Negotiations for the credit will take place next month when an appraisal mission visits Dhaka to finalise the assistance. Then it will be referred to the WB board for approval. Disbursement is expected in early 2004.

The donor-prescribed reforms include divestment of SoEs, modernisation of banks, downsizing the NCBs through golden handshake, branch rationalisation and creating employment for the retrenched staff of the NCBs and SoEs.

The World Bank's International Finance Corporation (IFC) and Small Enterprise Development Fund (SEDF), and the UK Department for International Development (DFID) will jointly provide the assistance while International Monetary Fund (IMF) will monitor the implementation of the reforms.

The IMF mission for poverty reduction growth facilities (PRGF) loan which left Dhaka on Friday ending a 12-day visit, also reviewed the progress of ongoing NCB and SoE reforms in Bangladesh.

So far two WB-led pre-appraisal missions have visited Bangladesh to negotiate with the government on the assistance. The last mission which visited from September 9-19 comprised representatives from all donor agencies involved in the programme.

At the request of the government, the pre-appraisal mission sought to focus more correctly on the growth and modernisation elements of the proposed programme, said a draft aide-memoire submitted to the government in early October.

In support of the government's own home grown and pro-active reform agenda, the WB wishes to provide clear and substantive financial assistance to underwrite the government's own agenda of reforms, the draft said.

The WB may provide $370 million and DFID $75 million for the programme.

The WB funding will include $290 million for support for voluntary retirement schemes, $38 million for banking reform, $10 million for enterprise growth, $20 million for refurbishment of assets, $4 million for institutional strengthening, and $5 million for retraining and counselling for retrenched staff.

The IFC may facilitate the privatisation of Rupali Bank by investing equity alongside a strategic investor at the time of privatisation.

It could also explore the possibility of providing a pre-privatisation loan to Rupali Bank which could be convertible into equity at IFC's option during the divestment, the aide-memoire mentioned.

The IFC can also consider investments in the oil companies, included in the privatisation list, at the time of privatisation depend on usual due diligence.

The SEDF will assist the government in achieving its employment and growth objectives, human resource development, small enterprise development and business development services.