Financial Institutions Development

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The Financial Institutions Development Project (FIDP) will promote the development of non-bank financial institutions (NBFIs) in particular, and, investments as a whole. Since the potential for NBFIs risk of contagion exists, rigorous measures will be applied. The project consists of two main components: 1) The resource mobilization component will aim at simplifying market regulations to facilitate bond and security issues, creating and developing market oriented mechanisms. Rules and procedures for bonds/debentures will be developed and implemented, raising funds and strengthening marketing of government treasury bonds. Both the Bank of Bangladesh and the Securities Exchange Commission will receive training on debt instruments, and, reforms will be implemented on the government's national saving schemes. Furthermore, this component will develop procedures for a secondary treasury bond/bill market. 2) The component to strengthen financial institutions will create the Credit, Bridge and Standby Facility (CBSF), to encourage term financing, through a more efficient financial system. The CBSF will, not only facilitate funding to NBFIs, and financial institutions, but will be institutionally strengthened through management and financial technical assistance. The financial institutions' capacity, will be enhanced through business planning, and resource management. This component will also revise CBSFs mechanisms.