Bangladesh Bank (Bengali: বাংলাদেশ ব্যাংক)
is the central bank of
Bangladesh and is a member of the Asian
The bank is active in developing green banking and financial
inclusion policy and is an important member of the Alliance for
Bangladesh Financial Intelligence Unit (BFIU),
a department of
Bangladesh Bank, has got the membership of Egmont
Bangladesh Bank is the first central bank in the world to introduce a
dedicated hotline (16236) for the general populace to complain any
banking related problem. Moreover, the organisation is the first
central bank in the world to issue a "Green Banking Policy". To
acknowledge this contribution, then-governor Dr.
Atiur Rahman was
given the title 'Green Governor' at the 2012 United Nations Climate
Change Conference, held at the
Qatar National Convention Centre in
2 Branch offices
4.2 Board of directors
5 Publications of
6 Former governors
7 See also
9 External links
Main article: History of Banking in Bangladesh
After the Liberation War and the eventual independence of Bangladesh,
the Government of
Bangladesh reorganised the
Dhaka branch of the State
Bank of Pakistan as the central bank of the country, naming it
Bangladesh Bank. This reorganisation was done pursuant to Bangladesh
Bank Order, 1972, and the
Bangladesh Bank came into existence
retroactively from 16 December 1971.
The 1971 Mujib regime pursued a pro-socialist agenda. In 1972, the
government decided to nationalise all banks to channel funds to the
public sector and to prioritise credit to those sectors that sought to
reconstruct the war-torn country – mainly industry and
agriculture. However, government control of the wrong sectors
prevented these banks from functioning well. This was compounded by
the fact that loans were handed out to the public sector without
commercial considerations; banks had poor capital lease, provided poor
customer service and lacked all market-based monetary instruments.
Because loans were given out without commercial considerations, and
because they took a long time to call a non-performing loan, and once
they did, recovery under the erstwhile judicial system was so
expensive, loan recovery was abysmally poor. While the
government made a point of intervening everywhere, it didn't set up a
proper regulatory system to diagnose such problems and correct them.
Hence, banking concepts like profitability and liquidity were alien to
bank managers, and capital adequacy took a backseat.
In 1982, the first reform program was initiated, wherein the
government denationalised two of the six nationalised commercial banks
and permitted private local banks to compete in the banking sector. In
1986, a National Commission on Money, Banking and Credit was
appointed to deal with the problems of the banking sector, and a
number of steps were taken for the recovery targets for the
nationalised commercial banks and development financial institutions
and prohibiting defaulters from getting new loans. Yet the efficiency
of the banking sector could not be improved.
The Financial Sector Adjustment Credit (FSAC) and Financial Sector
Reform Programme (FSRP) were formed in 1990, upon contracts with the
World Bank. These programs sought to remove government distortions and
lessen the financial repression. Policies made use of the
McKinnon-Shaw hypothesis, which stated that removing distortions
augments efficiency in the credit market and increases competition.
The policies therefore involved banks providing loans on a commercial
basis, enhancing bank efficiency and limiting government control to
monetary policy only. FSRP forced banks to have a minimum capital
adequacy, to systematically classify loans and to implement modern
computerised systems, including those that handle accounting. It
forced the central bank to free up interest rates, revise financial
laws and increase supervision in the credit market. The government
also developed the capital market, which was also performing poorly.
FSRP expired in 1996. Afterwards, the Government of
a Bank Reform Committee (BRC), whose recommendations were largely
unaddressed by the then-government.
Bangladesh Bank, the central bank 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. At present it has ten offices
located at Motijheel, Sadarghat, Chittagong, Khulna, Bogra, Rajshahi,
Sylhet, Barisal, Rangpur and Mymensingh in Bangladesh; total manpower
stood at 5807 (officials 3981, subordinate staff 1826) as of 31 March
Bangladesh Bank performs all the functions that a central bank in
any country is expected to perform. Such functions include maintaining
price stability through economic and monetary policy measures,
managing the country's foreign exchange and gold reserve, and
regulating the banking sector of the country. Like all other central
Bangladesh Bank is both the government's banker and the
banker's bank, a "lender of last resort".
Bangladesh Bank, like most
other central banks, exercises a monopoly over the issue of currency
and banknotes. Except for the one, two, and five taka notes and coins
which are the responsibility of the Ministry of Finance of the
Government of Bangladesh. The major functional areas include :
Formulation and implementation of monetary and credit policies.
Regulation and supervision of banks and non-bank financial
institutions, promotion and development of domestic financial markets.
Management of the country's international reserves.
Issuance of currency notes.
Regulation and supervision of the payment system.
Acting as banker to the government .
Money laundering prevention.
Collection and furnishing of credit information.
Implementation of the Foreign Exchange Regulation Act.
Managing a deposit insurance scheme .
The bank's highest official is the governor (currently Fazle Kabir).
His seat is in Motijheel, Dhaka. The governor chairs the board of
directors. The executive staff, also headed by the governor, is
responsible for the bank's day-to-day affairs.
Bangladesh Bank also has a number of departments under it, namely Debt
Management, Law, and so on, each headed by one or more general
managers. The Bank has 10 physical branches: Bangladesh,
Mymensingh, Motijheel, Sadarghat, Barisal, Khulna, Sylhet, Bogra,
Rajshahi, Rangpur and Chittagong; each is headed by a general manager.
Headquarters are located in the
Bangladesh Bank Building in Motijheel,
which has two general managers.
The executive staff is responsible for daily affairs, and includes the
governor and three deputy governors. Under the governors, there are
executive directors and an economic advisor.
The general managers of the departments come under the directors, and
are not part of the executive staff.
The three deputy governors are:
Abu Hena Mohd. Razee Hassan, S. M. Moniruzzaman and Ahmed Jamal .
Board of directors
The board of directors consists of the bank's governor and eight other
members. They are responsible for the policies undertaken by the bank.
Bangladesh Bank publishes a range of periodical publications, research
papers, and reports that contain monetary and banking developments,
economic reviews, as well as various other statistical data. These
Bangladesh Bank Quarterly
Monetary Policy Review
CSR Initiatives in Banks
BBTA Journal : Thoughts on Banking and Finance
Annual Report on Green Banking
Financial Stability Assessment Report
Since its conception, the
Bangladesh Bank has 11 governors:
A.N.M. Hamidullah (18 January 1972 – 18 November 1974)
A.K. Naziruddin Ahmed (19 November 1974 – 13 July 1976)
M. Nurul Islam (13 July 1976 – 12 April 1987)
Shegufta Bakht Chaudhuri (12 April 1987 – 19 December 1992)
Khorshed Alam (20 December 1992 – 21 November 1996)
Lutfar Rahman Sarkar (21 November 1996 – 21 November 1998)
Mohammed Farashuddin (24 November 1998 – 22 November 2001)
Fakhruddin Ahmed (29 November 2001 – 30 April 2005)
Salehuddin Ahmed (1 May 2005 – 30 April 2009)
Atiur Rahman (1 May 2009 – 15 March 2016)
Fazle Kabir (20 March 2016 – present)
Bangladesh Bank robbery
Economy of Bangladesh
^ "Former finance secretary
Fazle Kabir to head
Bangladesh Bank, says
^ "Green Banking in Bangladesh" (PDF).
Bangladesh Bank. November 2012.
Archived from the original (PDF) on 16 April 2014.
^ "AFI Member Institutions", Alliance for Financial Inclusion,
archived from the original on 22 August 2012
^ a b c d Bahar, Habibullah (9 December 2009). "Financial
Liberalization and Reforms in Bangladesh". Thimphu, Bhutan:
UNESCAP/UNDP/Royal Monetary Authority of Bhutan.
^ a b c d Bhattacharya, Debopriyo; Toufic A Chowdhury (April 2003).
"Financial Sector Reforms in Bangladesh: The Next Round". CPD
Occasional Paper Series. Paper 22. Dhaka, Bangladesh: Centre for
Policy Dialogue. Paper 22.
^ "General Managers".
Bangladesh Bank. Retrieved 15 August 2011.
^ a b "BB Hierarchy".
Bangladesh Bank. Retrieved 15 August 2011.
^ "Deputy Governors".
Bangladesh Bank. Retrieved 15 August 2011.
^ "Governors of BB". bangladesh-bank.org. Retrieved 7 June 2012.
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