World Bank approves $500m financing to support Bangladesh’s transparency and financial stability reforms

The World Bank has approved $500 million in financing to help Bangladesh strengthen transparency, accountability, and stability in its public institutions and financial sector.

The Strengthening Governance and Institutional Resilience Development Policy Credit aims to support critical public and financial sector reforms essential for sustained economic growth. The initiative will also help lay the foundation for improved service delivery to vulnerable households.

"Improvements in how public finances are managed are important for Bangladesh's economy to grow sustainably. The government is taking ambitious steps to make its institutions more open and answerable, so they can serve the people better," said Gayle Martin, World Bank Interim Country Director for Bangladesh. "This financing will support the government's efforts to strengthen its policies and regulatory framework to build a stronger, more inclusive economy that benefits everyone. Through another project approved last week, we are supporting the government to implement these reforms."

Bangladesh currently has one of the lowest revenue-to-GDP ratios among middle-income countries, limiting the government's ability to deliver quality public services. The financing will support reforms aimed at improving domestic revenue mobilisation, including steps to make tax administration and policy-making more transparent and efficient, in line with international best practices. A key component will require all tax exemptions to receive parliamentary approval—moving away from ad hoc practices.

The programme will further support corporate governance and risk management improvements by aligning financial reporting with international standards and enhancing transparency. Financial sector stability will be bolstered by granting Bangladesh Bank a full range of resolution powers to manage vulnerabilities in the banking sector.

Reforms will also target improved public sector transparency and accountability. By 2027, all government project appraisal documents will be made public. The public procurement system will be required to use electronic government procurement (e-GP), disclose beneficial ownership, and remove price caps to foster competition and mitigate corruption risks. The auditing capacity of the Office of the Comptroller and Auditor General will be strengthened to further enhance accountability.

The independence of the Bangladesh Bureau of Statistics will be enhanced, contributing to better data transparency and improved service delivery. Meanwhile, social protection will be strengthened through the operationalisation of a dynamic social registry to improve targeting of cash transfer programmes for the poor and vulnerable.

"This financing is closely aligned with citizens' aspirations for greater transparency and accountability. It will support Bangladesh's ambitious reform agenda to enhance domestic revenue mobilisation, financial sector stability, governance, and public sector performance," said Dhruv Sharma, World Bank Senior Economist and Task Team Leader for the project. "Improving data systems and selection of beneficiaries will ensure government resources effectively reach poor and vulnerable households, especially during economic shocks and natural disasters."

With this financing, the World Bank's total new commitments to Bangladesh in FY25 stand at $3.07 billion. Since Bangladesh's independence, the World Bank has committed over $46 billion in grants, interest-free, and concessional credits to support the country's development journey.