Bangladesh Bank performs all core functions of a monetary and financial sector regulator that it is along with a number of other non-core functions. Some of the major functions are the Bangladesh Bank are as follows: * Formulation and implementation of monetary and credit policies. * Management of Bangladesh’s international reserves.
* Issuance of currency notes.
* Regulation and supervision of banks and non-bank financial institutions, promotion and development of domestic financial markets. * Acting as banker to the Bangladesh government.
* Regulation and supervision of the payment system.
* Money laundering prevention.
* Implementation of Foreign Exchange Regulation Act.
* Managing a Deposit Insurance Scheme.
* Collection and furnishing of credit information.
12. Functions of Bangladesh Bank:
Bangladesh Bank performs all the functions that a central bank of any country is expected to perform, and such functions include maintaining the price stability through economic and monetary policy measures, managing the country’s foreign and the gold reserve and regulating the banking sector of the country. Like all other central banks across the globe, Bangladesh Bank is both the Government’s banker and the banker’s bank, a “Lender of the Last Resort”. Bangladesh Bank, like most of the central banks of different countries ,exercises monopoly over the issue of currencyand the bank notes.Except for the 1 and 2taka notes, it issues all other denominations of BangladeshiTaka. i.Core Functions
BB as the central bank of Bangladesh executes all the functions that a central bank traditionally performs as elsewhere in the world. The core functions of BB are briefly discussed as follows:
1.BB formulates and implements monetary policy aiming at stabilizing domestic monetary value and maintaining competitive external per value of taka for fostering growth and development of country’s productive resources in the best national interest.
2.BB formulates and implements intervention policies in the domestic money market and foreign exchange market. BB intervenes the money market with some policy instruments such as. i. Open market operation (treasury bills/bonds, repo, reverse repo auctions) ii.Variations in reserve ratios such as cash reserve requirements (CRR) andstatutory liquidity ratio (SLR) iii.Secondary tradingiv.Discounting rate/ bank rate andv.Moral suasion 3.BB monitors and supervises scheduled banks and non-bank financial instructions(NBFIs) that include off-site supervision and on-site supervision in order to enhance the safety, soundness, and stability of the banking system to ensure banking discipline, protect depositors’ interest and retain confidence in the banking system. 4.BB holds sole responsibility of the management of international reserve representing aggregate of BB’s holding of gold, foreign exchange SDR and reserve position in the IMF 5.BB, as the central bank of Bangladesh reserves sole responsibility to issue bank note 6.BB performs as a clearing house for the scheduled banks to clear and settle inter-bank payment arising through drawing cheque, drafts, bills, etc to one another. 7.BB acts as a banker to the government;
8.BB functions as a lender of the last resort for the government as well as for the country’s scheduled banks; 9.BB acts as an advisor to the government;
10.BB directs the growth expediting programs for the national interest.
Additionally, BB’s functions include some other promotional activities such as development of new instruments, guidelines for money and financial market participants, providing training to the banks and NBFIs, monitoring and encouraging corporate social responsibilities(CSR) executed by banks and NBFIs and so on.
ii. Others activities/ functions:
a) Bank of issue:
The issue of paper money is the most important function of a central bank. In fact the privilege of note-issue...