Bangladesh’s banking sector must accelerate the adoption of IFRS 9 to rebuild public trust, strengthen governance, and ensure more accurate loan-loss provisioning, according to experts speaking at a recent financial sector discussion. They noted that inconsistent classification of non-performing loans (NPLs), inadequate provisioning, and weak risk assessment practices have eroded confidence among depositors and investors. Implementing IFRS 9—an international financial reporting standard focused on expected credit losses—could significantly improve transparency and early risk detection.
Speakers stressed that IFRS 9 compels banks to shift from an incurred-loss model to a forward-looking approach that recognises potential credit risks well before default. This change would reduce the tendency to reschedule loans excessively and ensure that banks maintain healthier balance sheets. They warned that without timely implementation, the sector may continue to face capital shortfalls, rising NPL ratios, and heightened systemic vulnerabilities.
Experts also highlighted that proper adoption of IFRS 9 requires upgraded data systems, skilled risk professionals, and strong regulatory oversight. Banks must invest in analytical tools capable of modelling macroeconomic scenarios, borrower behaviour, and sectoral exposures. Additionally, they urged the central bank to enforce uniform standards across all institutions to prevent regulatory arbitrage.
Several panellists stated that adopting IFRS 9 is not merely a compliance requirement but an essential step toward restoring credibility in the financial system. They added that international investors closely evaluate IFRS alignment before extending funding or partnerships, making the transition vital for Bangladesh’s global financial integration. By embracing a more robust credit-risk framework, the industry can improve resilience, protect depositors, and rebuild confidence in banking stability.
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