Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Bangladesh hopes for finalisation of a pre-assured $500 million worth of budgetary-support loan and extended financial assistance from the Asian Development Bank (ADB) at its upcoming annual meeting in Italy.
Finance Adviser of the current interim government Dr Salehuddin Ahmed would lead the Bangladesh delegation that is scheduled to sit with ADB President Masato Kanda on the sidelines of the annual meet, starting today (Sunday) in Milan, Italy, Economic Relations Division (ERD) officials said Saturday.
"The adviser would also meet some other top executives of the ADB and appeal for the extended financial support as Bangladesh needs huge investment for its reforms and infrastructure development," a senior ERD official told the FE.
Earlier, the Manila-based lender had assured Bangladesh of a $500-million budget support for financing banking-sector reforms, said the official.
"Bangladesh delegation, headed by the finance adviser, would join the ADB's annual meeting in Milan. The team will seek extended financial support from the development partner (DP)," SM Jakaria, additional secretary at the ERD, told this correspondent last week.
"ADB is now our biggest multilateral DP wherefrom Bangladesh expects higher financial and technical supports for the country's development," he added.
He said the finance adviser would meet the ADB president on the sidelines of the annual meeting, to be held on May 4-7, and would request him to widen the support in the coming years, Mr Jakaria said.
Another ERD official said the Bangladesh side would request the ADP President and its executives to speed up at least the assured $500- million budgetary-support- finalisation process.
Bangladesh wants the budget -support credit disbursement within this fiscal year (FY) 2024-25 that ends on June 30, he added.
Meanwhile, Bangladesh's interim government has completed negotiations with the ADB for getting the $500-million package for the banking sector as some banks seemed in disarray following past forged lending and NPL buildups.
However, the government had expected that the budgetary-support proposal would be cleared at the ADB board meeting in April and then a loan agreement would be signed immediately.
Bangladesh's financial sector has been "destroyed by the ousted Sheikh Hasina government and her associates through violating the banking regulations, looting hundreds of billions of takas and laundering billions of dollars", the officials deplored.
The banking-sector non-performing loans (NPLs) are rated to be on the highest level in the history of Bangladesh.
The ratio of NPLs had reached 20.20 per cent of the total outstanding loans in the banking sector till December last year, central bank's data showed.
"At least a dozen commercial banks appear in the red category for their vulnerability with their huge NPLs, deposit shortfalls and scams in operations," said the official.
Another ERD official says the proposed $500 million will be under the subprogramme-1 of the 'Banking-sector reform-policy-based lending' by the ADB.
Another $500 million (Subprogramme-2) is likely to be processed after the success of this sub-programme, he added.
The Manila-based lender has already provided some reform proposals to the Bangladesh government regarding the financial sector and relevant others for getting the budgetary support, the ERD official said.
The ADB has emerged as the largest DP in the current FY2025 as it has so far (July-March) provided $1.226 billion worth of foreign aid, the highest compared to that of other DPs.
On December 18 last year, the ADB provided $600 million worth of budget support titled 'Strengthening Economic Management and Governance Programme, Subprogramme 1' to support Bangladesh's preparation for graduation from the least-developed country (LDC) status.
kabirhumayan10@gmail.com