The government has decided to resolve disputes over fulfilling two conditions set by the International Monetary Fund before getting the release of two tranches of Extended Credit Facility (ECF) fund, official source said yesterday.
The global lender is expected to disburse around $280 million under the ECF.
The IMF conditions include extension of schedule to launch new VAT Law and appointment of an international auditor for Bangladesh Petroleum Corporation (BPC).
The government high-ups recently asked the finance division to address those issues for expediting the disbursement of IMF credit.
An official of finance division said: “The unresolved issues for disbursement of IMF credit will be discussed at today’s government reform committee meeting.”
“We have decided to extend schedule to launch the new VAT Law although IMF is yet to be informed officially.
In the meeting, we will decide when to inform the global lender,” he said.
Sources at the finance division said BPC picked up a local auditor to look into its financial matter and to prepare an annual report, but IMF imposed the condition to find an international audit firm.
Last week , the government injected Tk1,500 crore into two of its state-owned banks – Sonali and BASIC – which were sucked almost dry of capital in the wake of alleged lending forgeries.
A source in the finance division said the Finance Ministry had already provided Tk710 crore for Sonali Bank and Tk790 crore for BASIC Bank to make up for their capital shortfalls.
The IMF wanted not to disburse more than Tk800 crore to rescue financially-troubled BASIC Bank under the ECF conditions at the end of this fiscal year.
On September 23, regarding VAT reforms, Muhith said the government will not be able to complete VAT reforms this year and that might extend till 2016.
“But I am not sure whether IMF will agree with me,” he added.
Last September, a six-member IMF mission headed by Rodrigo Cubero, deputy division chief, had expressed dissatisfaction over sluggish progress in VAT reforms.
Apart from the two tranches, a fresh deal between the global lender and the government is likely to be halted if the finance division fails to comply with a major IMF condition, apprehends NBR officials.
The fate of two installments might be decided in March next year.
