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Recent Developments in Financial Sector of Bangladesh
Recent Developments in Financial Sector of Bangladesh
Bangladesh
Institutional Development:
Through the Central Bank Strengthening Project, there have been
a good number of achievements regarding the institutional
development in BB which can be observed below:
The implementation of Enterprise Resource Planning (ERP) has
been a big step in automation of operational structure of BB.
The establishment of Enterprise Data Warehouse (under process)
will bring the whole banking and FI industry under a single
network through which data sharing, reporting and supervision
will enter in a new horizon.
Bangladesh Bank now possesses the most informative and
resourceful website of the country regarding economic and
financial information.
Internal networking system with required online communication
facilities have been developed and in operation for the officers of
BB.
BB has hosted number of international seminars on different
economic and financial issues over last several years.
MRA was established in 2006 for bringing NGO-MFIs under
supervision. For the pro active role of MRA, this sector (MFI) is now
in a good shape regarding the accountability and regulation.
For abolishing anomaly and fetching discipline in insurance
industry, IDRA was established in 2011. In one year, IDRA has
taken number of appreciable steps to regularize this industry.
After the massive crash of local bourses in 2010-2011, the
executive body of SEC was redesigned in full and some good
results have come after that.
Regulatory Development:
Banking and FI industries have experienced diversified regulatory
development over last few years:
Basel-III has been introduced in a phased manner starting from
the January 2015, with full implementation of capital ratios from
the beginning of 2019.
Guidelines on Environmental and Climate Change Risk
Management for banks and FIs have been circulated. Policy
guidelines on Green Banking also have been issued.
Guidelines on Stress Testing for banks and FIs have been issued
which is aimed to assess the resilience of banks and FIs under
different adverse situations.
Number of Policy initiatives for Financial Inclusion has been
undertaken.
Banks have been asked to build up separate Risk Management
Unit for comprehensive and intensive risk management.
Banks have been instructed to create separate subsidiary for
capital market operations and capital market operations of banks
are now minutely monitored.
Supervision has been intensified to increase the participation of
banks in Corporate Social Responsibility (CSR).
For the efficient and timely action of BB, foreign exchange reserve
of Bangladesh did not face any adversity during global financial
turmoil of 2007-09.
To meet international standard on Anti Money Laundering
(AML)/Combating Financing of Terrorism (CFT) issues, guidelines
for Money Changers, Insurance Companies and Postal Remittance
have already been circulated.
SEC has updated Public Issue Rules, 2006 and Mutual Fund Rules,
2001. Apart from that, numbers of AMCs, merchant banks and are
Mutual Funds are permitted by SEC which has increased the
participation of institutional investors. The trend of capital market
research has been upward which indicates the potential of
analytical investment decision.
Insurance Act 2010 was formulated to meet demand of
concurrent time for shifting the insurance industry in a better
shape. Apart from that, several initiatives have been undertaken
by IDRA for prohibiting the malpractices in the industry regarding
insurance commission, agent, premium etc and corporate
governance issues.