The World Bank has approved a loan of $45 crore to strengthen Bangladesh’s banking sector, restore financial stability and help create economic growth and job creation.
The World Bank’s executive director board approved the loan on Wednesday.
Under the ‘Financial Sector Support Project-2’, the protection of small depositors will be strengthened, the capital increase of deposit protection funds, improve the supervision capacity of Bangladesh Bank and the reform of state-owned banks will be laid.
The project will provide support to modernize the deposit protection system, the formation of emergency liquidity support framework, formulation of bank reconstruction strategies and implementation of structural reforms of government banks, the World Bank said.
At present, the country’s banking sector is under pressure due to high default loans, poor corporate governance and irregularities in the distribution of loans. The default loan rate at the end of March 2026 exceeded 32.5 percent, which is much higher in the average rate in South Asia at 7.9 percent.
Jean-Pesme, World Bank Division Director for Bangladesh and Bhutan, said Bangladesh’s long-term economic goals cannot be achieved without a strong and inclusive financial sector. The project will play an important role in protecting small depositors, restoring confidence in the financial sector and restoring stability in the banking sector.