The conditions include reforms in the nationalised commercial banks (NCBs), phasing out the margin of letters of credit (L/Cs) and tax reforms.

The IMF board approved the $490-million PRGF credit June 20 this year and has already cleared the first instalment. The total fund will be channelled in seven instalments.

A six-member IMF mission, headed by Chanpen Puckahtikom, assistant director of the Asia-Pacific department, is due in Dhaka tomorrow to review the status of the economic programmes funded through the PRGF.

The mission members will meet government officials, private sector representatives, civil society members and donor agencies during its 10-day stay.

"The main objective of the mission will be to review the macroeconomic situation in Bangladesh," Marijn Verhoeven, the IMF representative to Bangladesh, told reporters yesterday.

The mission will review the overall situation in the state-owned enterprises (SoEs), discuss governance and oversee progress in the formation of an independent anti-corruption commission, he added.

Another IMF team will visit Bangladesh in December before releasing the second tranche of the PRGF credit. The two missions will report to the IMF board, which will finally approve the fund release, Verhoeven informed newsmen.

Asked what if Bangladesh failed to fulfil the conditions by the IMF-fixed time, he said the IMF stops sending review missions and funds will not be released in such cases.

The board is serious about the benchmark and timeframe of the structural conditionalities. If any of the conditions could not be fulfilled for unforeseen reasons, the board meeting is delayed for some months and only after the government fulfils the condition are funds released again, the IMF representative said.

According to an IMF document, the government pledged to phase out margin requirements for opening of L/Cs for imports, new professional management for Agrani Bank and management support for Sonali and Janata banks.

The government also promised to modernise and expand the 'large taxpayer unit' and make a central intelligence audit and monitoring cell fully operational.

Referring to Nobel laureate economist Prof Joseph E Stiglitz's criticism of the World Bank-IMF policies during his recent visit to Dhaka, the IMF representative said there may be debates on the IMF, but the IMF programmes 'would surely benefit Bangladesh'.

He emphasised political consensus on the IMF-funded development programmes in Bangladesh.

About the NCBs, he said manpower retrenchment in the NCBs is not the key issue. "The people of the country must realise the importance of reforms in the NCBs, SoEs and tax administration," he said.