You are on page 1of 3

bank as well as chief authority to regulate country’s monetary and financial system, was established in Dhaka as a body corporate

vide the Bangladesh Bank Order, 1972 (P.O. No. 127 of 1972) with effect from 16th December, 1
liabilities of the then Dhaka branch of State Bank of Pakistan. At present it has got 9 branches and those are located at Motijheel, Khulna, Sadarghat, Bogra, Chittagonj, Sylhet, Barisal, Rangpur and Rajshahi in Bangladesh and

gladesh executes all the functions that a central bank traditionally performs as elsewhere in the world. The core functions of BB are briefly discussed as follows:
nd implements monetary policy aiming at stabilizing domestic monetary value and maintaining competitive external per value of taka for fostering growth and development of country’s productive resources in the best national interest.
nd implements intervention policies in the domestic money market and foreign exchange market. BB intervenes the money market with some policy instruments such as
en market operation (treasury bills/bonds, repo, reverse repo auctions)
iations in reserve ratios such as cash reserve requirements (CRR) and statutory liquidity ratio (SLR)
condary trading
counting rate/ bank rate and
ral suasion
supervises scheduled banks and non-bank financial instructions (NBFIs) that include off-site supervision and on-site supervision in order to enhance the safety, soundness, and stability of the banking system to ensure banking
n confidence in the banking system.
sponsibility of the management of international reserve representing aggregate of BB’s holding of gold, foreign exchange SDR and reserve position in the IMF;
al bank of Bangladesh reserves sole responsibility to issue bank note
a clearing house for the scheduled banks to clear and settle inter-bank payment arising through drawing cheque, drafts, bills, etc to one another.
ker to the government;
a lender of the last resort for the government as well as for the country’s scheduled banks;
visor to the government;
owth expediting programs for the national interest.

clude some other promotional activities such as development of new instruments, guidelines for money and financial market participants, providing training to the banks and NBFIs, monitoring and encouraging corporate social respo

l Banking: A Brief Concept
nk, or monetary authority is a banking institution granted the exclusive privilege to lend a government its currency. Like a normal commercial bank, a central bank charges interest on the loans made to borrowers, primarily the govern
other commercial banks, typically as a 'lender of last resort'. However, a central bank is distinguished from a normal commercial bank because it has the monopoly on creating the currency of a nation, which is loaned to the gover
n lend money to other banks in times of need. Its primary function is to provide the nation's Money Supply, but more active duties include controlling subsidized-LoanInterest Rates, and acting as a lender of last resort to the Bank
ks often being integral to the national financial system). It may also have supervisory powers, to ensure that banks and other financial institutions do not behave recklessly or fraudulently.

sector is a vital concern for an economy. Efficient banking or sound financial system serves as an effective channel for mobilizing funds from savers to productive sectors and thus helps to achieve economic growth. However, the i
g over time. Around the time of Adam Smith (1776) there was a massive growth in the banking industry. Within the new system of ownership and investment, the state's role as an economic actor changed substantially. The Jews
of money lending before the birth of Christ. The word 'Bank' was probably derived from the word 'bench' as during ancient time Jews used to do money lending business sitting on long benches. First modern banking was introduce
Bank' which opened up a new era of banking activities throughout the Europ

a major landmark was the establishment of the Hindustan Bank in 1700 at Kolcutta. Dhaka Bank started to operate in1806. Banks established in this region during the British period include Kurigram Bank (1887), Kumarkhali Ban
najpur Bank(1914), Comilla Banking Corporation (1914) and Comilla Union Bank(1922). Major Indian Banks also had branches in this territory. In Europe prior to the 17th century most money was Commodity Money, typically Gold or
ed and accepted as value at least five hundred years earlier in both Europe and Asia. The medieval European Knights Templar ran probably the best known early prototype of a central banking system. At about the same time, K
o China, which was imposed by force by the confiscation of Specie. Although central banks are generally associated with fiat money, under the international Gold Standard of the nineteenth and early twentieth century’s central ba
gh elsewhere Free Banking or Currency Boards were more usual at this time. Problems with collapses of banks during downturns, however, was leading to wider support for central banks in the respective nations which did not a

"offer accounts not directly convertible to coin", the Bank of Amsterdam established in 1609 is considered to be the "first true central bank". This was followed in 1694 by the Bank of England, created by Scottish businessman Willi
the request of the English government to help pay for

old standard after World War II, central banks became much more widespread. The banking system at our independence consisted of two branch offices of the former State Bank of Pakistan established in July 1948: one was in
s in West Pakistan (present Pakistan).


Sl. No. Name Tenor
01 Mr. A.N.M. Hamidullah 18/01/1972 - 18/11/1974

02 Mr. A.K.N. Ahmed 18/11/1974 - 13/07/1976

03 Mr. M. Nurul Islam 13/07/1976 - 12/04/1987

04 Mr. Shegufta Bakht Chaudhuri 12/04/1987 - 19/12/1992

05 Mr. Khorshed Alam 20/12/1992 - 21/11/1996

06 Mr. Lutfar Rahman Sarkar 21/11/1996 - 21/11/1998

07 Dr. Mohammed Farashuddin 24/11/1998 - 22/11/2001

08 Dr. Fakhruddin Ahmed 29/11/2001 - 30/04/2005

09 Dr. Salehuddin Ahmed 02/05/2005 - 30/04/2009

banding etc. 11. The websites contain circulars issued by the BB. Therefore. BB’s publications and reports including important speeches/presentatio th ves is to promote and maintain a high level of production. with the view to reduce now serve as important access to information on roles. 1972 (P. economic indicators. aged a d machine for note processing sorting. major publications include the Annual Report. BB as the regu sibilities with the view to achieve its objectives that impacts directly and indirectly on country’s financial growth. poverty has been targeted to reduce below need to be made available to the common people for the sake of poverty reduction also. Policy Analysis Unit.500 crore and to ensure institutional credit facility for the share croppers. Bangladesh Bank for the first time has introduced a refinance scheme of TK. responsibilities and policy approaches of the central bank. is considered as entitlement of all people in a society. Atiur Rahman* 01/05/2009 ulations and Guidelines ons. Am Bank Order. 1993 Insurance Act. fiscal. the Financial Sector Review. As a short term measure to achieve this target BB authority hopes the credit facilities for agriculture and SMEs will be very effective and will ease the implementat has adopted the Strategic Planning in accomplishing 16 core objectives by 2010-14: rrent monetary policy framework to ensure continuing effectiveness of monetary polices ulatory and supervisory framework to enhance financial sector resilience and stability en financial markets in Bangladesh usion and broadening of access e efficient currency management and payment system ulatory and supervisory framework against money laundering arate and comprehensive guideline and supervision for Islamic banking e efficient management of government domestic debt nd transform data reporting. the Monetary Policy Review. 10 Dr. with refinance lines available to them from Bangladesh Bank. monetary. a large segment of our population particularly rural poor have scant access to banking services. 2006 ering Prevention Act.bangladeshbank. Inclusiveness of a greater segment of people in financial system is pre requisite for economic dev mployment to ease credit facilities. blications ut a number of research and statistical publications. 2000 Court Act. In addition commercial banks have been persuaded to invest in power generation plant under the meantime BB itself has established a 20 kilo watt solar s urging the financial institutions to be more committed to the society by fulfilling their Corporate Social Responsibilities (CSR) because the ultimate target of any business activity should be the maxim of present Govt. 2009 ons and guidelines broadly include Bangladesh Bank Regulations and Foreign Exchange Regulations. helps handling media briefings and liaison. The yearly economic/financial growth chart is given below: . processing and dissemination through full fledged ICT framework on of credit information bureau (CIB) sting gaps in legal empowerment of BB in different functional areas and develop people ensuring sound organizational development isk-based internal control to add value to the Risk Management Process in Bangladesh Bank activities and preparedness for climate change in Bangladesh with conducive policy direction ctive channels for communicating central bank’s policies and initiatives to stakeholders to enhance effectiveness of implementation egic Planning and coordination Unit as a process owner of BB strategic plan ality of customer service of Bangladesh Bank modernization program for the cash department has been initiated. and economic growth. BB's websites (www. and issuance of press releases. with support from the department o ublic Relations Division (IPRD) of Governor Secretariat. Research. setting up CCTV as part of improved security system. on and Growth Expediting Programs ch as deposit.O. the farmers are now allowed to open their bank account by ten sing its concentration on infrastructural development because it’s a vital prerequisite for economic development. etc. A Taka 200 crore refinance line has been introduced in FY-10 against bank loans for environment friendly investmen ent Plants (ETP). Among others. Therefore. the Bangladesh Bank Quarterly Report. credit etc. 1881 Book Evidence Act. No. 2009 and Act. central display board for displaying up-to date directives and citizen charter and many others. Monetary Policy and Statistics Departments jointly prepare these reports. Already Participatory Agreement with some banks for receiving refinance facility for loan against ETP is under process. Despite a large number of bank branches and micro finance institutions in our country. in particular. help desk. 1891 ange Regulations Act. separate counter for women. market participants and general public. To widen and strengthen IT.500 crore which will be disbursed using NGO linkages BB has formulated a three stage monitoring system. 127 of 1972) ny Act. 1991 le Instruments Act. employment and real income of Bangladesh. BB is detecting the hindrances on the way. and guidelines have been enacted and promulgated time to time since BB’s establishment which helped BB to perform its role as a central bank particularly. 2003 Regulatory Authority Act. recently Bangladesh Bank has formed SM nvestment in this sector especially to help women in increasing their contribution to industrialization. this is particularly true in developed countries. Bangladesh d services like deposit. Bangladesh Bank and the Government of Bangladesh (GOB) have adopted several remedial measur duced refinance schemes for banks against their loans to Small and Medium Enterprises (SMEs) multilateral development partners such as the IDA and ADB are supplementing BB’s refinance programs with their co-financing lines ns to Small and Medium Enterprises (SMEs) have been expanded from Taka 100 crore to Taka 600 crore for ensuring credit availability to this sector. such as. and to foster growth and development of the country's productive resources for national interests. and Monthly mic Trends intended to inform policy and www. 24000 will be disbursed in the current fiscal (FY 2009-10) through the ogram announced by BB for FY 10 enjoins all banks to engage in lending for a comprehensive range of no-and off-farm rural economic activities. Besides. to control and regulate country’s monetary and financial system. 1947 itutions Act. accelerate economic activities with satisf the people outside the bank under banking services in line with financial inclusion is likely to contribute in economic development of Bangladesh. In this regard it has been made mandatory that at least 15% of the credit will have to be nst the sector in total of Tk. BB has announced it for FY 2009-10 of TK. small credit etc.