World Bank is providing loan assistance of one billion or one billion US dollars to Bangladesh. However, this money should be used for reforming the country’s banking and financial sector and strengthening the central bank. And for this, the organization has set four conditions to Bangladesh Bank.
Members of the World Bank delegation set these conditions during a meeting with Bangladesh Bank Governor Ahsan H. Mansoor on Sunday. Some senior officials of Bangladesh Bank were present at this time. World Bank Prosperity Practice Group Regional Director Matthew A. Varghese led the delegation. The organization’s country director for Bangladesh and Bhutan, Abdulaye Sek, also participated in the meeting.
It is known that in the meeting, there was a detailed discussion on the central bank’s plan to reform the financial sector. After the fall of Sheikh Hasina’s government, the delegation of the World Bank was informed about various reform initiatives, including the reorganization of the board of directors of 11 banks, the formation of a task force to reform the banking sector.
Bangladesh Bank Executive Director and Spokesperson Husne Ara Shikha told Samakal that a total of 100 million dollars of loan support was discussed. For this, the World Bank has said several reforms. He said that the draft of the asset management company’s framework has been prepared and given to the Ministry of Finance. And the definition of defaulted loans has been redefined to international standards. The grace period for term loan defaults is going up in two phases by next March.
It is known that 750 million dollars will be available as policy loans out of 1 billion dollars of the World Bank, which is mainly budget support. 25 million dollars will be available as investment loan.
The central bank expects to receive this support in December. The four conditions that Bangladesh has to accept to get this loan-1. Creating structure of asset management company to recover defaulted loans from banks and financial institutions and formulating policy to determine who will be the actual beneficiary of a loan. 2. The scope of forensic audit of banks and financial institutions should be determined. 3. A separate department should be established in Bangladesh Bank for the implementation of regulations (enforcement). 4. Apart from this, the remaining 25 million dollars will be available for use as investment loans and guarantee facilities.
It is reported that in the meeting, there were some proposals regarding the investment loan of 25 million dollars from the World Bank in the reform of the banking sector, some recapitalization and the purchase of the information technology sector. However, Bangladesh Bank did not agree on some aspects of the purchase. For this reason, a new proposal will be made in this regard.