Bangladesh Bank Essay

Bangladesh Bank is the Central bank of Bangladesh. It is the monetary authority of the country. It came into existence under the Bangladesh Bank Order 1972 (Presidential Order No. 127 of 1972) which took effect on 16 December 1971. Through this order, the entire operation of the former State Bank of Pakistan in the eastern wing was transferred to Bangladesh Bank. Bangladesh Bank has 9 branch offices, two in Dhaka city (Sadarghat and Motijheel), and one each in Chittagong, Khulna, Rajshahi, Sylhet, Bogra, Rangpur and Barisal.

The head office discharges its duties with 28 departments. * Objectives: As the central Bank of Bangladesh, the broad objectives of the Bank are : * To regulate currency issuance and to keep foreign exchange reserves. * To manage the monetary and credit system of Bangladesh with a view to stabilizing domestic monetary value. * To preserve the par value of the Bangladeshi Taka. * To promote and maintain a high level of production, employment and real income in Bangladesh; and to foster growth and development of the country’s productive resources. To reserve all the rights of the bank. * Functions Bangladesh Bank performs all the functions that a central bank of any country is expected to perform, and such functions include maintaining the price stability through economic and monetary policy measures, managing the country’s foreign exchange and the gold reserve and regulating the banking sector of the country. Like all other central banks across the globe, Bangladesh Bank is both the Government’s banker and the banker’s bank, a “Lender of the Last Resort”.

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Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. Except for the 1 and 2 taka notes, it issues all other denominations of Bangladeshi Taka. Bangladesh Bank is empowered to act as the watchdog of the country’s banking system, and all scheduled banks are accountable to Bangladesh Bank, which has extensive powers to ensure soundness of the banking system. No bank can commence banking business in Bangladesh and no existing bank can open a new branch in or outside the ountry or shift any branch from one place to another without obtaining a license/permission from the Bangladesh Bank. * Organization The highest official in the bank is the Governor (currently Dr. Atiur Rahman). The Governor chairs the Board of Director. The Executive Staff, also headed by the Governor, are responsible for the day to day affairs. * Information from the website: Bangladesh Bank conducts a very informative and well built website.

On the home page of Bangladesh Bank’s website, we find information on the following topics; * Publications: Under the publications section, there are 6 more subheadings; * A monthly update of the major economic indicators: the information here has been published by the Monetary Policy Department of Bangladesh. The information is displayed in a detailed report format, and given in a separate file, usually a pdf file. The report describes the Monetary and credit developments in the recent month.

It also shows the recent updates on: Reserve money developments, Liquidity position of scheduled banks, Agricultural credit, Industrial term loans, Outstanding position of SME loans, Public finance, Government tax revenue collections, Sale and repayment of NSD certificates, Budget financing, Capital market developments, Imports, Import payments, import L/C settlement and import LCs opened, Sector-wise fresh opening, settlement and outstanding L/Cs, Projected data on opening of import LCs and probable liabilities against BTB LCs of scheduled banks.

Not only that the report also shows detailed recent developments in Bangladesh’s Exports, the annual and monthly trends in exports and also the category-wise break-down of exports. Moreover, the report has information on Remittances, Foreign exchange holdings abroad, Balance of payments, Foreign aid, Industrial production, Food situation, CPI and inflation. Lastly, the report about the monthly updates on the major economic indicators of Bangladesh would not be complete without information on the Financial sector prices, which is usually the last section of the report (Apart from the appendix).

For instance, the summary of the most recent monthly updates on the major economic indicators are as follows; * Broad money recorded an increase of Tk. 46541. 10 crore or 15. 70 percent during July-April, 2009-10 against the increase of Tk. 33107. 00 crore or 13. 31 percent during July-April, 2008-09. Of the components of broad money, currency outside banks rose by Tk. 6280. 90 crore or 17. 42 percent and deposits increased by Tk. 40260. 20 crore or 15. 46 percent;of which,demand deposits increased by Tk. 6660. 60 crore or 21. 93 percent and time deposits increased by Tk. 33599. 60 crore or 14. 60 percent.

Domestic credit recorded an increase of Tk. 30933. 00 crore or 10. 72 percent during July-April, 2009-10 against the increase of Tk. 31268. 10 crore or 12. 57 percent during July-April, 2008-09. The rise in domestic credit during the period under report was due to the significant rise of private sector credit by Tk. 38276. 60 crore or 17. 56 percent. In the component of credit to the public sector, credit to the Govt. (net) decreased by Tk. 10408. 10 crore or 17. 89 percent. However, credit to the ‘other public sector’ increased by Tk. 3064. 50 crore or 24. 63 percent. Monetary and credit developments:

Particulars| Outstanding Stock| Changes in Outstanding stock| | June, 2008| June, 2009R| April, 2010P| FY 2008-09| July – April2009-10| April 2010, over April 2009| Domestic Credit| 248677. 20 | 288552. 30| 319485. 30 | 39875. 10(+16. 03)| 30933. 00(+10. 72)| 39540. 00(+14. 12)| Broad Money| 248794. 90 | 296499. 80| 343040. 90| 47704. 90(+19. 17)| 46541. 10(+15. 70)| 61139. 00(+21. 69)| P=Provisional; * Total tax revenue collection during July-March, 2009 – 10 increased by Tk. 6598. 59 crore or 17. 82 percent to Tk. 43624. 47 crore, against Tk. 37025. 88 crore during July-March, 2008 – 09.

The NBR and Non-NBR tax revenue collection during July-March, 2009 – 10 were Tk. 41676. 77 crore and Tk. 1947. 70 crore respectively, against Tk. 35203. 34 crore and Tk. 1822. 54 crore respectively during July-March, 2008 – 09. NBR tax revenue collection during July-April, 2009 -10 increased by Tk. 6865. 07 crore or 17. 16 percent to Tk. 46865. 90 crore against collection of Tk. 40000. 83 crore during July-April, 2008-09. Target for NBR tax revenue collection for FY 2009-10 is fixed at Tk. 61000. 00 crore. Outstanding borrowing of the government through NSD certificates as of end March, 2010 stood at Tk. 58320. 4 crore, recording an increase of Tk. 10069. 25 crore or 20. 87 percent against Tk. 48251. 59 crore as of end March, 2009. * Exports receipts during July-April, 2009 – 10 increased by US$123. 94 million or 0. 97 percent to US$12940. 05 million as compared to US$12816. 11 million during July-April, 2008-09. * Import payments during July-April, 2009-10 increased by US$202. 10 or 1. 05 percent to US $19411. 20 million compared to US$ 19209. 10 million during July -April, 2008-09. Settlement of import LCs during July-April, 2009-10 increased by US$361. 08 million or 1. 97 percent to US$18668. 36 million against US$18307. 8 million during July-April, 2008-09. Fresh opening of import LCs during July-April, 2009-10 increased by US$4537. 92 million or 24. 87 percent to US$22785. 83 million against US$18247. 91 million during July-April, 2008-09. * Remittances receipts during July-May, 2009 – 10 increased by US$1307. 16 million or 14. 90 percent to US$10077. 32 million against US$8770. 16 million during July-May, 2008 – 09. * Gross foreign exchange reserves of the BB stood lower at US$10146. 24 million (with ACU liability of US$254. 53 million) as of end May, 2010, against US$10602. 10 million (with ACU liability of US $682. 7million) by end April, 2010. The gross foreign exchange reserves, without ACU liability is equivalent to import payments of 5. 23 months according to imports of US$1892. 43 million per month based on the previous 12 months average (May, 2009-April, 2010). Gross foreign exchange balances held abroad by commercial banks stood higher at US$516. 42 million by end May, 2010 against US$475. 79 million by end April, 2010. This was also higher than the balance of US $456. 41 million by end May, 2009. * The annual average rate of inflation (12-month annual average CPI, 1995-96=100) increased to 6. 6 percent in March, 2010 from 5. 95 percent of February, 2010. The rate of inflation on point to point basis moderated to 8. 78 percent in March, 2010 from 9. 06 percent of February, 2010. * Bangladesh Bank Quarterly January-March 2010. The editor is Mr. Dr. Md Akhtaruzzaman, General Manager, PAU with Co-editor: Dr. Md. Habibur Rahman, Deputy General Manager, BBTA and the Co-ordinator: Md. Ezazul Islam, Joint Director, PAU. The names of the other 9 team members are also given. The quarterly report published by Bangladesh Bank can also be bought; the price is given in domestic currency and also in USD and Pound sterling.

The monthly publication is called “Economic Trends”. There are three quarterly publications, “Bangladesh Bank Bulletin”, “Scheduled Banks Statistics”, and “Bangladesh Bank Quarterly”. There is one half yearly publication called; “Financial Sector Review”. The four yearly publications are: “Import Payment”, “Export Payment”, “Co-operative Bank Statistics” and “Annual Report”. there are three casual publications which are: “Balance Sheet Analysis of Joint Stock Companies”, “Impact of the Global Financial Crises and Recessionary Conditions in the Region”, “How to Approach Banks”.

Moreover, there is also a complimentary publication called, Balance of Payments (Annual), which is for free. * Fortnightly statement of trends of major economic indicators. In this section another detailed document is provided by the Monetary Policy Department of Bangladesh, showing the fortnightly statement of the major economic indicators in Bangladesh, such as the changes in Money and Credit, Government Financing, External sector and Price Index. * Annual Report in Bangla of the most recent year is given. Bangladesh Bank Strategic Plan 2010-2014. The strategic plan made by Bangladesh Bank is shown in another separate file, which has in detail the following topics; Vision, Mission statement and Core values, Outline of the Strategic Plan, the Process flow, Strategies listed for adoption, Strategic Action Plans 2010-14. There is also a SWOT analysis, Critical Success Factors in implementing strategic plans, the stakeholders, and the stakeholder’s feedback, List of Head office Departments and Branch Offices, List of acronyms.

There is also a Photo gallery. * A weekly update of some selected indicators: in this section, a weekly update on some of the selected economic indicators is available, such as; the foreign exchange reserve (in US $), Taka- Dollar exchange rate, Call money rate, overall share price index, wage earners Remittance (in US $), the total import, export, current account balance, tax revenue, Investment in National Savings Certificates (Tk. n crore), Reserve Money and Broad Money(M2), Total domestic credit, L/C Opening and Settlement, Rate of Inflation on the basis of Consumer Price Index for National (Base:1995-96=100), Classified loan, Agricultural credit, Industrial term loan and GDP growth rate. * Governor’s Speech: in this section, the governor’s speech has been given, which was delivered in different famous national and International events such as, the Inaugural Ceremony of National Women Entrepreneur Conference and the 39th ACU Board Meeting held in Thimpu, Bhutan.

Links to many such speeches have been given for the duration June 08 2009, to June 22nd 2010. * Circulars/ Circular Letters: many circulars are also given in this section. for instance the latest circular is, ACD Circular Letter No. 1 and the DFIM Circular No. 06: Updated Guideline on ICT Security for Banks and Financial Institutions. * Career: different advertisements for government sector’s job vacancies are given; such as the most recent one is for the appointment of retainer lawyer on contract basis for the Law Department. Tender: Tenders through electronic media (e-Tenders) are invited for Construction of 3rd Floor (Vertical Extension) of Police Barrack Building having 6-storied Foundation at Bangladesh Bank Head Office Premises, Dhaka. The bid can be conducted online. On the right hand of the homepage, in a column the current exchange rates are shown, BDT to USD and BDT VS GBP and Euros. The exchange rates of Taka for inter-bank and customer transactions are set by the dealer banks themselves, based on demand-supply interaction.

The Bangladesh Bank is not present in the market on a day-to-day basis and hence they undertake purchase or sale transactions with the dealer banks only as needed to maintain orderly market conditions. The exchange rates are used as reference rates to purchase or sale transactions for Bangladesh Bank with Government or different International Organization. But USD/BDT buying and selling rates represent previous day interbank market’s highest and lowest exchange rates. Recent Reference Exchange Rates: | | | | | | | | | | Currency| Buying| Selling| 27th June, 2010| A. USD/BDT Rates (based on interbank transaction)| USD| 69. 4100| 69. 4250| B. Cross Rate| SGD| 50. 0072| 50. 0866| SEK| 8. 9914| 8. 9961| JPY| 0. 7767| 0. 7773| GBP| 104. 5176| 104. 5749| EUR| 85. 9296| 85. 9620| CAD| 67. 0369| 67. 1032| AUD| 60. 7407| 60. 7885| | | Buying and selling rates of specific dealer banks may be seen in their respective websites, links to which are also provided in Bangladesh Bank’s website.

Also in the right hand side column of the homepage, the next auction date for the treasury bills are given, along with the auction calendar. Below the section where the next auction dates are announced, is the section about “e-Tender”. Bangladesh Bank introduces the online tendering system to facilitate the procurement process of Bangladesh Bank. “e-Tender” system is an in-house product of Bangladesh Bank. The system will help to participate in the local and international tender/procurement of Bangladesh Bank.

The customers can register as a bidder and experience the immediate benefits of “e-Tender. ” Other than the home page, the other pages in Bangladesh Bank’s website are; * “SAARC Finance”: in this section information is provided in details about “The Network of SAARC Central Bank Governors and Finance Secretaries” (SAARC FINANCE). Their brief history, objectives and activities all mentioned along with links to SAARCFINANCE Seminar Papers/ Publications/ Presentations in Bangladesh. The SAARC FINANCE activities in Bangladesh are all shown in details.

Different economic data, publications, information about training institutes, web links to other SAARC Central banks are all given in this section. * Customer Complaint : Several Complaint are received in Bangladesh Bank (BB) everyday from public/client stating that the banks concerned are not attending to their grievances. This has been viewed with concern by BB, and bank have already been advised to set up “Complaint Cell” to deal with all sort of complaints, either received directly by them or referred through ifferent agencies/institutions, including BB. BB has also setup “Vigilance Division” headed by Deputy General Manager (DGM) in it Foreign Exchange Inspection and Vigilance Department. This Division will check the performance, effectiveness and function of the Complaint Cells of the banks, and monitor the status of customer complaints. Any client, person or agency having complaint(s) against a bank/bank official may write down his/her complaint(s) in the blank space below and lodge the complaint(s) instantly to the Division.

The complaint(s) will then be reviewed by Foreign Exchange Inspection and Vigilance Department, and necessary actions will be taken. * Site Map: in this section, links to various kinds of information is available. for instance, links to information about career opportunities at Bangladesh Bank is available, which also gives information on internship opportunities, plus information on different economic data, regulations and guidelines, other organizational guidelines, everything is available here. * Bangladesh in Brief: in this section Bangladesh’s description is given in short. t has information on Bangladesh history, climate, economy, demography, social development, * Disclaimer: While every effort has been made to ensure that the information in the website is accurate, in this section, it is mentioned that, the Bangladesh Bank will not be responsible for damages or losses to users that may result from any error or omission or inadvertent alteration in the information. Also in the left hand side of the homepage, links to various information is available, such as: * About Us * Organisational Structure * Bangladesh Bank in Brief * Strategic Plan * Vision ; Mission

Head Office/ Departments Branch Office Bangladesh Bank Library Economic Data Financial System Money Market Investment Facilities Monetary Policy Regulations And Guidelines Laws and Acts Media Room Draft Guidelines/ Notifications Publications Currency Career Research Work ACU Information Relevent links Citizen Charter LC Monitoring * Major Economic Indicators * Selected Indicators: Weekly Update * Exchange Rate * Interest Rate (avg. ) * International Reserves * Balance of Payments * Bank Credit * Bank Deposits * Foreign Aid and Govt’s External Debt. * Government’s Domestic Debt. * Inflation Money Supply * Monetary Survey * National Income Aggregates * Wage Earners Remittance Inflows * Foreign Trades * Export Receipts * Import Payments * Financial System * Financial System * Central Bank * Banks ; FIs * Capital Market * Insurance * Micro Finance Institutions (MFIs) * Money Market * Govt. Securities Auction * Treasury Bills and Bonds * REPO-Reverse REPO * Prize Bond * Result * Search * FAQs General Facilities / Incentives * US Dollar Premium Bond * US Dollar Investment Bond * Wage Earners Development Bond * Non-Residents Investment * Inward Remittance Facilities * Tax Exemptions Monetary Policy * Monetary Policy Statement [English] * Archive * Regulation And Guidelines * BB Related * Other Organisational Guideline * PKSF * Laws ; Acts * Bangladesh Bank Order * Bank Company Act, 1991 * Money Laundering Prevention Act * Foreign Exchange Regulation Act * Microcredit Regulatory Authority Act * Financial Institutions Act * The Negotiable Instruments Act * The Bankers’ Book Evidence Act * Money Loan Court Act * Bank Deposit Insurance Act * Anti-terrorism Act * Media Room * Governor’s Speech * BB News * Press Releases * Circulars/Circular Letters * Tenders * Notice Board Conference/Seminar * Credit Rating of the Banks * List of Unclaimed Accounts * Holidays for Bank * Draft Guidelines/Notifications * Guidelines * Notifications * Publications * Weekly * Selected Indicators * Statement of Affairs * Financial Position of Scheduled Banks * Fortnightly * Trends of major economic indicators * Monthly * Economic Trends * Major Economic Indicators: Monthly Update * Explanation of the Surplus Liquidity * Bank Parikrama * Quarterly * Bangladesh Bank Quarterly * Scheduled Banks Statistics * Half Yearly * Financial Sector Review * Monetary Policy Review * FDI Survey Report * Annually Annual Report * Balance of Payments * NGO-MFIs in Bangladesh * Import Payments * Export Receipts * CSR Initiatives in Banks * All * Archive * Currency * Currency in Circulation * Security Features * Museum * Demonetized Currency * Commemorative Coinage * Career * Career Opportunity * FAQs * Research Work * Monetary Policy Review * Financial Sector Review * Policy Notes * Policy Papers * Working Papers * ACU Information * Contact Information * Relevant Links * National * Government * Banks * Financial Institutions (FIs) * Micro Finance Institutions (MFIs) * Others * International * Central Banks


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