary or influenced by political considerations are being reviewed for possible adjustments.

Regarding the banking sector, he said significant steps have been taken by the Bangladesh Bank to stabilise the system.

He, however, acknowledged lingering weaknesses within the central bank, pointing to deficiencies in supervision, monitoring, and policymaking.

He said one of the primary goals of the interim government is to stabilise the banking sector and restore the lost trust while ensuring protection of the depositors.

Mentioning that honest business people have no reason to fear, the finance adviser said those who repay their loans properly and pay taxes will face no problems.

"Those who exploited various loopholes during the previous government's tenure are the ones afraid now," Salehuddin said.

The government is also taking steps to make the money loan courts more active in recovering default loans, said Salehuddin Ahmed.

Speaking at the press conference, Financial Institutions Division Secretary Nazma Mubarak said swift measures will be taken to ensure the weak banks currently unable to return depositors' money can return the money.