The government yesterday declined financing from the World Bank for a project on modernisation of state-owned financial institutions as the prime minister has reservations about external involvement in the matter.

The Washington-based multilateral lender was supposed to provide 70 percent of the funds for the Tk 1,580-crore project, under which the state-owned banks would be automated and cybersecurity enhanced among others.

The project was placed in yesterday's meeting of the Executive Committee of National Economic Council, which was attended by Prime Minister Sheikh Hasina.

Upon seeing the project proposal, Hasina said there is no need to improve the security of the country's own institutions with foreign money, according to meeting sources. The project was then withdrawn.

She said the institutions have enough money and their security has to be ensured by the local experts using those funds. Hasina then directed the Economic Relations Division to see if the WB money can be used in other projects.

After the meeting, Planning Minister AHM Mustafa Kamal told reporters that the government itself can do the work of enhancing the state banks' cybersecurity and hence no external involvement is necessary.

Agrani Bank Chairman Zaid Bakht said the country has acquired sufficient expertise to ensure cybersecurity.

However, for training the manpower external know-how can be taken, he said, adding that if low-cost fund is available for the project it can be accepted. But the government must attach condition that it will have the absolute authority in selection of foreign consultants.

It is difficult for the government-owned institutions to implement the projects with own funds as the excess liquidity lying with the banks is depositor's money, said an official of another state-owned bank.

“Most of the government-owned financial institutions are loss-making concerns, so it is difficult for them to implement projects of such scale,” he added.

At the yesterday's meeting, seven new and revised projects involving a total of Tk 7,890 crore were passed. Of the amount, more than Tk 4,000 crore will be provided by the development partners.