The International Monetary Fund has extended the tenure of the Extended Credit Facility programme by three months to give the government sufficient time to meet the unfulfilled conditions for release of the last two instalments of the $1 billion-loan.

The government now has until October 31 to fulfil the conditions for release of the remaining two instalments, amounting to $280 million.

The multilateral lender deferred the sixth of the seven-part instalments for the $1 billion loan in November last year after the government failed to meet three of its pertinent conditions.

A finance ministry official said they have already met two of the conditions but fulfilling the other one, which entails a thorough audit of Bangladesh Petroleum Corporation's balance sheet by an international firm, would be a major challenge within the timeframe.

 The other two conditions are related to the VAT law.

The amended VAT law has to be approved in a cabinet meeting, and the cabinet on June 29 gave it the green light. The proposed law will be placed in parliament when it goes to session in September.

The other condition was that the government would assign a vendor to implement the tax automation system, which the government has already approved.

Approved in April 2012, the ECF programme has enforced a series of major reforms in the economic sector.