By Waliur Rahman Miraj In Dhaka

The World Bank has said it will increase financial assistance to Bangladesh in recognition of the government's progress in reforming the economy.

The Bank's country director in Bangladesh, Frederick Temple, told reporters in Dhaka that an aid package of more than $500m is expected to be approved at the Bank's board meeting next month.

He said the government in Bangladesh had achieved substantial progress in stabilising the economy since it came to power in 2001.

Steps have been taken to reform the ailing banking sector, close down loss-making state-run manufacturing units and reduce losses in the power sector, he said.

But Mr Temple said there were many things still needing to be done to ensure good governance, improve law and order and stop corruption.

Although he said the World Bank would continue to consider more financial assistance for Bangladesh, he cautioned that future aid levels would depend on the government doing more on good governance.