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    Introduction and Functions of Bangladesh Bank

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    tarek_admin
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    Join date: 2012-03-23
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    Location: dhaka

    Introduction and Functions of Bangladesh Bank

    Post  tarek_admin on Sun Mar 25, 2012 1:12 pm

    History

    Start-up: 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, and named it Bangladesh Bank. This reorganization was done pursuant to Bangladesh Bank Order, 1972, and the Bangladesh Bank came into existence with retrospective effect from 16 December 1971.

    Location: Bangladesh Bank headquarter is in Motijheel. The Bank has nine physical branches in Bangladesh, in Motijheel, Sadarghat, Barisal, Khulna, Sylhet, Bogra, Rajshahi, Rangpur and Chittagong.

    Economic Situation: 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.

    Former Governors:

    A.N.M. HamidullaH .........1972-1974
    A.K.N. Ahmed...............1974-1976
    M. Nurul Islam.............1976-1987
    Dr. M. Mahbubul Hakim.......
    Shegufta Bakht Chaudhuri....1987-1992
    Khorshed Alam...............1992-1996
    Lutfar Rahman Sarkar........1996-1998
    Dr. Mohammed Farashuddin....1998-2001
    Dr. Fakhruddin Ahmed........2001-2005
    Dr. Salehuddin Ahmed........2005-2009
    Dr. Atiur Rahman............2009- present


    List of Banks Under Bangladesh Bank:

    State-owned Commercial Banks:

    1. Nationalized Commercial Bank of Bangladesh:
    • Sonali Bank
    • Agrani Bank
    • Rupali Bank
    • Janata Bank

    2. Private Commercial Banks
    • United Commercial Bank Limited
    • Mutual Trust Bank Limited
    • BRAC Bank Limited
    • Eastern Bank Limited
    • Dutch Bangla Bank Limited
    • Dhaka Bank Limited
    • Islami Bank Bangladesh Ltd
    • Uttara Bank Limited
    • Pubali Bank Limited
    • IFIC Bank Limited
    • National Bank Limited
    • The City Bank Limited
    • NCC Bank Limited
    • Prime Bank Limited
    • Southeast Bank Limited
    • Al-Arafah Islami Bank Limited
    • Social Islami Bank Limited
    • Standard Bank Limited
    • One Bank Limited
    • Exim Bank Limited
    • Bangladesh Commerce Bank Limited
    • First Security Islami Bank Limited
    • The Premier Bank Limited
    • Bank Asia Limited
    • Trust Bank Limited
    • Shahjalal Islami Bank Limited
    • Jamuna Bank Limited
    • ICB Islami Bank
    • AB Bank
    • Marcantile Bank Limited

    Foreign Commercial Banks

    • Citibank
    • HSBC
    • Standard Chartered Bank
    • Commercial Bank of Ceylon
    • State Bank of India
    • Habib Bank Limited
    • National Bank of Pakistan
    • Woori Bank
    • Bank Alfalah
    Specialized Development Banks

    • Bangladesh Krishi Bank
    • Rajshahi Krishi Unnayan Bank
    • Progoti Co-operative Landmortgage Bank Limited (Progoti BanK)
    • Grameen Bank
    • The Dhaka Mercantile Co-operative Bank Limited (DMCBL)
    • Bangladesh Development Bank Ltd
    • Bangladesh Somobay Bank Limited(Cooperative Bank)
    • Ansar VDP Unnyan Bank
    • BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited)



    Functions of Bangladesh Bank:

    The powers and functions of Bangladesh Bank are governed by various laws and acts including the- Banker's Books Evidence Act 1891,
    1) Insolvency Act 1920,
    2) Banking Companies Ordinance 1962,
    3) Bangladesh Bank Order 1972,
    4) Foreign Exchange (Regulation) Act 1986,
    5) Money Loan Court Act 1990,
    6) Banking Companies Act 1991,
    7) Financial Institutions Act 1993
    Cool Rules 1994, Companies Act 1994 and
    9) Bankruptcy Act 1997.

    It performs all the functions that a central bank of any country is expected to perform, and such functions include

    • MONETARY POLICY: Formulating and managing the MONETARY POLICY 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.

    • Interest Rate declaration: It sets the required interest rate for the banks as well as for the money market so that it can control the inflation or deflation. It controls certain types of short-term interest rates. These influence the stock- and bond markets as well as mortgage and other interest rates.

    • Banker of the government: The bank acts as the banker of the government and accepts government deposits, cheques and drafts, and undertakes collection of cheques and drafts drawn on other banks. It makes ways and means for advances to the government. The bank also sells government TREASURY BILLs on tender, PRIZE BONDs and different types of saving certificates.

    • Note Issue: like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. Except for the 1 and 2 taka notes, it issues all other denominations of Bangladeshi Taka.

    • Lender of last resort: The bank acts as the lender of last resort for the government as well as for the country's scheduled banks.

    • Credit control: 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.

    • The country's international reserves: Bangladesh Bank is empowered to manage the country's international reserves, which represent aggregate of its holding of -
    a. Gold,
    b. Foreign exchange,
    c. SDR and
    d. Reserves position in the IMF.

    • Representative of the government: 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.

    • Watchdog of the country's BANKS : 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 license/permission from the Bangladesh Bank.

    • Deposit Insurance Scheme: Bangladesh Bank runs a Deposit Insurance Scheme. 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.

    • Clearing house: The bank acts as the clearing house of the scheduled banks.


    • It provides the facility of currency exchange.
    • Job creation,
    • Agricultural development,
    • Industrial development, and
    • Natural resources developments are also the functions of Bangladesh Bank.

    • Economic Growth: By doing these activities Bangladesh bank is ensuring our country’s economic growth and strength.



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