The Asian Development Bank (ADB) and the World Bank are expected to provide funds to Bangladesh for banking sector reforms, including strengthening and modernising the central bank.

The decision came following two separate meetings at the Bangladesh Bank (BB) headquarters on Monday between central bank officials and delegations of the ADB and World Bank.

The ADB is likely to disburse $1.3 billion towards Bangladesh's efforts to reform the banking sector and modernise the BB, central bank officials who attended the meetings told The Daily Star.

They added that the fund is likely to be distributed across three years, with $500 million coming in the first year, $500 million in the second year and $300 million in the third year.

They further said the World Bank is likely to disburse $400 million for banking reforms, including modernisation and capacity-building of the central bank.

The World Bank delegation wanted to know more about the planned banking reforms, so central bank Governor Ahsan H Mansur described the initiatives to them, according to the officials.

The ADB delegation met with the central bank's Financial Sector Support and Strategic Planning Department, but other senior officials were also present at the meeting.

On the other hand, the World Bank delegation met with the central bank governor while senior officials from the Banking Regulation and Policy Department, and the Department of Offsite Supervision were present.

Contacted, Md Habibur Rahman, deputy governor of the central bank, told The Daily Star that the ADB and World Bank would provide technical and other required support to reform the banking sector.

After joining as central bank governor, Mansur, a prominent economist, has moved swiftly to reform the banking sector, which became plagued by irregularities and scams during the previous government's rule.

The central bank has already reconstituted the board of directors of 11 banks.

When the Awami League won the first of four consecutive elections in 2008, non-performing loans in the banking sector stood at Tk 22,480 crore.

By the end of June this year, the amount had soared to over Tk 200,000 crore, accounting for over 12 percent of total disbursed loans in the banking system, as per Bangladesh Bank data.