Published: 11:12 AM, 01 October 2026
Ecnec approves Tk1,276cr project to overhaul banking-sector supervision
The Executive Committee of the National Economic Council (Ecnec) on Tuesday approved a Tk 1,276 crore project aimed at strengthening banking-sector supervision, enhancing financial safety nets, modernising technological infrastructure and building institutional capacity for bank resolution and restructuring.
Titled “Financial Sector Support Project-II,” the five-year initiative will be implemented by Bangladesh Bank from July 2026 to June 2031, with primary financing coming from the World Bank’s International Development Association (IDA).
The project comes as Bangladesh’s banking sector faces mounting challenges, including a high level of non-performing loans, weak corporate governance, capital and liquidity pressures in several banks, and technological shortcomings that have increased vulnerabilities across the financial system.
According to project documents, nearly 33 percent of bank loans are currently classified as non-performing, underscoring the need for stronger supervision, improved risk management and institutional reforms.
Of the project’s total allocation, Tk 1,077 crore has been earmarked for capital expenditure. This includes Tk 712 crore for information and communication technology (ICT) hardware and Tk 355 crore for specialised banking software and database architecture.
The project will also finance extensive training, technical assistance and consultancy services to strengthen the capacity of banking-sector supervisors and other relevant institutions.
Particular emphasis will be placed on addressing emerging risks, including cyberattacks, increasingly complex financial transactions and cross-border financial activities.
Under the project, performance-based conditions will be introduced to strengthen the Deposit Insurance Trust Fund, improve the mechanism and timeline for paying depositors, and enhance the framework for bank restructuring and resolution.
The initiative also seeks to promote stronger corporate governance in state-owned commercial banks, according to the project documents.
Planning Commission officials said the reform measures would contribute to strengthening systemic financial stability while helping restore confidence among depositors and other stakeholders in the banking sector.
The Ecnec meeting, chaired by Prime Minister Tarique Rahman at the Bangladesh Secretariat, approved a total of 13 development projects involving Tk 15,823.57 crore.
Of the overall allocation, Tk 10,188.33 crore will come from government funds, Tk 5,252.96 crore from foreign loans and Tk 451 crore from the implementing agencies’ own resources.
The committee also approved the third revision of the Hazrat Shahjalal International Airport expansion project, raising its total estimated cost to Tk 22,213 crore from Tk 21,365.51 crore under the second revision.
Planning Commission observations attributed the latest increase to additional maintenance expenses, the incorporation of new physical components and contractual price adjustments.
Several projects in the health sector also received approval. These include initiatives aimed at combating tuberculosis, HIV/AIDS and malaria, as well as a revised project for the establishment of Patuakhali Medical College and Hospital.
In the social welfare sector, Ecnec approved projects to expand training facilities and hostel accommodation for people with physical and intellectual disabilities in Chattogram, Khulna and Rajshahi.
The meeting also sanctioned funding for flood management in the Bamni River Basin and riverbank protection works along the Meghna River in Bhola, reflecting continued government efforts to strengthen climate and disaster resilience.
Other approved initiatives include digital land-management surveys in three city corporations, rural infrastructure development in Madaripur, Shariatpur and Rajbari, land acquisition for a solar power plant in Sonagazi, and expansion of electricity-grid infrastructure across the Chittagong Hill Tracts.
The approval of the Financial Sector Support Project-II comes at a crucial juncture for Bangladesh’s financial sector, with the project expected to combine technological modernisation with institutional reforms to improve oversight, strengthen depositor protection and enhance the authorities’ capacity to respond to banking-sector distress.
