The Executive Committee of the National Economic Council (Ecnec) today approved a Tk.1,276 crore project aimed at strengthening banking supervision also modernizing financial technology and improving the management of troubled banks.
The five-year scheme titled Financial Sector Support Project-II will be implemented by Bangladesh Bank from July 2026 to June 2031. The initiative is almost entirely funded by the World Bank's International Development Association.
The move comes at a critical time as Bangladesh's banking sector struggles with non-performing loans reaching nearly 33%, weak governance, liquidity pressures and outdated IT systems. Weak supervisory tools have also left the sector vulnerable to cyberattacks and cross-border financial risks.
To address these challenges, the project will overhaul Bangladesh Bank’s technology infrastructure, allocating Tk.1,077 crore to capital expenditures, including Tk.712 crore for ICT hardware and Tk.355 crore for specialized software. The remaining funds will cover consultancy services and staff training to build institutional capacity.
Additionally, the project seeks to fortify state-owned banks, strengthen the Deposit Insurance Trust Fund and reduce payout times for depositors during bank restructurings.
While the Planning Commission endorsed the project to improve overall financial stability also official documents do not outline specific quantitative targets for reducing defaulted loans.
