World Bank to Provide $1 Billion Loan to Bangladesh: Under Four Conditions
The World Bank has announced a $1 billion loan to support financial sector reforms in Bangladesh's central bank. However, to secure this loan, Bangladesh must meet four specific conditions.
**World Bank Assistance: A Detailed Overview**
On Sunday, September 15, a World Bank delegation met with Bangladesh Bank Governor Dr. Ahsan H. Mansur to discuss the loan assistance plan.
The World Bank will provide $750 million as a policy-based loan to Bangladesh. Additionally, $250 million will be offered as investment loans and guarantee facilities. The loan is expected to be approved by the World Bank's board by December.
Conditions for the Loan
To access the $750 million loan from the World Bank, Bangladesh must meet the following four conditions:
1.Establish Asset Management Company Structure: Create a functional asset management company framework for the recovery of non-performing loans by banks and financial institutions.
2.Define Actual Beneficiaries: Develop policies to identify the actual beneficiaries of loans.
3.Determine Scope of Forensic Audits: Define the scope and procedures for forensic audits of banks and financial institutions.
4.Formulate a Separate Enforcement Division: Establish a separate division at the Bangladesh Bank to enforce regulations.
Additionally, the remaining $250 million of the loan will be available for use as investment loans and guarantee facilities.
By meeting these conditions, Bangladesh will receive the loan assistance and pave the way for reforms in the country’s financial sector. This World Bank assistance is considered a significant step toward economic stability and development for the country.