The World Bank and the Asian Development Bank on Sunday pledged a combined loan of $2.5 billion to Bangladesh to support reforms in the country鈥檚 banking and financial sectors.
Both institutions held separate meetings with Bangladesh Bank at the latter鈥檚 head office in Dhaka.
A US delegation, led by Brent Neiman, assistant under secretary for International Finance at the US Department of the Treasury, also met with Bangladesh Bank governor Ahsan H Mansur to discuss the country鈥檚 banking sector and macroeconomic challenges following the recent political shift.
Bangladesh Bank鈥檚 executive director and spokesperson, Husne Ara Shikha, confirmed the meetings and mentioned that the discussions focused on improving the country鈥檚 macroeconomic situation.
These meetings took place nearly six weeks after Sheikh Hasina鈥檚 resignation as prime minister and fleeing to India on August 5 amid a student-led mass uprising, ending her rule for 16 years.
The political change underscored the urgent need for reforms in the financial sector, which reportedly neared collapse under the previous government.
Shikha said that the World Bank would provide $1 billion, and the ADB聽 would contribute $1.5 billion.
She explained that the World Bank鈥檚 loan would be given in two parts -- $750 million for policy support and $250 million as an investment loan and guarantee facility. 鈥楾he ADB鈥檚 $1.5 billion will be disbursed in three phases, starting with an initial $500 million.鈥�
Bangladesh must meet several conditions to access these funds, including forming a private sector asset management company, redefining non-performing loan criteria to meet international standards, and reviewing audit reports from a newly established task force.
Shikha noted that 50 per cent of these reforms were already underway.
The US delegation and Bangladesh Bank also discussed strategies to address macroeconomic challenges, such as controlling inflation, recovering laundered money, and promoting economic growth.
A senior central bank official said that the issue of non-performing loans in the banking sector was a key topic of the discussion.
Central bank officials presented their recovery plan for the banking sector and outlined steps to stabilize the economy, providing the US delegation with a comprehensive overview of the challenges.
On the same day, the US delegation also met with the chief adviser to the interim government, Nobel laureate Professor Muhammad Yunus.