Bangladesh will receive $ 1 billion in loans from the World Bank to tackle the ongoing liquidity crisis in the country. The World Bank is likely to approve the loan by December of this year.  Bangladesh Central Bank must comply with four conditions put forward by the World Bank to receive the financial assistance.

These four conditions are

• Establishing a framework for asset management companies to recover loans from non-performing banks and financial institutions.
• Making policies and determining the beneficiaries of loans.
• Defining the scope of forensic audits for Banks and Financial institutions.
• Forming a department within Bangladesh Bank for regulatory enforcement.

World Bank officials in a meeting with Bangladesh Bank governor Ahsan H Masur on Sunday said that the assistance will be available in two phases $750 million in phase 1 to initiate policy reforms and in phase 2 remaining $250 million of the loan will be available for investment and guarantee facilities.

Asian Development Bank (ADB) has also given the green light to provide $1.5 billion in loans. However, similar conditions to those of the World Bank were put forward by ADB. Following the ousting of Sheikh Haseena and the fall of the Awami League Government, the interim government has taken the responsibility of reforming the banking system to make it investment-friendly. Husne Ara Shikha, the Director and Spokesperson of Bangladesh Central Bank, said that 50 per cent of the reforms have already been done.