The World Bank will provide a loan of $450 million to strengthen the foundation of Bangladesh's banking sector.
At the current market rate, this amounts to approximately Tk 55 billion Bangladeshi.
In a press release issued by the World Bank today, Wednesday, it was stated that the organisation’s board meeting approved this loan.
The World Bank believes that a strong banking sector is a prerequisite for recovering economic growth and creating employment.
This loan is being provided under the Financial Sector Support Project–2. The main objective of this project is to strengthen the deposit insurance system to protect small depositors and enhance the supervisory capacity and framework of the Bangladesh Bank.
The World Bank believes that the project will also aid in building the foundation for bank restructuring and state-owned bank reforms.
Under this project, the World Bank states that the capital of the Deposit Protection Fund will be increased, and important priority reform activities, such as the development of deposit protection mechanisms, the establishment of an effective emergency liquidity assistance framework, the formulation of bank restructuring strategies, and the reform of state-owned banks, will be advanced.
The World Bank further mentions that the banking sector in the country faces challenges due to weak corporate governance, influence over regulatory agencies, and lending to related parties.
By the end of March 2026, the non-performing loan ratio stood at 32. 6 per cent, significantly higher than the South Asian banks' average of 7. 9 per cent. Similarly, by the end of December 2025, the capital-to-risk-weighted assets ratio of the entire banking system was a negative 2. 6 per cent.
Jean-Pesme, Director of the World Bank’s Bangladesh and Bhutan division, stated that a stable and inclusive financial sector is essential for Bangladesh to achieve its goal of becoming a trillion-dollar economy.
However, the banking sector, which holds about 90 per cent of the total financial sector’s assets, is under increasing pressure.
Jean-Pesme further mentioned that through this project, it will be possible to establish necessary tools, systems, and protective frameworks to safeguard and retain the confidence of small depositors. As a result, stability will return to the banking sector, contributing to economic growth and job creation.
Under the project, the information and communication technology (ICT) infrastructure of Bangladesh Bank will be modernized and upgraded. This will address the growing cybersecurity risks and fill significant gaps in sector-related information and analysis systems.
It will enhance Bangladesh Bank’s capability in risk monitoring, data-driven and risk-based supervision, and increase the resilience of the financial sector.
World Bank's Senior Financial Sector Specialist and Task Team Leader of the project, Toshiaki Ono, said that as part of a coordinated effort with development partners, including the International Monetary Fund (IMF) and the Asian Development Bank (ADB), this project will support strengthening the preparedness to manage bank sector crises and enhance the capacity of relevant authorities in handling sectoral pressures.