Bangladesh Bank, the central bank and apex regulatory body of Bangladesh’s’s monetary and financial system, .
The history of Bangladesh central bank can date back to the ancient Bengal civilization’s economic system . Bengal presidency was one of the strongest economic backbone in whole south Asia. The modern banking in Bengal established by British east India company later The British Raj .
As the first public bank to “offer accounts not directly convertible to coin”, the Bank of Amsterdam established in 1609 is considered to be the “first true central bank”. This was followed in 1694 by the Bank of England, created by Scottish businessman William Paterson in the City of London at the request of the English government to help pay for a war.
The word ‘Bank’ was probably derived from the word ‘bench’ as during ancient time Jews used to do money lending business sitting on long benches. First modern banking was introduced in 1668 in Stockholm as ‘Svingss Pis Bank’ which opened up a new era of banking activities throughout the European Mainland.
The first modern bank in Bengal was Bank of Hindostan, established in 1770 in Calcutta. It was an offshoot of trading company Messrs. Alexander and Co., and operated until 1832 when the trading company failed. The circulation of its notes was limited to Calcutta and its immediate environs. Dhaka Bank started to operate in 1806. Banks established in this region during the British period include Kurigram Bank (1887),General Bank of Bengal and Bihar (1733–75); Bengal Bank (1784–91) (no relation to the later Bank of Bengal); General Bank, later General Bank of India (1786–91); The Commercial Bank (1819–33); The Calcutta Bank (1824–29); Union Bank (1829–48); Government Savings Bank (1833–unknown); and The Bank of Mirzapore (c. 1835 – 1837) Kumarkhali Bank(1896), Mahalaxmi Bank, Chittagong bank(1910), Dinajpur Bank(1914), Comilla Banking Corporation (1914) and Comilla Union Bank(1922) . Major British Banks also had branches in this territory.
The first modern bank headquartered in Dhaka was Dacca Bank, established in 1846. It did a very limited business and did not issue banknotes. It was purchased by Bank of Bengal in 1862.Bank of Bengal opened branches in Sirajganj and Chittagong in 1873, and in Chandpur in 1900. In 1947, upon the Partition of Bengal, it had six branches in East Bengal, in Dhaka, Chittagong, Chandpur, Mymensingh, Rangpur, and Narayanganj .
Bengal presidency was the center of British dominance in India . After independence of Bengal from British rule The central Bank of Bangladesh was ” State Bank of Pakistan ” . Discriminating economical policy of Pakistani central government again pushed Bangladesh to declare independence , and after a bloody war at 1971 Bangladesh gain Independence as a nationalist nation state . Bangladesh Bank established in Dhaka from “Bangladesh Bank Order of 1972 “. Signed by the President ” Sheikh Mujibur Rahaman .
President’s Order No. 127 of 1972
THE BANGLADESH BANK ORDER, 1972
[Whereas, it is necessary to establish a central bank in Bangladesh to manage the
monetary and credit system of Bangladesh with a view to stabilising d omestic monetary
value and maintaining a competitive external par value of the Bangladesh Taka towards
fostering growth and development of country’s productive resources in the best national
Now, THEREFORE, in pursuance of the proclamation of independence of Bangladesh, read
with the Provisional Constitution of Bangladesh Order, 1972, and in exercise of all powers
enabling him in that behalf, the President is pleased to make the following Order:
Bangladesh Bank Building is a skyscraper located in Dhaka, Bangladesh. It is located in Motijheel, the central business district. It rises to a height of 115 metres (377 ft) and has 31 floors. It houses the headquarters of Bangladesh Bank. The building is one of the earliest high-rises in the city. Built in 1985, it was the tallest building in Bangladesh
Functions of Motijheel Office, Dhaka
|Its an operational office of Bangladesh Bank and is headed by an Executive Director. It is the main and biggest branch office of Bangladesh Bank. Its total workforce is about 1150. Its two main departments are Banking Department and Issue Department.
a) Maintains accounts of Govt., Banks, NBFIs, International Bodies like IBRD, ADB. Allows T.T. discounting facilities to scheduled banks, issues and encashes B.D., T.T., D.D. and issues advice to open govt. L/Cs.
b) Collects Govt. deposit using scheduled bank’s cheques by challan through BACH.
c) Deals with ‘Wage Earners Development Bond’, ‘US Dollar Premium Bond’, ‘US Dollar Investment Bond’ and Prize Bonds, Sanchaya Patras etc.
d) Deals with govt. securities i.e Treasury bills, bonds and attends floatation of such securities to public for & on behalf of the govt. through banks & financial institutions, arranges for REPO and Reverse REPO of govt. securities, provides Liquidity Support to the banks, manages Islami Bond and invests its fund to Islami banks & financial institutions.
a) Issues notes, arranges for receipt, custody, examination of fresh and reissuable notes, exchanges soiled & mutilated notes.
b) Sends and receives remittance to and from various chests and sub-chests and ensures steady supply of notes and coins throughout the country.
c) Performs treasury functions i.e. receive money and makes payment for and on behalf of the govt. through its cash dept.
d) Receives deposit from scheduled banks and makes payment of their cheques; Keeps deposit of confiscated gold, silver, foreign currency etc.
e) Maintains accounts of the balances of notes & coins in the chests/sub-chests and Assets of Issue Department including Notes in Circulation, carries out inspection of different chest branches of Sonali Bank, maintains the statement of currency regularly.
Besides, a number of sections of the office are engaged in internal administration, advance & payment, welfare, construction and maintenance activities.
To develop continually as a forwardlooking 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
We at Bangladesh Bank are carrying out its following main functions as the country’s central bank:
|Formulating monetary and credit policies;|
|Managing currency issue and regulating payment system;|
|Managing foreign exchange reserves and regulating the foreign exchange market;|
|Regulating and supervising banks and financial institutions, and advising the government on interactions and impacts of fiscal, monetary and other economic policies.|
We are discharging these functions in a forward looking, proactive, responsive and consultative manner. In our aspiration for ever higher standards of performance we are aware of our limitations in independence, logistics, professional know-how and appropriateness of skill sets in staffing; we are persistent in effort to overcome these limitations. In our work we shall preserve and further strengthen the already earned confidence and trust of the nation, to continue being seen as a respected institution to be emulated. Towards achieving these, our performance commitments to our diverse broad stakeholder groups are as follows:
For the Nation
We shall catalyze and support 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
We shall adopt and implement monetary and credit policies conforming with national priorities, in coordination with government’s fiscal and other macroeconomic objectives. We shall optimize foreign exchange reserves and returns thereon,maintain stability in financial markets curbing excessive volatility, and provide analysis and advice to the government on issues in economic management and development.
For depositors in banks and financial institutions, investors in financial assets
We shall ensure 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. We shall maintain an interest rate structure that provides fair return on financial assets while also supporting growth in the real sector, and we shall promote and support development of markets in bonds and securities.
For banks and financial institutions in Bangladesh
We shall provide 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. We shall issue 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. We shall maintain external sector viability with exchange rate stability and adequate foreign exchange reserves. We shall provide a secure and quick payment settlement system. We shall promote and support development of new financial products, services and instruments.
For banks abroad
We shall maintain a solvent, liquid domestic financial system with precise prudential regulatory, risk management and disclosure framework in line with global best practice standards. We shall maintain external sector viability with exchange rate stability and adequate reserves. We shall maintain a secure, quick payment system for settlement of claims.
For the business community, including farm and non-farm SMEs
We shall 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. We shall foster macroeconomic stability through monetary and external sector management. We shall promote and support development of new financial products, services and instruments. We shall maintain a secure and quick payment system for settlement of claims.
For Bangladeshis abroad
We shall facilitate remittances from your earnings abroad to Bangladesh through legitimate banking channels free of involvement of money launderers or terrorism financiers. We shall support and promote development of new investment opportunities for your remittances to Bangladesh.
For our employees
We shall 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.