The World Bank Group’s concessional lending arm, the International Development Association (IDA), is providing Bangladesh with a $450 million loan (equivalent to ৳5,580 crore at ৳124 per USD) to restructure the national banking sector and construct a robust financial safety net.
The financing agreement for the 'Financial Sector Support-2' (FSS-2) project was officially signed between Bangladesh's Economic Relations Division (ERD) Secretary Md. Shahriar Kader Siddiky and World Bank Division Director for Bangladesh and Bhutan Jean Pesme, according to an official statement issued by ERD on Saturday, October 31, 2026.
Read nextSummit Group FSRU Shutdown for 3-Day Maintenance Triggers Severe Gas Crisis Risk Across BangladeshThe project will be executed by Bangladesh Bank under the Ministry of Finance's Financial Institutions Division over a five-year period from July 1, 2026, to June 30, 2031. Key initiatives include modernizing ICT supervisory infrastructure, establishing Performance-Based Conditions (PBCs) for financial safety, upgrading the Deposit Insurance Trust Fund (DITF), shortening depositor payout timelines, streamlining bank resolution protocols, and reforming governance in state-owned commercial banks. Under the loan terms, Bangladesh will pay a 1.5% annual interest rate and up to a 0.5% commitment fee on undisbursed funds, backed by a 5-year grace period and a 25-year total repayment schedule.
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