The interim government intends to secure a $500 million loan from the Asian Development Bank (ADB) to revive the country’s banking sector, which has been devastated by substantial anonymous loans and loan defaults during the tenure of the fallen Awami League government.
Expressing hope of receiving the loan for the first time next month, officials from the Economic Relations Division (ERD) said that discussions were held with the Asian Development Bank.
Reforms for the financial sector in Bangladesh are underway. As part of this process, officials have made a decision to provide funds for further reforms in the banking sector.
They also believe the budget support proposal would be approved at the ADB board meeting in April, followed by the signing of a loan agreement.
Meanwhile, the officials also expressed frustration, saying that the ousted Sheikh Hasina government and its associates had violated banking regulations, looted hundreds of crores of taka, and destroyed the financial sector of the country. The country's non-performing loans (NPL) have reached an all-time high. According to data from the central bank, as of December last year, the defaulted loans in the banking sector stood at 20.20 per cent of the total loans.
Officials further noted that due to massive defaulted loans, deposit shortages, and operational scandals, at least a dozen commercial banks have been placed in the red zone.
Another ERD official said that the proposed $500 million from ADB would fall under Subprogram-1 of the policy-based loan for banking sector reforms.
Translated & edited by Fariha Nowshin Chinika
