Financial Sector Support Project II

pipeline

The Financial Sector Support Project II (FSSP II) is a critical intervention at a pivotal moment for restoring Bangladesh’s financial stability. It directly supports urgent banking sector reforms by strengthening the financial safety net, enhancing the regulator’s supervisory capacity, and facilitating bank restructuring and resolution. These efforts aim to improve the authorities’ preparedness for and management of the current banking sector crisis, paving the way for the resolution and restructuring of weaker banks. Aligned with Bangladesh Bank’s priorities and supported by the World Bank’s long-standing technical assistance and development policy credit (DPC) operation, FSSP II contributes to restoring financial stability, strengthening financial intermediation, and supporting Bangladesh’s long-term economic growth. The project will finance technical assistance and IT investments to bolster Bangladesh Bank’s supervisory systems and address governance and enforcement weaknesses. FSSPII will also support reforms and actions in three areas: (1) strengthening the Deposit Protection Scheme (DPS) and recapitalizing the Deposit Protection Fund (DPF); (2) supporting the design and establishment of the Resolution and Restructuring Fund (RRF) to guide bank resolution; and (3) facilitating State-Owned Bank reforms through a comprehensive reform strategy.