Function of Bangladesh Bank

Introduction

Bangladesh Bank (BB) has been working as the central bank since the country’s independence. Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction facilities of all public monetary matters. BB is also responsible for planning the government’s monetary policy and implementing it thereby.

The BB has a governing body comprising of nine members with the Governor as its chief. Apart from the head office in Dhaka, it has nine more branches, of which two in Dhaka and one each in Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Rangpur and Barisal.

History & role of Bangladesh Bank

The central bank and 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 been entrusted with all the traditional central banking functions including the sole responsibilities of issuing currency, keeping the reserves, formulating and managing the monetary policy and regulating the credit system of Bangladesh with a view to stabilizing domestic and external monetary value and promoting and maintaining a high level of production, employment and real income in the country. The bank acts as the banker to the government and accepts government deposits, cheques and drafts, and undertakes collection of cheques and drafts drawn on other banks. The government deposits all its cash balances with the Bangladesh Bank free of interest. The bank transfers government funds from one place to another as requested by the government and its agencies. It makes ways and means for advances to the government, which is repayable not later than three months. It acts as the public debt manager and runs a public debt office (PDO) within itself. The bank also sells government treasury bills on tender, prize bonds and different types of saving certificates (sanchayapatra). The bank acts as the clearing house of the scheduled banks

The purchase, sale and rediscount of bill of exchange and promissory notes drawn on and payable in Bangladesh are also included in the activity of the bank. The bank acts as the lender of last resort for the government as well as for the country’s scheduled banks. All scheduled banks are required to maintain a minimum reserve with the Bangladesh Bank. The present statutory liquidity reserve (SLR) requirement is 20% of total demand and time liabilities, 4% of which is to be maintained as cash reserve ratio (CRR), and the rest 16% as approved securities. The SLR requirement for Islamic banks is 10% and they are to keep 4% of this reserve as CRR and the rest 6% in approved securities.

Bangladesh Bank exercises its wide range of power in credit control through different types of traditional and non-traditional methods. In addition to bank rate and open market operations, it uses a number of other weapons. It can vary the minimum reserve requirements of scheduled banks whenever circumstance so warrant. Being responsible for maintaining external value of Bangladesh currency, the bank also handles the exchange control. It ensures that all foreign exchange inflows are accounted for, and surrendered to the authorized dealers. It allocates and rations foreign exchange in line with the set priorities. Bangladesh Bank is empowered to manage the country’s international reserves, which represent aggregate of its holding of gold, foreign exchange, SDR and reserve position in the IMF. The bank also acts as the representative of the government in different international agencies and other forums such as World Bank, IMF, Asian Clearing Union, ADB, etc.

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 country or shift any branch from one place to another without obtaining a licence/permission from the Bangladesh Bank.

Bangladesh Bank runs a Deposit Insurance Scheme established under the Deposit Insurance Ordinance 1984. The objective of the scheme is to safeguard the deposits of the customers with both local and foreign deposit money banks doing business in Bangladesh. The deposits amounting up to Tk 100,000 of all customers in a scheduled bank are insured under the scheme. All scheduled banks in Bangladesh are required to be members of the scheme and pay premium on their deposits at a rate determined by the Bangladesh Bank from time to time. Bangladesh Bank accumulates the premiums in the Deposit Insurance Fund.

The paid up capital of Bangladesh Bank is Tk 30 million divided into 300,000 shares of Tk 100 each that are fully paid up by the government. A nine-member board of directors comprising the governor as chairman, one deputy governor and seven members oversees the affairs of the bank. The governor and the deputy governors of the Bank are appointed by the government for a period not exceeding five years and are eligible for reappointment.

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. The departments are International, Law, Financial Institutions, Computer (2), Agricultural Credit, Agricultural Credit Inspection, Agricultural Credit Project, Credit Information Bureau, Research (3), Public Relations and Publications, Audit and Inspection, Statistics (2), Engineering, Problem Bank Monitoring, Administration, Training Academy, Foreign Exchange Policy, Foreign Exchange Inspection, Foreign Exchange Investment, Administration and Expenditure, Banking Inspection, Banking Regulation and Policy, Banking Operation and Development, Monetary Management and Technical Unit, Currency Management and Accounts, Industrial Credit, and Security Management.

Bangladesh Bank has correspondent relationships with one international and 8 foreign central banks viz., the Federal Reserve Bank of New York, Bank of Canada, Bank of England, Bank De France, Deutsche Bundes Bank, Bank of Japan, Svereges Riks Bank of Stockholm, Reserve Bank of India and the Bank for International Settlements, Basle. Besides, Bangladesh Bank has now invested its foreign exchange reserves with 14 banks at different international financial centers.

To reduce the huge costs of printing currency notes from foreign countries Bangladesh Bank had initiated a Security Printing Project, which was converted into a limited company of the name The Security Printing Corporation (Bangladesh) Ltd. on 18th October 1992. The corporation is now working as a commercial concern and prints all currency and bank notes in Bangladesh. Other security papers, such as judicial and non-judicial stamps, prize bonds, revenue stamps, postal envelope and stamps, band rolls for customs and excise department, and cheque books of different private banks in Bangladesh are also printed by this company. The company however, does not have a minting plant and the country still remains dependent on foreign mint companies for minting the coinage.

The powers and functions of Bangladesh Bank are governed by various laws and acts including the Banker’s Books Evidence Act 1891, Insolvency Act 1920, Banking Companies Ordinance 1962, Bangladesh Bank Order 1972, Foreign Exchange (Regulation) Act 1986, Money Loan Court Act 1990, Banking Companies Act 1991, Financial Institutions Act 1993 and Rules 1994, Companies Act 1994 and Bankruptcy Act 1997. [S M Mahfuzur Rahman]

Objectives of Bangladesh Bank

As the central Bank of Bangladesh, the broad objectives of the Bank are :
a) To regulate currency issuance and to keep foreign exchange reserves;
b) To manage the monetary and credit system of Bangladesh with a view to stabilizing domestic monetary value;
c) To preserve the par value of the Bangladesh Taka;
d) 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.

Branches of Bangladesh Bank

Bangladesh Bank has 10 branch offices. Those are given below:

Bogra	Chittagong	Mymensingh	Rajshahi	Sadarghat
Khulna	Motijheel	Sylhet	Barishal	Rangpur

Department of Bangladesh Bank:

        i.            Accounts & Budgeting Department

The objectives of Accounts and Budgeting Department are to provide information on the financial position, performance and change in financial position of Bangladesh Bank. To maintain international standard all financial statements are prepared in accordance with IAS & IFRS by the department. A&BD is providing relevant, reliable, and accurate financial information of Bangladesh Bank to the concerned authorities. The department captures all financial information from other departments/branch offices/ Sonali Bank etc, and take necessary action to keep and process these information properly for financial reporting. Particularly the department is responsible to maintain Government account, Bangladesh Bank own account, operate the back office of the dealing room, prepare the daily statement of FX reserve position, deal with all activities relating to budget of Bangladesh Bank & ensure budgetary control.
The major functions are appended below:
.	Maintain books of accounts relating to income and expenditure of Bangladesh Bank..
.	Prepare daily Trial Balance
.	Ensure IFRS/IAS in preparing and presenting Financial Statements.
.	Prepare Income Statements monthly, half-yearly and annually.
.	Prepare yearly Financial Statements in compliance with IAS / IFRS.
.	Prepare the weekly Statement of Affairs showing Assets and Liabilities of Banking & Issue Department.
.	Reconcile the transactions of General Ledger & Subsidiary Ledger and reconcile inter-branch transactions.
.	Prepare provisional and revised budget of the bank; Reallocation of funds within the budget allocation.
.	Frame policies i.e. rules and regulations and issue instructions from time to time pertaining to maintenance of books of accounts, submission of returns, presentation of financial statements.
.	Maintain Government accounts, publish daily cash balance of the government account.
.	Verify & settle the transactions of Govt. accounts maintained by Sonali Bank (commercial bank) as agent of Bangladesh Bank.
.	Communicate financial data with CGA and other stake holders of Government transactions.
.	Prepare compliance reports on external & commercial audit reports.
.	Execute foreign currency transactions through back office.
.	Maintain foreign currency transaction & prepare statement of daily reserve position.
.	Maintain accounts relating to Central Bank Strengthening Project and makes necessary arrangement for withdrawal of fund & submission of reports/statements from and to World Bank.

      ii.            Agricultural Credit and Financial Inclusion Department        

Objectives: i) Build a world-class center of excellence for imparting quality training to banks and non-bank financial institutions. ii) Add value to knowledge management process through research, knowledge exchange and innovations in learning. Functions : Bangladesh Bank Training Academy (BBTA) will perform diversified activities in the light of its objectives. The functions of BBTA are as follows: i) To keep constant touch and work in collaboration with the Training & Development Wing of HRD. iii) To formulate and design Annual Training Plan, course calendar, syllabus, course contents, to review curriculum periodically, to design need based training for the targeted people and ensure successful implementation of the training courses month wise. iii) To arrange courses/workshop/seminar on the request of different department/ offices of Bangladesh Bank and outside organizations. iv) To arrange Foundation Training Course for the newly recruited Assistant Directors of Bangladesh Bank.. v) To impart training to Bangladesh Bank employees/officers, as well as scheduled Bank/Financial institution/Non banking financial institution/NGO personnel vi) To invite experts/resource persons in different training courses with a view to imparting quality training. vii) To give special emphasis on computer and IT training to cope with the technological advancement and financial innovations. viii) To give emphasis on developing English Language skill of the Bangladesh Bank officials ix) To enrich the library in BBTA.

    iii.            Bangladesh Bank Training Academy

          This department is basically responsible for issuance of prudential guidelines to ensure a sound and stable banking system. The major areas covered are:
01. Determination of bank rate, capital adequacy requirements, asset classification and provisioning standard and reserve requirements.
02. Review and drafting of banking statutes.
03. Prescribing Criteria for corporate governance and insider lending and monitoring thereof.
04. Setting criteria for internal control and risk management system of banks and monitoring thereof.
05. Determination of accounting standards and disclosure requirements for banks.
06. Issuance of license for opening of new bank and new business center of existing banks.
07. Effecting disciplinary action against Board of Directors/CEO of banks.
08. Monitoring of law suits lodged by and against banks relating to recovery of loans.
09. Attending to works relating to development of priority/special sectors of the economy.
10. Issuance of directives and compliance thereof under the Banking Companies Act, 1991.

    iv.            Bangladesh Financial Intelligence Unit

Bangladesh FIU was established on 17 May, 2007 under the provision of Money Laundering Prevention Act, 2002 within Bangladesh Bank, the Central Bank of Bangladesh. It is responsible for receiving and analyzing Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) and responsible for disseminating information related to suspicious financial transactions to domestic law enforcement agencies as well as to foreign FIUs.

      v.            Banking Regulation and Policy Department

This department is basically responsible for issuance of prudential guidelines to ensure a sound and stable banking system. The major areas covered are:

01. Determination of bank rate, capital adequacy requirements, asset classification and provisioning standard and reserve requirements.

02. Review and drafting of banking statutes.

03. Prescribing Criteria for corporate governance and insider lending and monitoring thereof.

04. Setting criteria for internal control and risk management system of banks and monitoring thereof.

05. Determination of accounting standards and disclosure requirements for banks.

06. Issuance of license for opening of new bank and new business center of existing banks.

07. Effecting disciplinary action against Board of Directors/CEO of banks.

08. Monitoring of law suits lodged by and against banks relating to recovery of loans.

09. Attending to works relating to development of priority/special sectors of the economy.

10. Issuance of directives and compliance thereof under the Banking Companies Act, 1991.

    vi.            Central Bank Strengthening Project Cell

Bangladesh Bank has been implementing the Central Bank Strengthening Project (CBSP) with financial assistance of the International Development Association (IDA). The objective of the project is to develop Bangladesh Bank into an effective and modern central bank through strengthening its capability to play due role as the country's monetary authority as well as regulatory and supervisory authority of the banking sector.
CBSP has the following major components and sub-components:
1.		Strengthening the Legal Framework
2.		Reorganization and Modernization of Bangladesh Bank
	a.	Functional Reorganization
	b.	Automation of BB
	c.	Human Resource Development
3.		Capacity Building
	a.	Strengthening Research Department
	b.	Strengthening Prudential Regulation and Supervision
	c.	Strengthening Accounting and Auditing
In order to ensure coordinated and concerted approach towards achieving the overall objectives of the project, the core team in CBSP Cell is overseeing the implementation of various reform and automation initiatives.

  vii.            Chief Economist's Unit

1. Ensuring key BB policy actions are underpinned by quality economic analysis working collaboratively with different departments. 2. The production of quality working papers as well as policy notes on issues relevant to BB’s objectives related to inflation, growth and financial stability. 3. The drafting of BB’s half-yearly Monetary Policy Statement (MPS) in collaboration with MPD and drafting of the Bangladesh Bank quarterly. 4. Provide guidance and support to relevant departments in drafting of annual Monetary Policy Review, Annual Report, Financial Stability Report, Banking CSR Report etc.

viii.            Common Services Department

Appointment of Consultant, Top Supervisor for preparing drawing, design, estimate, tender documents etc for Civil, Electrical & Mechanical works. . Appointment of contractor for Construction of office and residential buildings. . Repair, maintenance & renovation works of office & Residential buildings. . Appointment of supplier for installation of Electrical & Mechanical equipments. . Purchase of mechanical & electrical equipment and maintenance thereof. . Enlistment of contractors & suppliers for maintenance & renovation works of Civil, Electrical & Mechanical works. . Checking of house building advance estimate, drawing and report on utilization of money for building construction. . Preparing of drawing, estimates & specification for furniture to the Expenditure Management Department as and when required.

    ix.            Credit Information Bureau

Under the existing laws the banks and financial institution are not permitted to extend new credit facilities or renew existing credit facilities to defaulters. Also defaulters are not allowed to participate in parliamentary election, float shares in the capital market, qualify for directorship of banks/financial institutions, insurance companies and CIP (Commercially Important Person)status. In order to facilitate the banks and financial institutions to ascertain the full credit exposure of the borrowers/owners Credit Information Bureau was established in 1992. � CIB collects credit information having outstanding balance of TK. 50,000/- and above on monthly basis from banks and FIs. It also collects defaulted credit card information having outstanding balance of TK. 10,000/- and above on monthly basis from banks and FIS. On the basis of the information contained in CIB database CIB reports are generated. After inauguration of CIB online services on 19 July, 2011 by the honorable Governor, Bangladesh Bank all the CIB reports of their clients using online system. They also can upload credit information of their clients to the online system without any physical interaction.

      x.            Debt Management Department

Bangladesh Bank Order-1972, article 20 and Treasury rules-1998 (Appendix-1, Section-3) empowers Bangladesh Bank for the issue and management of Government securities. As per the above mentioned laws & regulations the Debt Management Department acts as the Debt Manager of the Government in consultation with the Ministry of Finance of the Government of Bangladesh. The main activity of the department is to manage the internal debt of Government. The Department also regulates and supervises the Primary Dealers System. It has the responsibility for development of Government Securities Market. Along with the management of marketable securities, the Department also handles policies and administrative matters pertaining to the flotation of non-marketable National Savings instruments i.e. Sanchayapatras and Sanchayabonds.
The major functions of the Department:
	1.	Formulation of policies regarding issuance of Government securities;
	2.	Preparation of auction calendar for issuance of Treasury Bills and Treasury Bonds;
	3.	Handling operational and administrative matters pertaining to the issue of Special Treasury Bills & Bonds;
	4.	Authorization, regulation and supervision of the Primary Dealer System;
	5.	Developing the market activities like introduction of new instruments, development of clearing and settlement systems and widening of investor base for Government securities;
	6.	Promoting a well functioning debt securities market through building up of a long term yield curve and benchmark securities;
	7.	Strengthening the institutional and legal framework with a view to attract more investment in Govt. securities;
	8.	Clarification and implementation of policies relating to Sanchayapatras and Sanchayabonds;
	9.	Taking measures specially against the fraud and forgery of non-marketable Government securities;
	10	Implementation of the suggestions of Cash and Debt Management Committee (CDMC) regarding development of Secondary Bond Market;"
	11	Preparation of weekly Yield Curve for Treasury Bills and Treasury Bonds based on primary auction;
	12	Trading in Treasury Bills and Treasury Bonds in secondary market;
	13	Preparation of annual budget for Government internal debt servicing;
	14	Monitoring the overnight money market through analysis of daily and monthly consolidated statements of the call money transactions.

    xi.            Department of Banking Inspection

Bangladesh Bank, as the apex institution of banking sector in Bangladesh, is shouldering the responsibility of supervising the activities of commercial banks/Non-Bank Financial Institutions (NBFIs) under article 7(A)f of the Bangladesh Bank Order-1972 (Amendments upto 10th March, 2003), section 44 of the Bank Companies Act-1991, Section-20 of Financial Institutions Act, 1993 and Section-23(1)e of Money Laundering Prevention Act-2009. Article 7(A)f of the Bangladesh Bank Order-1972 (Amendments upto 10th March, 2003) read as to regulate and supervise banking companies and financial institutions. Above mentioned sections of the concerned laws have empowered Bangladesh Bank to examine the books of accounts and related documents/records of the banks/NBFIs with a view to ascertain their financial soundness and quality of portfolios so that banks/NBFIs operation cannot be detrimental to depositors interest in general and to the economy as a whole. Department of Banking Inspection-2(DBI-2) conducts different types of inspection which may be summarized into the following three major categories:
a. Comprehensive/Regular/Traditional inspection. b. Risk based or System inspection and c. Special inspection/Surprise inspection.

Comprehensive inspections are conducted on 7 State-owned Commercial Banks (SOBs) & Development Financial Institutions (DFIs) and 31 Non-Bank Financial Institutions (NBFIs) by this department, as per inspection program, prepared annually and approved by the Deputy Governor. Some key areas of comprehensive inspection are:-
1. Evaluation of assets giving emphasis on classification and provisioning; 2. Assessing capital requirement; 3. Verification of window-dressing relating to profit; 4. Review of liquidity position regarding maintenance of SLR & CRR; 5. Evaluation of loan operation, project financing ; 6. In-depth Analysis of large loans and concentration of credit; 7. Detection of fraud, forgery and action taken thereof; 8. Evaluation of management quality and customer services and 9. Compliance with various guidelines/instructions/circulars issued by Bangladesh Bank, National Board of Revenue, Registrar of Joint Stock Companies and Securities and Exchange Commission as well as respective banks/NBFIs.

  xii.            Department of Communications and Publications

The Department of Communications and Publications(DCP) mainly deals with printing and distributions (within country and abroad) of all types of publications of the bank. It prepares paper clipping and publishes monthly house journal, `Bangladesh Bank Parikrama'. it also liaises with Newspapers, Radio, Television and Mass Media and arranges press briefing/press conferences for the bank authorities. It issues press releases, clarifications and rejoinders, advertisement on behalf of Bangladesh bank. Besides, the department deals with installation and maintenance of murals and paintings in different offices of the bank.  

xiii.            Department of Currency Management

Currency management and Payment Systems is one of the core central banking functions. In compliance with the Bangladesh Bank Order, 1972 the Department of Currency Management and Payment System was organized to procure currency notes and coins and to arrange steady and prompt supply of the same as per needs of the country.

01. CURRENCY MANAGEMENT DIVISION´S FUNCTIONS:

• To procure currency notes and coins of different denominations.
• To ensure steady and smooth supply of bank notes and coins
• To oversee and review policies relating to Cash Department from time to time.
• To issue guidelines in respect of disposal of soiled and non-issue notes.
• To issue policy guidelines in respect of re-issue notes.
• To issue policy guidelines in order to withdraw and payment of exchange value of torn, defective and soiled notes.
• To provide logistic support for smooth functioning of Cash Department.
• To ensure standard policy measures in order to combat counterfeiting of currency notes and to create awareness about forged notes.
• To ensure safe arrangements for preserving and movement of government treasury .

02. PAYMENT SYSTEM´S DIVISION´S FUNCTIONS:

One of the main functions of the Bangladesh Bank is - "to promote, regulate and ensure a secure and efficient payment system, including the issue of bank notes." In fulfilling this mandate and considering the importance of having a state-of-the-art domestic payment and settlement system, Payment Systems Division (PSD) of Department of Currency Management and Payment Systems (DCMPS) has been working to implement secured and efficient modern National Payment and Settlement Systems in the country consistent with international standards.

Recent activities of Payment Systems Division (PSD) are as below:

• Determination of National Payment Systems Strategy,
• Management of Bangladesh Automated Clearing House (BACH) with it s two wings - Bangladesh Automated Cheque Processing System (BACPS) and Bangladesh Electronic Funds Transfer Network (BEFTN),
• Implementation of National Payment Switch (NPS) and e-Payment Gateway (EPG),
• Development of Mobile Financial Services, e-Commerce and m-Commerce,
• Formulation of required policy, guideline, legal & regulatory framework for upcoming modes of payment mechanisms,
• Formulation of Payment Systems Oversight, and
• Development of formal inward remittance delivery channels.

Recent Updates as of March 2012:

Bangladesh Automated Clearing House (BACH): All the 7 clearing regions in major cities like Chittagong, Rajshahi, Khulna, Bogra, Rangpur, Barisal, and Sylhet are connected with the Dhaka Clearing House from October 25, 2011. Moreover, 10 out of 33 branches of Sonali Bank which carry out the clearing functions for Bangladesh bank are now connected to BACH data center at motijheel. Apart from Sonali Branches some areas like EPZ have been connected to the BACH data center, which are selected based on volume and importance of their transactions.

Bangladesh Automated Cheque Processing System (BACPS): At present 1,500,000 (appx.) regular and 90,000 (appx.) high value cheques & other instruments are cleared per month through BACPS which is 95 percent (appx.) of all the clearing instruments are cleared through clearing house. Total amount of regular value instruments cleared is approximately BDT428 billion and it is approximately BDT387 billion for High Value instruments per month. The clearing cycle has been brought down to t+0 for high value cheques and t+1 for regular value cheques throughout the country.

Bangladesh Electronic Funds Transfer Network (BEFTN): BEFTN, started with credit transactions in 28 February 2011, is now offering debit transactions from 15 September 2011. BEFTN facilitates the transmission of payments between the banks electronically, which makes it faster and efficient means of inter-bank clearing over the existing paper-based system by bringing down the operational cost, reducing risk and increasing efficiency of the payments process. Approximately 200,000 EFT Credit transactions and 2000 EFT Debit Transactions are processed per month with an increasing trend. The amount of EFT credit transactions is approximately BDT17.4 billion per month while the amount of debit transactions is BDT1.29 billion.

Mobile Financial Services (MFS): The “Guidelines on Mobile Financial Services for the Banks” have been published in September 2011. Approval has been given for selected M-Commerce activities and circulars were issued to the banks for starting e-Commerce activities. At present 13 banks have started mobile financial services out of 18 banks those got approval.

National Payment Switch (NPS): Implementation activities of National Payment Switch (NPS), a common platform for ATM, POS, Internet and Mobile based payments have been started.

Legal and Regulatory Updates: “Payment Systems Act, 2011” has been sent to the Ministry of Finance (MOF) for approval of the parliament.

xiv.            Department of Financial Institutions and Markets

Department of Financial Institutions and Markets (DFIM) regulates and supervises the Non-Bank Financial Institutions (NBFIs) of Bangladesh. NBFIs are licensed under the Financial Institution Act, 1993 and the Financial Institution Regulation, 1994.

The key functions of this department are addressed below: Issuance of license for setting up of new NBFIs and branches of existing NBFIs under the Financial Institution Act, 1993. Formulation of prudential regulations to ensure the soundness of NBFIs. Monitoring of the activities of NBFIs to ensure corporate governance. Conducting of off-site supervision on NBFIs through collecting, analyzing and monitoring various data/information in regular basis to ensure compliance with policies, regulations and practices by them. Assessment of financial and managerial soundness of NBFIs through CAMEL rating and identification of the shock absorbing capacity through Stress Testing. Assessment and monitoring of the financial instruments issued by NBFIs, viz the issuance of Zero Coupon Bonds, Asset backed Securitization Bonds etc. Implementation of BASEL Accord in NBFIs to ensure Risk Based Capital Adequacy. At present there are 30 NBFIs in Bangladesh. The contribution of financing activities by NBFIs to the overall economy persistently has been increasing.

  xv.            Department of Foreign Exchange Inspection

The Department of Foreign Exchange Inspection (DFEI) has four Divisions viz. a)Foreign Exchange Inspection Division, b)Money Changer Inspection Division, c)Market Studies Cell and d)Implementation Division. The functions of the departments are as follows :
a) Functions of Foreign Exchange Inspection Division:

1. To conduct on-site Comprehensive Inspection on the Authorized Dealer branches of Scheduled Banks as per Annual Inspection Plan.
2. To perform on-site Comprehensive Inspection on the Foreign Exchange and Foreign Trade related activities on the Head offices of Scheduled Banks Annual Inspection Plan.
3. To conduct on-site Comprehensive Inspection on the New Authorized Dealer branches of Scheduled Banks.
4. To carry out on-site comprehensive inspection regarding Foreign Exchange Risk Management of all scheduled banks.
5. To conduct on-site comprehensive inspection of Off-shore Banking Unit (OBU) of scheduled banks.
6. To participate in the Comprehensive/Special Inspection program on foreign branches of Bangladeshi banks and Bangladeshi Exchange Houses working abroad.
7. To prepare inspection Report and Executive Summary after completion of inspection and send the report to the concerned banks for taking necessary actions.
8. To preserve the important and sensitive findings of the on-site inspection in the corporate memory.
9. To carry out on-site inspection on any other subjects/complaints/issues as per instructions of the higher authority.
10. To perform other relevant activities as per requirements.

b) Functions of Money Changer Inspection Division:

1. To conduct on-site Comprehensive Inspection on all the Money Changers half yearly basis.
2. To carry out on-site Comprehensive Inspection on randomly taking 15% Money changers on Quarterly basis.
3. To perform Special Inspection for assessing location and infra-structure suitability/availability of Money Changers as per demand of Foreign Exchange Policy Department.
4. To make surveillance on the complaints regarding un-authorized money changing activities or unauthorized dealings of Money Changers.
5. To prepare Industry Report (Money Changers) on half yearly basis for the kind perusal of higher authority.
6. To prepare Inspection Report after completion of inspection and to send the report to the concerned compliance units.
7. To take necessary actions on findings of the inspection report and to ensure the further compliance.
8. To preserve the important and sensitive findings of the on-site inspection in the corporate memory.
9. To conduct on-site inspection on any other subject/complain as per instruction of the higher authority.
10. To perform other relevant activities as per requirements.

c) Functions of Market Studies Cell

1. To examine and analyze the Reports published in print & electronic media relating to banking and financial issues.
2. To summaries and submit these reports for the kind perusal and necessary instructions of higher authority.
3. To conduct research activities on banking industry.
4. To preserve the important information in the corporate memory.

d) Functions of Implementation Division.

  a) Implementation Section

1. To take necessary actions on findings of the Comprehensive and Special Inspection Reports on Foreign Exchange and Foreign Trade of AD branches and Head Offices of scheduled banks and to ensure the further compliance.
2. To take necessary actions on findings of the Comprehensive Inspection Reports of Head Offices regarding Foreign Exchange Risk Management and to ensure the further compliance.
3. To take necessary actions on findings of the Comprehensive Inspection Report regarding Off-Shore Banking Unit of the scheduled banks and to ensure the further compliance.
4. To take necessary actions on findings of the comprehensive/special inspection report on Foreign Exchange and Foreign Trade of Bangladeshi bank branches and Bangladeshi Exchange Houses working abroad and to ensure the further compliance.
5. To take necessary actions on findings of the Comprehensive /special Inspection Reports of money changer and to ensure the further compliance.

  b) General Section

1. To conduct departmental administrative task by the general section.

xvi.            Department of Off-Site Supervision

To enhance the safety, soundness and stability of the banking system by overseeing individual banks on the basis of various returns/financial statements and ensure banking discipline as well as depositor's interest and confidence in the banking system.   Main Functions   1.Performance analysis and monitoring of the scheduled banks on the basis of CAMELS. Banks having weaknesses in any areas of operation are brought under Early Warning category or Problem Bank category and monitored very closely to improve their performance.   2.Monitoring maintenance of Statutory Liquidity Requirements (CRR, SLR) of scheduled banks. Imposing and realising penal interest and penalty for the shortfall of CRR and SLR.   3.Assessment and monitoring of Capital Adequacy of banks. Review and monitoring of loans/deposits of Government and state owned Enterprises with scheduled banks.   4.Monitoring the overall credit, deposit, investment and liquidity position of the banking system.   5.Monitoring the activities of the state owned commercial Banks (Sonali Bank Ltd.; Janata Bank Ltd. Agrani Bank Ltd. and Rupali Bank Ltd.) and two specialized banks (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank) in accordance with the conditions of MOU signed by the respective banks.   6.Review of the minutes of the Board of Directors, Executive Committee, Board Audit Committee meetings and the audited Financial Statements of scheduled banks and advising the banks to take necessary remedial measures theiragainst.   7. Provide deposit insurance coverage and safety nets to protect depositor's interest and thus enhance market discipline and systemic stability.   8. Review of the Large Loan portfolio of the scheduled banks.   9. Maintaining asset/liability of the liquidated banks and dealing with the court cases relating to the properties of liquidated banks, as official liquidator.
  10. Attending various complaints against the banks (including those relating to Bank Guarantees.)

xvii.            Deposit Insurance Department

Deposit insurance is a system established by the Government to protect depositors against the loss of their deposits in the event that a scheduled bank is unable to meet its obligations to depositors. Deposit Insurance was first introduced in August 1984 as a scheme in terms of ‘‘The Bank Deposit Insurance Ordinance 1984’’. In July 2000 the Ordinance was repealed by an Act called "The Bank Deposit Insurance Act 2000". Deposit Insurance in Bangladesh is now being administered by this Act. In 2006 Bangladesh Bank became the member of International Association of Deposit Insurers (IADI).

Objectives of the department:
Deposit Insurance Scheme is designed to protect small depositors, enhance public confidence, enhance market discipline, enhance stability of the financial system, ensure orderly payment system in case of winding up of any insured bank, Increase savings and encourage economic growth.
There are two divisions in the department.These are :

1. Deposit Insurance Division.
2. Liquidated Bank Monitoring Division.

Function of the department:
The functions accomplished by this department is addressed below;

• Preparation of Half-Yearly (30-June/31-December) Deposit Insurance Premium Worksheet of all scheduled Banks including foreign banks branches operating in Bangladesh.
• Realization of half-yearly Deposit Insurance Premium from all scheduled banks including foreign banks branches operating in Bangladesh
• Premium collected from the insured banks and all other receivables are deposited into an account called the Deposit Insurance Trust Fund (DITF) maintained at the Bangladesh Bank.
• Investment of premium in the Government Securities in time and the income derived from such investments is also credited to the DITF account for further investment.
• Preparation of Statement of Deposit Insurance Premium position on half-yearly and yearly basis.
• Preparation of special statement for Asia Pacific Regional Committee (APRC), IADI , and other International Organizations (WB, IMF etc.) as and when required.
• In case of winding up of an insured bank, BB will pay to every depositors of that bank an amount equal to his/her deposits not exceeding Taka one Lac.
• Preparation of Annual Financial Report of DITF.
• Management of total fixed and liquid assets as well as liabilities of the liquidated banks .
• Management of court cases regarding the liquidated banks through consultation with the legal Retainers .

xviii.            Equity and Entrepreneurship Fund Unit

xix.            quity and Entrepreneurship Fund (EEF) was introduced in the fiscal year 2000-2001 to encourage the investors to invest in the risky but otherwise promising two sectors, viz software industry and food processing and agro-based industry. Bangladesh bank is authorized by the Government to manage the EEF.

.	Objectives of EEF	.	Steps to be taken by the Bank/FI
.	Eligibility for EEF assistance	.	Investment Agreement
.	How much EEF assistance can you get	.	Application form for EEF
.	What to do by the entrepreneurs	.	EEF(ICT) Fund Usage Policy, 2012
.	Contact Address

  xx.            Expenditure Management Department

Brief description of the functions of various Sections of EMD are outlined below: (1) General Section General Administration of the Department ; Compliance of Internal,external and commercial audit memos ; (2) Miscellaneous Payments Section (i) Payment of donation and subscriptions to local and foreign Institutions; (ii) Arrangement for supply of liveries to eligible C & D category staff ; (iii) Payment of coolie/labour charges, washing charges etc. (iv) Payment of paper bills, legal bills, advertisement bills, postal/courier bills and contractor's bills etc. (v) Payment of advance for buying presentation and refreshments for the employees of the Bank who proceeded on PRL. (vi) Payment of local conveyance bills, pocket money, hotel charges etc. for training purposes; (vii) Payment of honorarium to the eligible persons; (viii) Payment all sorts of entertainment bills ; (ix) Payment of bills relating to training conducted by BBTA and other departments of Head Office held in branch offices. (3) Dead Stock and Stationery Section (i) Procurement & maintenance of record & accounting of dead stock and stationery articles; (ii) Maintenance and repair of furniture and fixtures; (iii) Disposal/sale of old/broken dead stock articles; (iv) Supply of all sorts of stationery articles to staff/officer; (v) Allotment of code numbers for new registers/stationery articles etc. (4) Provident Funds Section (i) Maintenance of contributory Provident Funds Accounts; (ii) Payment of gratuity, death benefits etc. (iii) Sanction of PF Advance ; (iv) Arrangement for holding Administrators' meeting ;. (v) Management of Fund. (5) Pension Section (i) Maintenance of General Provident Fund Accounts; (ii) Payment of Commutation money, death benefits etc. (iii) Fixation of monthly pension and supply of pension books to pensioners; (iv) Sanction of GPF Advance; (v) Management of Fund. (6) Telephone Section (i) Arrangement for connection and installation of official/residential /PABX /Direct Telephones, Fax, Telex, E-mail, Internet, SWIFT net connectivity etc; (ii) Procurement of Land Telephone/Mobile set/Fax/Telex /Franking machines and related accessories ; (iii) Repairing of Telephone Fax, Telex, etc. (iv) Payment of monthly Mobile/Telephone/Fax/Telex/Internet bills; (v) Maintenance of PABX and Intercom System. (7) Medical Section (i) Make arrangement for Health Insurance policy and renewal of the policy for ED and above officials & make payment of premium etc. (ii) Payment of Health insurance Bills in case of foreign tours; (8) Travelling Allowance Bills Section. (i) Make advances to employees for travelling home and abroad; (ii) Adjustment of T.A. advance through settlement of T.A. Bills ; (iii) Maintenance of personal accident insurance policy; (9) Expenditure Section (i) Work relating to pest control etc. (ii) Sanction of death benefits and compassionate allowances to the members of the deceased employees of offices (other than Head Office); (iii) Payment of medical allowance to the retired employees. (10) Salaries Section (i) Payment of salaries & allowances; (ii) Disbursement of bonus; (iii) Payment of overtime bills, stipend and leave encashment allowances; (iv) Payment for compassionate allowance for the members of the deceased employees of Head Office; (v) Preparation of Income Tax Assessment sheet on behalf of the employees & payment thereof; (11) Advance Section (i) Sanctioning of various staff advances under Staff Advance Scheme; (ii) Recovery of staff advances; (iii) Calculation of interest of staff advances; (iv) To arrange for conducting physical inspection of land/constructed houses/Flats /Buildings etc. purchased under house building advance scheme ; (v) Maintenance of documents under safe custody & monitoring the utilization of all Advances; (vi) Monitor court cases related to different types of advances.

xxi.            Financial Integrity and Customer Services Department

As per the Administrative Circular No-24, dated 26-07-2012 of Human Resources Department-1 the Former Foreign Exchange Inspection & Vigilance Department is rearranged as a new Department; namely Financial Integrity and Customer Services Department (FICSD) with a view to minimizing fraud and forgery in our banking industry.
The Divisions under Financial Integrity and Customer Services Department (FICSD):
There are three divisions under the Financial Integrity and Customer Services Department (FICSD), namely-

1. Vigilance and Anti-Fraud Division
2. Customer Services Division
3. Technical Services Division

1. The functions of Vigilance� and Anti-Fraud Division:
1. To conduct on-site inspection on consumer complaints which are of a complex nature or that cannot be solved without spot verification.
2. To implement decisions, taken on the basis of on-site inspection/spot verification, requiring corrective action by the banks and other REs regarding legitimate and serious complaints.
3. To inspect banks and other REs for the early warning signs of internal and external fraud and the effectiveness of their internal controls to prevent fraud, in cooperation with the DBIs and DFIM.
4. To conduct investigations proactively when there is probable cause of fraud with banks and other financial institutions, Money Changers, MLM Companies, NGOs etc. and take necessary action on the basis of the findings of the investigation including making criminal referrals when appropriate.�
5. To promote accurate reporting of internal and external fraud at banks and other REs in the news media, in a manner that avoids spurious accusations and reassures customers that BB is aware of, and taking action against, fraudolent activities.
6. To preserve the outstanding findings of the investigation/on-site inspection in the corporate memory.
7. To conduct on-site inspection on any other subject/ complaint as per instruction of the higher authority.
8. To perform other relevant activities.
2. The Functions of the Customer Services Division:

a.       Functions of the Customer Service Policy Unit:

1.      Formolating the guidelines to determine the role of the Board of Directors and the necessary structures and activities in the area of Customer Services and Consumer Protection.

2.      Formolating, revising and developing the policy and procedures related to the resolution of customers complaints from BBs side, as well as minimum standards of performance by the banks and other REs when a customer complaint is received by BB.

3.      Analysing all types of customer service related policies as submitted by banks and other REs to determine compliance with BB standards.

4.      Formolating policy and guidelines on consumer rights, including interest rate and fee disclosures.

5.      Preparing RIT for the collection of information in order to assess the standard of the customer services of the banks.

6.      Circolating the customer services related policies and directives to banks and other REs, departments /offices of Bangladesh Bank and all the concerned parties.

b.      Functions of the Grievance Redressal Unit :

1.      Taking necessary action on the written complaints:

2.      Filtration of the complaints.

3.      Invitation of the opinion/comments/explanation of the concerned banks on the complaints.

4.      Analizing the opinion/comment/explanation sent by the concerned banks and to put up the cases with recommendations.

5.      Implementation of the decision.

6.      Transferring the complaints to the Vigilance and Fraud Prevention Division if it requires a field level investigation.

7.      Preparing the summary and statement of the complaints received by the Department and submitting the same to the Governor on a monthly basis.

8.      Maintaining all time communication with the FICSD of the branch offices of Bangladesh Bank, monitoring their activities, and preparing the consolidated statement on the basis of the monthly statements of complaints received from the branch offices, analyzing andtransmitting the same to the G.M and implementing an appropriate, timely, and relevant decision.

9.      Monitoring the  Complaint Cells of schedoled banks and other REs and preparing the report after analysis of the quarterly reports received from the schedoled banks and other REs, transmitting the same to the higher authority and implementing the decision.

10.  To arrange tri-partite meeting with the General Manager of the Department (FICSD) in the chair to urgently resolve any critical complaint. The tri partite means the accused bank/RE, the complainant and Bangladesh Bank.

11.  Carrying out other related works.

c.       Functions of the Dissemination and Communication Unit :

1.      Receiving the complaints sent over/by telephone, mobile, e-mail and fax during  office time on all the working days (except weekends or government holidays).

2.      Transferring the received complaints to the Grievance Redressal Unit to resolve the same.

3.      Responding to the incoming calls in time and giving answers to the query of the public.

4.      In the cases where it is not possible to give the right answer to the query of the public instantly, the Unit will obtain the right answers from the concerned Sections/Departments and inform the querer as soon as possible.

5.      Maintaining liaison with the banks and other REs, Departments/Offices of Bangladesh Bank and other concerned authorities such as BAB, ABB etc. for resolution of the complaints and protection of the interest of the customers.

6.      Performing the works of publication, public relations and communication with the media, including the creation and maintenance of dedicated pages on the Bangladesh Bank website.

7.      Performing other related works.

                        Functions of the Technical Services Division:

0.      Developing and disseminating policies and guidelines governing the Information and Communication Technology (ICT) activities of banks and other REs, in the areas of audit, business continuity/disaster recovery, development and acquisition, electronic banking, information security, outsourcing, and retail payments.

1.      Conducting in-house training and organizing external training for ICT inspectors.

2.      Conducting on-site inspections to determine compliance with abovementioned policies and guidelines, in cooperation with the DBIs.

3.      Cooperating with the Vigilance and Fraud Prevention Division to investigate cases of possible misuse of the ICT systems for fraudolent purposes.

xxii.            Financial Stability Department

* Examine the stability of the financial system of Bangladesh through macroprudential analysis.

* Monitor international practice and innovations in the area of macroprudential supervision.

* Recommend macroprudential regulations and engage in macroprudential oversight.

* Develop position papers for discussion within BB on key contingency planning matters.

* Monitor liquidity positions of individual banks and financial institutions, the linkages among them, and the liquidity position of the sector as a whole.

* Monitor developments in credit growth and the crowding out of private borrowing by public sector borrowing.

 * Monitor open foreign exchange positions of banks/financial institutions and identify high-risk institutions and their possible implications.

* Monitor developments in the insurance sector as well as capital market participants and their possible feedback effects on banks/financial institutions.

* Assess and quantify financial system risks, vulnerabilities, analyze their outlook and make appropriate policy recommendation for safeguarding financial stability.

 * Conduct stress-testing exercises in order to assess the resilience of the banking system and the potential repercussions on the real economy.

* Oversee the means of payment and the clearing and settlement systems operating in Bangladesh and overall foreign exchange market. * Prepare Financial Stability Report.

xxiii.            Foreign Exchange Investment Department

xxiv.            1. Dealing with the cases of shares transferred to resident by the non-resident and accord permission for outward remittance of the sales proceeds of the shares held by the non-residents of a company incorporated in Bangladesh not listed with Stock Exchange after determining per share value. 2.Dealing with the cases of outward remittances in connection with opening of representative office in abroad by Bangladeshi companies/firms. 3.Dealing with the cases of share lending to a non-resident by the resident as per Section 18(2) of the Foreign Exchange Regulations Act, 1947. 4.Dealing with the cases of outward remittances to meet necessary capital/revenue expenditure to establish exchange houses in abroad by Bangladeshi Banks. 5.Dealing with the cases of capital investment/equity participation in abroad by a Bangladeshi individual/firm. 6.Monitoring of foreign portfolio investment of foreign investors in Bangladesh through NITA. 7.Monitoring the activities of subsidiaries of Bangladeshi companies in abroad established under the directives stated in Para 23 of Ch-16 of the Guidelines for Foreign Exchange Transactions. 8.To accord permission under Section 18A of the Foreign Exchange Regulation 1947 to the individuals/firms/companies to work as agents in Bangladesh of non-resident companies/firms and monitoring repatriation or receiving commission as agent. Agents:

xxv.              Indenting Agent

xxvi.              Buying Agent

xxvii.              Courier Service Agent

xxviii.              Freight Forwarder Agent

xxix.              Shipping Agent

xxx.              General Sales Agent of foreign Airlines

xxxi.              Pre-shipment Inspection Agent

xxxii.              Local Agents

xxxiii.              Satellite Channel Distributors

xxxiv.              Internet Service Provider etc. 9.Releasing funds in favor of Bangladeshi individuals or firms earned as consulting fees or other fees without obtaining prior permission from Bangladesh Bank. 10.To accord permission under Section 18A of Foreign Exchange Regulation Act, 1947 for foreign nationals employed in Bangladesh (those who are employed in branch/liaison offices of foreign companies/firms). 11.To accord permission for opening branch/liaison Office in Bangladesh by foreign entities including airlines, companies, firms under Section 18B of Foreign Exchange Regulation Act, 1947 and monitoring the remittance as sales proceeds thereof. 12.Post-facto checking of profit remittance of branch offices of foreign banks. 13.Post-facto checking of profit remittance of branch offices of foreign companies/firms. 14.Post-facto checking of dividend remittance of foreign share holders of Bangladeshi companies. 15.Post-facto checking of remittance of Royalty/technical know-how/management fees, audit fees, travelers' fees, software fees (training, installation, purchase), travel agents' fees, global health care fees, expatriate's salary, etc. 16.Post-facto checking of remittance of Management fees/salaries/insurance premium, etc. of foreign expatriate of the international hotels, e.g. Pan Pacific Sonargaon Hotel, Hotel Sheraton, Hotel Radisson and Westin. 17.To accord permission for remittance of Management fees/salaries/insurance premium, etc. of foreign expatriate of the international hotel Westin. 18.Formulation of policy/guidelines for service sector as a whole related to permission under Section 18A of Foreign Exchange Regulations Act, 1947. 19.Examination of draft bilateral investment promotion agreements with different countries and international agencies relating to investment and providing opinion as asked by different government authorities on the issue. 20.Providing opinion to various government authorities on service sector industry and its policy matters. 21.Preparing summary statement for the Honorable Governor on the proposals of private sector foreign borrowing sent by the Board of Investment to the Governor as the Chairman of the Private Foreign Loan Scrutiny Committee. 22.Miscellaneous.

xxxv.            Foreign Exchange Operation Department

The Foreign Exchange Operation Department is entrusted with the supervision and monitoring of all the activities in connection with foreign exchange operations. The work of this department is done in terms of Foreign Exchange Regulations Act, 1947 as adapted in Bangladesh and Guidelines for Foreign Exchange Transaction (GFET)
The activities of the department are as follows:
1.	Taking actions against objections under nonpayment of bills of local & back to back L/C.
2.	Preparation of monthly consolidated report on Overdue Bill of Entry as collected from AD bank branches.
3.	Maintaining Database of Overdue Bill of Entry.
4.	Waiving Overdue Bill of Entry.
5.	Revalidation of LCAF value.
6.	Taking actions against of nonpayment of local L/C.
7.	Taking actions against PSI objections.
8.	Approval of Re-export/Re-import matters.
9.	Collection of various statements related to Foreign Exchange Transactions from scheduled banks.
10.	Collection of various statements from different agents who earns foreign currency as commission.
11.	Re-attestation and Post facto checking on Export Realization Certificate.
12.	All works related to Nonresident Blocked accounts.
13.	Collection of statements of money changers on monthly basis, Verification and renewal of license.
14.	Renewal of limited money changing license.
15.	Collection and checking the statements of Airlines/Shipping Lines/Courier Services/PSI/TM Form.
16.	Approval of Satellite Distributors /Medical file/Students Admissions file .
17.	Approval of foreign agents' Commission (maximum 10%).
18.	Matching of EXP Forms, analysis and taking action thereof.
19.	Analysis on Overdue Export bill and taking action thereof.
20.	Other work relating to foreign exchange operation.

xxxvi.            Foreign Exchange Policy Department

The FEPD is responsible for formulating and implementing policies related to foreign exchange and makes institutional arrangements for receipts and payments and settlements with the external world in terms of the authority vested in Bangladesh Bank by the Foreign Exchange Regulation (FER) Act. 1947 as adapted in Bangladesh specifically, 01. It sets the criteria and conditions for holding and dealing in foreign exchange by resident entities and issues licenses to Authorised Dealers and Money Changers. 02. It sets supervisory and monitoring guidelines for offsite and onsite supervision of foreign exchange transactions and formulates & implements instructions regulating inflows and outflows on external settlements in both the current and capital accounts, including external borrowings and amortization payments. 03. It formulates policies and makes institutional arrangements in regards to exchange rates. 04. It maintains liaison between the Bangladesh Government and foreign bilateral/multilateral agencies on the issues of     (I) external trade     (II) receipt and utilization of official grants/Loans     (III) private inflows of remittances, etc. 05. It initiates legal proceedings to address violations of Foreign Exchange Regulation Act-1947 as adapted in Bangladesh. 06. It monitors reporting of foreign exchange receipts against exported goods and receipt of goods against payment��from Bangladesh. 07. It supervises and monitors Authorised Dealers (AD) and ensures compliance of ADs with the prudential supervisory limits on their open exchange positions.

xxxvii.            Forex Reserve & Treasury Management Department

*	Management, maintenance and investment of foreign exchange reserve held by Bangladesh Bank,
*	Maintenance of Clearing Accounts of authorized dealers in foreign exchange,
*	Making transactions in foreign currencies with authorized dealers on cash or spot basis,
*	Settlement of transactions among ACU member countries through ACU mechanism,
*	Repayment of Government external debt including debt servicing and arrangement of miscellaneous outward remittances to meet Government forex requirement,
*	Keeping of the accounts for the funds/ loans received from donors and disbursement thereof, also collection of FC cheques on behalf of Government,

xxxviii.            Governor's Secretariat

01.	The department attends to all matters relating to the meetings of Board of Directors, Executive Committee and Audit Committee. Besides, it arranges meeting of Executive Management Team.
02.	It attends to all matters relating to participation of Bank�s top Executives (Governor and Deputy Governors) in various Meetings, Seminars, Conferences, Symposia and Workshops etc. both in home and abroad.
03.	It prepares different statements (Monthly, Half-yearly and Yearly) regarding Bank�s information and sends those to the concerned ministry.
04.	The department allots 'meeting room' for holding meetings organized by different departments of the Bank.

xxxix.            Internal Audit Department

    xl.            Internal Audit is to provide independent, objective assurance and consulting services designed to add value and improve the Bangladesh Bank operations. It is to help Bangladesh Bank (the Bank) accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. � The scope of work of the Department is to determine whether the Bank's network of risk management, control, and governance processes, as designed and represented by management, is adequate and functioning in a manner to ensure: �

  Risks are appropriately identified and managed.

�

  Interaction with the various governance groups occurs as needed.

�

  Significant financial, managerial and operating information is accurate, reliable, and timely.

�

  Employees' actions are in compliance with policies, standards, procedures, and applicable laws and regulations.

�

  Resources are acquired economically, used efficiently, and adequately protected.

�

  Programs, plans, and objectives are achieved.

�

  Quality and continuous improvement are fostered in the Bank's control process.

�

  Significant legislative or regulatory issues impacting the Bank are recognised and addressed appropriately.

�

  xli.            � Opportunities for improving management control, profitability and the Bank's image may be identified during audits. They will be communicated to the appropriate level of management. � Accountability � Internal Audit Department in the discharge of its duties, shall be accountable to management and the audit committee to: �

  Provide annually an assessment on the adequacy and effectiveness of the Bank's processes for controlling its activities and managing its risks in the areas set forth under the mission and scope of work.

�

  Report significant issues related to the processes for controlling the activities of the Bank and its affiliates, including potential improvements to those processes, and provide information concerning such issues through special reports.

�

  Periodically provide information on the status and results of the annual audit and inspection plan and the sufficiency of department resources.

�

  Co-ordinate with and provide oversight of other control and monitoring functions (risk management, compliance, security, legal, ethics, environmental, external audit).

�

xlii.            � Responsibility � The General Manager and officers of Internal Audit Department have responsibility to: �

  Develop a flexible annual audit & periodical inspection plan using an appropriate risk-based methodology, including any risks or control concerns identified by management and submit that annual audit plan to the audit committee for review and approval as well as periodic updates.

�

  Implement the annual audit & periodical inspection plan, as approved, including as appropriate any special tasks or projects requested by management and the audit committee.

�

  Maintain a professional audit staff with sufficient knowledge, skills, experience, and professional certifications to meet the requirements of the Charter.

�

  Evaluate and assess significant merging/consolidating functions and new or changing services, processes, operations, and control processes coincident with their development, implementation, and/or expansion.

�

  Issue periodic reports to the audit committee and management summarising results of audit activities.

�

  Keep the audit committee informed of emerging trends and successful practices in internal auditing.

�

  Provide a list of significant measurement goals and results to the audit committee.

�

  Assist in the investigation of significant suspected fraudulent activities with the Bank and notify management and the audit committee of the results.

�

  Consider the scope of work of the external auditors and Government, as appropriate, for the purpose of providing optimal audit coverage to the Bank at a reasonable overall cost.

xliii.            Law Department

1. To provide legal opinion to various operational departments of Bangladesh Bank (BB) in relation to the legal issues arising in the performance of their day to day activities.

2. To manage and conduct bank's litigation by engaging appropriate lawyer.

3. To check and verify the draft affidavit in opposition and brief advocates, as and when required.

4. To maintain computerized database of cases filed by/against BB.

5. To liaise and build relationships with lawyers, various departments, ministries, banks and financial institutions.

6. To respond to the legal notices served on BB.

7. To obtain expert opinion from specialist lawyers, retainers and panel lawyers on different legal matters relating to various cases of BB.

8. To vet the chain of documents, Memorandum of Association, Articles of Association, Memorandum of Understanding, Contracts /Agreements etc.

9. To monitor pending court cases and take necessary steps.

10. To scrutinize the bills of advocates related to the bank's cases and arrange for payment.

11. To organize "In house training" for the officers of the various departments and also for the officers of Law Department for their capacity building.

12. To enlist panel/specialist lawyers.

xliv.            Monetary Policy Department

The Monetary Policy Department (MPD) formulates monetary policy in the form of projected growth path of broad money M2 as an intermediate target, consistent with projections for GDP growth and targeted limit for price inflation over each fiscal year.Reserve money (currency in circulation and balances of banks with the Bangladesh Bank) is used as a main instrument for implementation of monetary policy, in the annual reserve money program formulated by MPD. The MPD prepares Monetary Policy Statement - the half-yearly release of Bangladesh Bank's monetary policy stance that is going to be adopted in next six months. The policy stance has been set based on the assessment of the real sector, external sector, and fiscal and monetary developments in preceding six months and the outlook for near future. The MPD arranges the monthly Monetary Policy Committee (MPC) meeting. The MPD issues circulars on monetary policy measures related to the department. The MPD prepares "The Major Economic Indicators: Monthly Update" for reviewing current economic situations of Bangladesh for the meeting of Board of Directors of Bangladesh Bank. The MPD prepares background papers for the auction committee's decisions in the meetings for auction of government treasury bills and treasury bonds. These background papers cover ongoing developments in the overall liquidity situation, government's borrowings from the banking system, various components of broad money, reserve money and macro-economic indicators. Since introduction of repurchase agreement (Repo) and reverse repo MPD has been participating as one of the members of the auction committee. It supplies the required statistics/information to the committee in taking decision and issues press release on the auction result on regular basis. The MPD prepares statements on liquidity forecasting on daily basis for maintaining the excess reserves as well as targeted path of reserve money. The MPD analyses borrowing of scheduled banks from Bangladesh Bank on monthly basis. The MPD works out the nominal and real effective exchange rate indices on continuous basis, with a view to monitoring the external competitiveness of Taka vis-a-vis other major currencies. The MPD prepares fortnightly and monthly reviews of the current economic situation covering developments in real and financial sector of the economy. The MPD monitors net international reserves (NIR), reserve money, broad money and statement on domestic financing with a view to see if any of that variable deviates from the set target. The MPD conducts study on monetary and exchange rate policies and other economic issues. It also provides comments and makes recommendations on various issues like money market, exchange rate, national budget and other international financial affairs.

xlv.            Payment Systems Department

xlvi.            One of the main functions of the Bangladesh Bank is - "to promote, regulate and ensure a secure and efficient payment system, including the issue of bank notes." In fulfilling this mandate and considering the importance of having a state-of-the-art domestic payment and settlement system, Payment Systems Division (PSD) of Department of Currency Management and Payment Systems (DCMPS) has been working to implement secured and efficient modern National Payment and Settlement Systems in the country consistent with international standards.

Recent activities of Payment Systems Division (PSD) are as below:

xlvii.              Determination of National Payment Systems Strategy

xlviii.              Management of Bangladesh Automated Clearing House (BACH) with its two wings -

xlix.            Bangladesh Automated Cheque Processing System (BACPS)

        l.            Bangladesh Electronic Funds Transfer Network (BEFTN)

      li.              Implementation of National Payment Switch (NPS) and e-Payment Gateway (EPG)

    lii.              Development of Mobile Financial Services, e-Commerce and m-Commerce

  liii.              Formulation of required policy, guideline, legal & regulatory framework for upcoming modes of payment mechanisms

  liv.              Formulation of Payment Systems Oversight

    lv.              Development of formal inward remittance delivery channels