Bangladesh University of Business and Technology (BUBT)

Assignment
Course: Banking and Insurance
Course code: FIN 30

Submitted To
Md. Sayeem Bin Hafiz
Assistant Professor & Chairman (Acting)

Submitted By
Name ID Intake & Section
Abdus Samad Oni 18192101079 48-2
Samiuel Hossain 18192101055 48-2
Syead Atharul Haque Ahhad 18192101145 48-4

Date of Submission:
14/06/2022
 Bangladesh Bank:
The Central Bank of Bangladesh

Central Bank
A central bank or monetary authority is a monopolized and often nationalized institution given
privileged control over the production and distribution of money and credit. In modern
economies, the central bank is usually responsible for the formulation of monetary policy and
the regulation of member banks.
A central bank is an independent national authority that conducts monetary policy, regulates
banks, and provides financial services including economic research. Its goals are to stabilize the
nation's currency, keep unemployment low, and prevent inflation.

Bangladesh Bank
Bangladesh Bank, the central bank of Bangladesh and apex regulatory body for the 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 16 December 1971. After
the Liberation War and the eventual independence of Bangladesh, the Government of
Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of
the country, naming it Bangladesh Bank. This reorganization was done pursuant to Bangladesh
Bank Order, 1972, and the Bangladesh Bank came into existence retroactively from 16
December 1971.

VISION
To develop continually as a forward looking central bank with competent and committed
professionals of high ethical standards, conducting monetary management and financial sector
supervision to maintain price stability and financial system robustness, supporting rapid broad
based inclusive economic growth, employment generation and poverty eradication in
Bangladesh

MISSION
MISSION
MISSION
1. Formulating monetary and credit policy
2. Managing currency issue and regulating payment system
3. Managing foreign exchange reserves and regulating the foreign exchange market
4.Regulating and supervising banks and financial institutions, and advising the government on
interactions a

Core Policies of Bangladesh Bank

Monetary policy
Monetary policy
Monetary policy
The main objectives of monetary policy of Bangladesh Bank are:
1. Price stability both internal & external
2. Sustainable growth & development
3. High employment
4. Economic and efficient use of resources
5. Stability of financial & payment system

Reserve Management Strategy

Bangladesh Bank maintains the foreign exchange reserve of the country in different currencies
to minimize the risk emerging from widespread fluctuation in exchange rate of major currencies
and very irregular movement in interest rates in the global money market. BB has established
Nostro account arrangements with different Central Banks. Funds accumulated in these
accounts are invested in Treasury bills, repos and other government papers in the respective
currencies. It also makes investment in the form of short term deposits with different high
rated and reputed commercial banks and purchase of high rated
sovereign/supranational/corporate bonds.

Interest Rate Policy

Under the Financial sector reform program, a flexible interest policy was formulated. According
to that, banks are free to charge/fix their deposit (Bank /Financial Institutes) and Lending
(Bank /Financial Institutes) rates other than Export Credit. At present, except Pre-shipment
export credit and agricultural lending, there is no interest rate cap on lending for banks.

Capital Adequacy for Banks and FIs

Basel-III has been introduced with a view to strengthening the capital base of banks with the
goal of promoting a more resilient banking sector. The Basel III regulation will be adopted in a
phased manner starting from the January 2015, with full implementation of capital ratios from
the beginning of 2019. Now, scheduled banks in Bangladesh are required to maintain minimum
capital of Taka 4 billion or Capital to Risk Weighted Assets Ratio (CRAR) 10%, whichever is
higher.

Objectives of Bangladesh
Bank:
Objectives of Bangladesh Bank
1. Stabilizing inflation at moderate level targeted in the national budget and other
macroeconomic policy pronouncements.
2. Supporting the public policy objectives of inclusive, environmentally sustainable growth.
3. Maintaining orderliness in transition of domestic currency exchange rate to new market
equilibriums in response to pick up in investment and consumption driven imports vis-a-vis
trends of export receipts and other inflows.

Functions of Bangladesh
Bank:
Functions of Bangladesh Bank
1. Formulation and implementation of monetary and credit policies.
2. Regulation and supervision of banks and non-bank financial institutions, promotion and
development of domestic financial markets.
3. Management of the country's international reserves.
4. Issuance of currency notes.
5. Regulation and supervision of the payment system.
6. Acting as banker to the government.
7. Money laundering prevention.
8. Collection and furnishing of credit information.
9. Implementation of the Foreign Exchange Regulation Act.
10. Managing a deposit insurance scheme.

Activities that Bangladesh Bank Performs to Different

Stakeholders

For the Nation

Bangladesh Bank catalyzes and supports socially responsible and environmentally sustainable
development initiatives, inter alia including fuller financial inclusion of under-served productive
sectors and bringing in needed new dimensions in financial markets and institutions; to
facilitate broad based growth in output, employment and income, for rapid poverty eradication
and inclusive economic and social progress.

For the government

Bangladesh Bank adopts and implements monetary and credit policies conforming to national
priorities, in coordination with government's fiscal and other macroeconomic objectives.
Bangladesh Bank optimizes foreign exchange reserves and returns thereon, maintain stability in
financial markets curbing excessive volatility, and provides analysis and advice to the
government on issues in economic management and development.

For depositors in banks and financial institutions, investors in financial assets

Bangladesh Bank ensures safety of deposits in licensed banks and financial institutions with on-
site and off-site supervision of their activities and with adequate financial information
disclosure requirements, besides insuring small deposits. Bangladesh Bank maintains an
interest rate structure that provides fair return on financial assets while also supporting growth
in the real sector, and promotes and support development of markets in bonds and securities.
For banks and financial institutions in Bangladesh
Bangladesh Bank provides precise prudential regulatory, risk management and disclosure
framework to protect solvency and liquidity of individual institutions and stability of the overall
financial system, acting as lender of last resort if and when needed. Bangladesh Bank issues
regulations and enforce compliance therewith inter alia on capital adequacy, asset
classification, income recognition and provisioning, large exposure and risk management;
through open consultative processes. They maintain external sector viability with exchange rate
stability and adequate foreign exchange reserves. They provide a secure and quick payment
settlement system and promote and support development of new financial products, services
and instruments.

For banks abroad

Bangladesh Bank maintain a solvent, liquid domestic financial system with precise prudential
regulatory, risk management and disclosure framework in line with global best practice
standards. They also maintain external sector viability with exchange rate stability and
adequate reserves. They maintain a secure, quick payment system for settlement of claims.

For the business community, including farm and non-farm SMEs

Bangladesh Bank maintain liquidity conditions and credit policies ensuring adequate credit
flows at market driven flexible interest rates for all productive economic activities, including in
sectors like agriculture and SMEs where markets have not been very responsive. They foster
macroeconomic stability through monetary and external sector management. They promote
and support development of new financial products, services and instruments. Bangladesh
Bank maintains a secure and quick payment system for settlement of claims.

For Bangladeshis abroad

Bangladesh Bank facilitate remittances from your earnings abroad to Bangladesh through
legitimate banking channels free of involvement of money launderers or terrorism financiers.
They also support and promote development of new investment opportunities for your
remittances to Bangladesh.

For theirs employees

They maintain an environment that reinforces our pride in being employees of Bangladesh Bank
with compensation structure adequate to attract and retain the best in the market, job
assignments and logistically well-resourced work situations encouraging continuous learning
and rewarding innovativeness and performance excellence by fast tracking in career path, clear
delegation and delineation of responsibilities and accountabilities, fairness and objectivity in
performance appraisal and personnel placement decisions.

Regulations and guidelines

1. Bangladesh Bank regulations
2. Regulations for Scheduled Banks
3. Regulations for Financial Institution
4. Regulations for Banks and Financial Institutions
5. Regulations Managing core risk in Banks
6. Regulations Foreign exchange
7. Anti-Money Laundering
8. Payment & Settlement Regulations

Branch offices
1. Motijheel
2. Sadarghat
3. Bogra
4. Chittagong
5. Rajshahi
6. Barishal
7. Khulna
8. Sylhet
9. Rangpur
10. Mymensingh