Published: 01:31 AM, 15 September 2026
BDT 1,276 crore ticked off to fix up financial sector
A technical assistance project worth Tk 1,276 crore 30 lakh has been undertaken to make the country's financial sector more stable by addressing challenges such as non-performing loans, governance deficiencies and outdated technology systems.
The main objectives of the project are to strengthen the safety net of the financial sector, modernize technology-based banking systems, and support ongoing banking-sector reforms.
The project, titled the "Financial Sector Support Project-2" (FSSP-2), is awaiting approval from the Executive Committee of the National Economic Council (ECNEC). The ECNEC meeting is scheduled to be held on September 16 at the Bangladesh Secretariat. Prime Minister and ECNEC Chairman Tarique Rahman is expected to preside over the meeting. The project will be placed before the committee for approval.
Bangladesh Bank, under the Financial Institutions Division of the Ministry of Finance, will implement the project over a five-year period. The project duration has been set from July 2026 to June 2031.
Of the project's total cost, Tk 1,261 crore 54 lakh will come as foreign financing from the World Bank's International Development Association (IDA). The remaining Tk 14 crore 76 lakh will be provided from Bangladesh Bank's own funds.
A senior Bangladesh Bank official told reporters that the project has been taken up with the aim of strengthening the financial sector's "safety net," enhancing the capacity of technology-based banking, and supporting ongoing reforms in the banking sector.
He said that under the project, information and communication technology (ICT) infrastructure and supervisory capacity will be modernized, institutional capacity will be strengthened, procurement processes related to ICT infrastructure will be improved, and necessary consultancy services will be procured.
In addition, the project will strengthen the financial capacity of the Deposit Insurance Trust Fund (DITF), reduce the time required for payouts, and support the effective implementation of bank resolution and restructuring. Increasing good governance and financial stability in state-owned banks is also one of the project's key objectives.
According to the project document, Bangladesh's financial sector is undergoing rapid changes due to the modernization of the banking system, increasing global competition, and growing domestic demand for financial services. However, high levels of non-performing loans, weak governance, outdated ICT systems, and limited technological capacity remain major challenges.
The document further states that weaknesses in the ICT infrastructure used for financial-sector supervision, along with the lack of an integrated information management system, are hampering the country's ability to address emerging risks such as cyberattacks and cross-border financial risks. These problems are also affecting depositors' confidence as well as the country's financial and economic stability.
FSSP-2 has been undertaken as a continuation of the Financial Sector Support Project previously implemented by Bangladesh Bank with assistance from the World Bank. The new project will seek to restore long-term stability to the financial sector.
The project has three major components: improving supervisory capacity and systems; strengthening the financial sector's safety net and supporting bank resolution and restructuring; and providing support for project implementation.
The second component places particular emphasis on strengthening the financial sector's safety net, bank resolution and restructuring, and reforms of state-owned banks.
A significant portion of the project's budget will be spent on technology modernization. The proposed allocation includes Tk 711 crore 72 lakh for the procurement of ICT equipment, Tk 355 crore 36 lakh for computer software, and Tk 7 crore 64 lakh for databases. Funds will also be allocated for the purchase of other ICT and office equipment.
The Planning Commission has recommended the project for approval by ECNEC. According to the commission, the project will strengthen the financial sector's safety net, technology-based banking, banking reforms, bank resolution, and restructuring activities. Ultimately, this will further reinforce financial stability in the banking sector.
The project proposal was submitted to the Planning Commission in October 2025. Subsequently, a meeting of the Special Project Evaluation Committee (SPEC) was held on November 23 of the same year. Later, the revised TAPP was submitted to the Planning Commission in May this year for further processing.
