The World Bank will give a loan of 450 million dollars to reform the country's financial sector

The World Bank is providing a loan of 450 million dollars to strengthen the security system and supervisory capacity of the country's financial sector. With this money, 'Financial Sector Support Project-2' will be implemented. A loan agreement has been signed between the Government of Bangladesh and the World Bank's International Development Agency (IDA).

According to a press release, the agreement was signed at the Ministry of Finance's Economic Relations Department (ERD) on Friday. ERD secretary on behalf of Bangladesh. Shahriar Quader Siddiqui and the organization's Bangladesh and Bhutan Regional Director John Pem signed the agreement on behalf of the World Bank.

According to the agreement, Bangladesh will be given 328 million Special Drawing Rights (SDR), which is equivalent to about 450 million (45 crore) US dollars. The project will be implemented for a period of five years from July 1, 2026 to June 30, 2031.

Bangladesh Bank will implement the project. Its main objective is to strengthen the safeguards of the country's financial sector, increase supervision over financial institutions and help in the restructuring of the banking sector.

As per the terms of the agreement, interest of 1.5 percent per annum is to be paid on the loan raised. And maximum 0.50% commitment fee may be levied on undrawn amount. A total of 25 years will be available for repayment of the loan including a grace period of five years. That is, the loan amount has to be paid in installments at the end of the fixed grace period.

The World Bank is Bangladesh's largest multilateral development partner. The organization has been financing Bangladesh in various fields including economic and social development, institutional reforms, infrastructure and energy sectors.