Bangladesh Bank

Topics: Central bank, Foreign exchange market, Monetary policy Pages: 8 (2350 words) Published: December 5, 2012
FIN 433
Submitted to: MKB

Name: Rahul Ganguly
ID: 1010731530

Bangladesh Bank is the central bank and regulatory body for Bangladesh. It controls the monetary and financial system; it was established in Dhaka as as per the Bangladesh Bank Order, 1972 with effect from 16th December, 1971. At present it has nine offices located at Motijheel, Sadarghat, Chittagong, Khulna, Bogra, Rajshahi, Sylhet, Barisal and Rangpur in Bangladesh; total manpower stood at 4926 (officials 3910, subordinate staff 1016) as on December 31, 2011.|  |

BB performs all the core functions of a typical monetary and financial sector regulator, and a number of other non core functions. 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. | Roles of Banladesh BankThe central bank has the sole monopoly of note issue in almost every country. The currency notes printed and issued by the central bank become unlimited legal tender throughout the country.The central bank functions as a banker, agent and financial adviser to the government,As a banker to government, the central bank performs the same functions for the government as a commercial bank performs for its customers. It maintains the accounts of the central as well as state government; it receives deposits from government; it makes short-term advances to the government; it collects cheques and drafts deposited in the government account; it provides foreign exchange resources to the government for repaying external debt or purchasing foreign goods or making other payments. As an Agent to the government, the central bank collects taxes and other payments on behalf of the government. It raises loans from the public and thus manages public debt. It also represents the government in the international financial institutions and conferences. As a financial adviser to the lent, the central bank gives advice to the government on economic, monetary, financial and fiscal matters such as deficit financing, devaluation, trade policy, foreign exchange policy, etc. The central bank acts as the bankers' bank in three capacities:(a) custodian of the cash preserves of the commercial banks;(b) as the lender of the last resort; and (c) as clearing agent. In this way, the central bank acts as a friend, philosopher and guide to the commercial banksAs a custodian of the cash reserves of the commercial banks the central bank maintains the cash reserves of the commercial banks. Every commercial bank has to keep a certain percentage of its cash balances as deposits with the central banks. These cash reserves can be utilised by the commercial banks in times of emergency.| |

History of Bangladesh Bank 
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. Thisreorganization was done pursuant to Bangladesh Bank Order, 1972, and theBangladesh Bank came into existence with retrospective effect from 16th December 1971.The highest official in the bank is the Governor .The Governor chairs the Board of Director. The Executive Staff, also headed by the Governor, are responsible for the day to day affairs. Objectives of Bangladesh Bank 

As the central Bank of Bangladesh, the broad objectives of the Bank area) To regulate currency issuance and to keep foreign exchange reserves; b)...
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