PRESS RELEASE

World Bank Helps Bangladesh Modernize State-Owned Banks for Better Performance

June 30, 2016

WASHINGTON, June 30, 2016—The World Bank today approved $150 million in financing to modernize and increase the transparency and efficiency of Bangladesh’s 10 state-owned banks, including the two development banks. Through improving the corporate governance, Information Technology systems, risk management, decision-making, and operational processes, the financing will help the state-owned banks become more efficient and competitive.   

The Modernization of State Owned Financial Institutions Project will improve performance of the state-owned banks that together account for 30 percent of total banking sector assets by automating the business and transaction processes. The project will implement a modern IT infrastructure to support stronger cyber security, centralized processing, branch connectivity, an enterprise wide e-mail system, and ATM network, among others. The project will further help improve bank data quality, develop better financial reporting systems and strengthen internal resource management and control, including staff training.

“A well performing banking sector is important for building a strong financial sector,” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal. “The project will help improve governance and efficiency of the state-owned banks, which will lead to better performance and sustainability. This, in turn, will help Bangladesh maintain good macroeconomic and fiscal management.”

The project will introduce the management concept of Business Process Reengineering to analyze and redesign workflows in order to improve processes and automate some tasks. It will also provide advisory services to the banks and the Ministry of Finance to improve the decision-making and operational processes, governance, and change management. The project will also enhance the capacity of the Bank and Financial Institution Department.

“The state-owned banks in Bangladesh contribute to employment generation, and financial inclusion of the underserved segments of the market, including the small and medium enterprises, farmers, and youth.” said Shah Nur Quayyum, World Bank Team Leader for the Modernization of State Owned Financial Institutions Project. “Through modernization, the project will lay the foundation for a stronger governance and accountability of the state-owned banks.”

The credit from the World Bank’s International Development Association, which provides grants or zero to low interest loans, has a 38-year term, including a six-year grace period, and a service charge of 0.75 percent. With this financing, the World Bank’s total new commitments in Bangladesh in the financial year 2016, which ends on June 30, stand at $1.56 billion.

Media Contacts
In Dhaka
Mehrin Mahbub
Tel : (880-2) 8159001
mmahbub@worldbank.org
In Washington
Yann Doignon
Tel : + 1 202-473-3239
ydoignon@worldbank.org



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