Bangladesh has sought loan assistance from the World Bank for financial sector reforms and budget support and Salehuddin Ahmed – finance and trade adviser to the interim government – demanded that conditions given by the agency be implementable.
Salehuddin made the disclosure to reporters after a meeting with World Bank South Asia Regional Director Mathew Verghis at the adviser’s office in the ministry of finance.
The finance adviser said, “We need help for the reforms. We need budget support immediately. The World Bank is our biggest multinational donor. So we need their help. We spoke about our liquidity situation. They have agreed.
“I will speak again in Washington DC. I am fairly positive, as they are open-minded, more discussions will happen. We will mainly discuss how we will carry out the reforms.”
Salehuddin continued, “We are expecting a budget support this year, and another in the future. It will be finalised. The issue of conditions will come when the loan is disbursed. We will see whether it is feasible.
“We have pointed out that action should be taken on the things that are feasible in terms of reforms.”
According to Bangladesh Bank sources, the World Bank will provide a loan of $100 million to Bangladesh for financial sector reform. Of this figure, $750 million will be provided as policy based loans and $250 million will be investment loans and guarantee facilities. In this regard, the World Bank officials held a meeting recently with Bangladesh Bank Governor Ahsan H Mansur.
These loans are expected to be approved by the World Bank board by next December. However, Bangladesh has to fulfil three conditions to get the loans.
Among those, Bangladesh has to accept the condition of setting up an asset management company in the private sector, re-defining defaulted loans according to international standards and presenting the report of the audit firm of the newly formed task force to the World Bank.
