A fresh World Bank loan of US$750 million for policy update may be forthcoming for Bangladesh in addition to a $250-million investment credit currently being processed, central bankers said Sunday after talks.
A WB delegation proposed the policy-based loan, conditional upon implementation of certain policy measures by the Bangladesh Bank (BB), they said after the talks with the World Bank team hot on the heels of another meet with a US delegation.
The proposal was discussed during the meeting between WB representatives and BB Governor Dr Ahsan H. Mansur, accompanied by other senior officials, at the central bank's headquarters in Dhaka.
The discussions focused on a comprehensive review of asset quality of the banking industry and strategies for recovering assets tied to non-performing and defaulted loans that have ballooned over recent years.
The World Bank team emphasized evaluating the recoverability of these assets.
Another meeting took place on the day between Bangladesh Bank officials and a US delegation led by Brent Neiman, Assistant Secretary of the US Treasury, discussing banking-and financial-sector situations.
The high-powered delegation from the United States held extensive talks on the day with the post-uprising interim government's high-ups, including the Chief Adviser, on issues that include overall reforms, resetting the economy and recovery of siphoned-of assets.
However, the main consultation of the central bank was with the World Bank delegation, led by its regional director, Mathew A. Verghis, when they met with BB Governor Dr Ahsan H. Mansur and senior bankers.
Key participants from the WB side included Abdoulaye Seck, Country Director for Bangladesh and Bhutan; Hoon Sahib Soh, Practice Manager; Gabi George Afram, Practice Manager, Frederico Gil Sander, Global Practice Manager, and Souleymane.
The World Bank team is scheduled to meet with the central bank again tomorrow (Tuesday) as part of their comprehensive mission regarding development and reform assistance and programmes. These discussions are centered round financial-sector reforms and a financial-sector project currently in preparation.
"The World Bank team showed intention about an in-depth analysis of asset quality of the banking sector to determine their recoverability," said an official who attended the meeting. The Washington-based multilateral development financier also expresses interest in collaborating with Bangladesh Bank to develop asset-recovery plans, offering their expertise to support these efforts.
"In all meetings, we are in favour of reforms in the banking sector. Bangladesh Bank itself also needs reforms to deliver more services to the people," added the official, who wished to remain anonymous, referring to the WB and US-delegation meetings.
jasimharoon@yahoo.com