Bangladesh: Selected Issues

International Monetary Fund

No 2018/159, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper analyzes the performance of state-owned commercial banks (SOCB) in Bangladesh. Bangladesh’s experience with the SOCBs is not unique: the SOCBs have been underperforming in comparison to private banks and foreign-owned banks. Large nonperforming loans (NPLs) imply that a large amount of the savings is being wasted by financing lossmaking activities, and therefore becomes unavailable for financing productive investments. High NPLs and the need for provisions also increase the cost of credit to good borrowers, further dampening investment and growth. Resolute steps are required to resolve the SOCBs’ weak performance, reflecting empirical evidence and mixed results from the previous efforts.

Keywords: ISCR; CR; Improve SOCBs; Bangladesh; Ready-Made Garment; export; RMG sector; NSC issuance; bank financing; export diversification index; trade partner; Commercial banks; Loans; Government securities; Interest payments; Nonperforming loans; Europe; Global; South Asia (search for similar items in EconPapers)
Pages: 39
Date: 2018-06-08
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