Bangladesh signed a US$450 million credit with the World Bank on 30 October to strengthen the financial sector safety net and bank supervision, and to support restructuring of the banking sector.
The money comes from the International Development Association (IDA), the World Bank’s fund for lower-income countries, for the Financial Sector Support Project II, according to a press release from the Economic Relations Division (ERD) reported by The Business Standard.
The deal at a glance
- Amount: $450 million IDA credit
- Implemented by: Bangladesh Bank, under the Financial Institutions Division
- Period: 1 July 2026 to 30 June 2031
- Terms: 1.5% interest a year on the amount drawn; 25 years to repay, including a five-year grace period; a commitment fee of up to 0.5% on undrawn funds, which the World Bank has waived for Bangladesh in recent years
- Signed by: Md Shahriar Kader Siddiky, Secretary of the ERD, and Jean Pesme, World Bank Division Director for Bangladesh and Bhutan
Why it matters
Weak banks are one of the main brakes on Bangladesh’s growth. The World Bank’s October Development Update put non-performing loans at about a third of all bank lending. A more stable banking system matters for NGOs and microfinance institutions that rely on banks for savings, credit lines and transfers, and for the households they serve. It is also one of the reforms economists say Bangladesh must speed up during its three-year LDC extension.
What to watch
The project’s detailed components when the World Bank publishes its project documents, how it links to bank mergers and resolution under Bangladesh Bank, and progress on the wider $10 billion financing talks between the government and the World Bank.
This story is based on an Economic Relations Division press release as reported by The Business Standard. Image: an illustration generated with Google Gemini. It is not a photograph.
Sources
- Bangladesh signs $450 million loan deal with World Bank to strengthen financial sector, The Business Standard, 31 October 2026
Topics: aid financing · governance · national
Spotted an error? Tell us and we will correct it. Read our editorial standards.
