DHAKA, July 13, 2024 (BSS) - Country's renowned economist and executive director of the Policy Research Institute (PRI) Dr Ahsan H Mansur today put strong emphasis on banking sector reform Programme in order to address the growing trend of non-performing loans (NPLs), liquidity and deposit crises, current foreign currency reserve situation and exchange rate.

"There is no alternate to banking sector reform to improve the situation and there is also a need for strong political will from the government in this regard," he said.

Dr Mansur was addressing a discussion titled "Reasons for bad state in the banking sector of Bangladesh" organized by the Economic Reporters' Forum (ERF) held at its auditorium in the capital's Paltan area.

Presided over by ERF president Refayet Ullah Mirdha, its general secretary Abul Kashem moderated the Programme.

Special Correspondent of the Daily Samakal Obaidullah Rony and Senior Reporter of the Daily Prothom Alo Sanaullah Sakib made a presentation on the current state of the country's banking sector.

Dr Mansur said although NPLs were there in the eighties, but the results came good later due to the implementation of the banking sector reform programmes in the early nineties.

He opined that it would not be possible to contain inflation through 'out of the box' initiative, but should have to pursue the usual policy.

"The interest rate has been made market based while the exchange rate has also been made market based to some extent," he added.

The eminent economist said there is no need to make the slight non functional banks functional through printing money while the incentives on inward remittances should have to stopped, otherwise inflation would not decline.

Dr Mansur said the foreign currency reserves should have to be increased through proper policy, otherwise it would not be possible to deal with the over $450 billion GDP size of the country with the current level of foreign currency reserve.