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WB to provide $100m to upgrade state banks’ tech infrastructure

  • Published at 07:39 pm August 12th, 2013
WB to provide $100m to upgrade state banks’ tech infrastructure

The World Bank has expressed the interest to provide US$100m to help upgrade technological infrastruc-ture of the state-owned commercial banks – Sonali, Janata and Agrani.

The fund is likely to be provided as budget support for the current fiscal year and finalised immediately after a visit of the bank’s vice president for South Asia Philip Harran to Dhaka in October, said a senior official of banking division of the finance ministry.

The development emerged at a meeting between the banking division and a World Bank mission on finan-cial sector monitoring last week. The budget support for the banking and other sectors were also discussed at the meeting.

The mission pointed out the lack of technological infrastructure to support online banking by the state-owned commercial banks, official sources said.

“We sought technological support from the World Bank as the state-owned commercial banks lack online banking technology,” Banking Division Secretary Dr M Aslam Alam told the Dhaka Tribune.

He said the financial support by the World Bank might come in the form of budget support or direct support.

Most of the businesses of the state-owned banks have taken away by the private commercial banks, he pointed out.

The secretary also cautioned about the World Bank’s tough conditions of the development project and said it is not easy to execute the conditions of the development project.

A Bangladesh Bank executive said the market share of the state-owned commercial banks is declining de-spite prescriptions by the central bank on strengthening their operations, particularly in rural areas through boosting loan recovery drives.

According to the central bank data in 2011, the state-owned commercial banks held 27.8% of the total in-dustry assets as against 28.5% in 2010 while PCBs share rose to 60% in 2011 from 58.8% in 2010.