World Bank lends Bangladesh $450m to shore up a banking sector under repair
Bangladesh has signed a $450 million World Bank financing agreement to strengthen its financial sector safety net, sharpen supervision and back banking reforms, the Economic Relations Division said.
The deal, equivalent to 328 million Special Drawing Rights, was signed by ERD secretary Md Shahriar Kader Siddiky and Jean Pesme, the World Bank's division director for Bangladesh and Bhutan, under the Financial Sector Support Project II. The project runs five years, from 1 July 2026 to 30 June 2031, and will be implemented by Bangladesh Bank under the Financial Institutions Division of the Ministry of Finance.
The terms carry an annual interest rate of 1.5 percent on amounts withdrawn, with a commitment fee of up to 0.50 percent a year possible on undisbursed funds. The World Bank has waived that fee for Bangladesh for many years, including the current fiscal year, the ERD said. Repayment runs over 25 years, including a five-year grace period.
The ERD described the World Bank as Bangladesh's largest multilateral development partner, with financing that supports economic and social development, institutional reforms, infrastructure and energy sector development.
The agreement puts fresh multilateral money behind the supervisory machinery of a banking system in the middle of reform, with the central bank as implementer rather than a line ministry.
