Dhaka urges WB to divert $150m loan to any other project

Dhaka,  Thu,  21 September 2017
Published : 21 Apr 2017, 00:41:54

Dhaka urges WB to divert $150m loan to any other project

FHM Humayan Kabir

The government has requested the World Bank (WB) to divert its US$150 million loan meant for modernising state-owned commercial banks (SoCBs) and financial institutions to another project, officials said Thursday.

The Executive Committee of the National Economic Council (ECNEC), headed by the Prime Minister, in its April 04 meeting refused to endorse the $150 million (Tk 15.80 billion) WB loan for the project.

Prime Minister Sheikh Hasina at the meeting said Bangladesh will not welcome any foreign support for a project that is related to online and cyber security.

She directed the Economic Relations Division (ERD) to take initiative to divert the WB fund to any other project in the country.

The Bank and Financial Institutions Division was supposed to implement the bank modernisation project at an estimated cost of Tk15.80 billion, where the government negotiated with the WB for receiving $150 million as project assistance.

"We have recently written to the World Bank to divert the $150 million fund to any other suitable project," said a senior ERD official.

Bangladesh's central bank suffered its worst $101 million reserve heist last year due to cyber hacking.

After the incident, the government has become extremely cautious to take any foreign assistance for its commercial bank and financial institution modernisation programme, especially to improve their cyber security, officials said.

The ERD senior official said the government has now better relations with the WB, the country's largest development partner.

According to the project, the WB was supposed to  improve nine SoBs' operations, especially cutting their credit risks and non-performing loans (NPLs) and ensuring secure transaction and operation system.

The WB provides nearly $800 million every year for developing Bangladesh's infrastructure and cutting incidence of poverty.

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