The Asian Development Bank (ADB) and the government signed yesterday a US$ 3 million loan agreement to improve governance in the capital market and insurance sector. Economic Relation Division (ERD) Secretary Md Aminul Islam Bhuiyan and ADB Country Director Hua Du signed the agreement on behalf of their respective sides. Visiting Director General of ADBs South Asia Department Kunio Senga was, among others, present on the occasion.

The project will help strengthen governance, regulation and supervision of the capital markets, boost the regulators capacity and recommend increasing demand for and supply of securities by addressing the market gaps. It will also support governmentled reforms being pursued in the insurance sector, including a revamp of the insurance legislation and the establishment of a new regulatory authority based on international best practices.

Despite recent pickup, the capital market in Bangladesh remains underdeveloped with market capitalisation of only 7.5 percent of the GDP, Hua Du said.

The Finance Division of the finance ministry will implement the project.