May.31, 2010

Bangladesh Bank has identified 17 strategies in its five-year plan to become a caring regulator for its stakeholders.

In the Strategic Plan 2010-2014, announced yesterday for the first time in its profile, the central bank has set its core focus on agriculture, small and medium enterprises (SMEs) and financial inclusion.

The BB strategies are aimed at addressing its development issues and the changes it needs. It has also framed an action plan for implementing the strategies.

In line with the strategic plan, the branch offices of the central bank will receive feedback from the grassroots farmers and SMEs to make the monetary policy more effective.

"Only becoming a regulator will not do, we will have to be a caring and facilitating regulator to bring in changes," BB Governor Atiur Rahman said at the launch of the plan at Hotel Purbani in Dhaka.

"A roadmap for a shift from our present condition to the goal we will reach in the next five years has been drawn in the plan."

All BB departments and branch offices will drill down the strategies into performance management system-compatible components such as key performance area, performance outcome and timeline.

The central bank governor said: "If the mindset is not changed, no change will come. No doubt we will make mistakes, but we will learn from it and will not repeat the same mistake."

According to the plan, the BB would conduct a business confidence survey and develop a 'house price index time series' for making the monetary and macroeconomic issues more pragmatic.

The central bank also plans a financial inclusion impact survey to investigate the extent to which agriculture and SME finance are contributing to output growth and poverty reduction.

The BB will develop separate financial stability unit specialised in identifying and assessing potential risk areas, and recommend prompt corrective actions.

The plan will ensure effectiveness of national taskforce and coordination committee to enhance regulatory and supervisory framework against money laundering.

The plan also envisages suitable amendment to Money Laundering Prevention Act 2009, and Anti-terrorism Act 2009.

Forming inter-agency coordination committee and arranging periodic meeting with law enforcement agencies are also the aims of the plan for an effective coordination to control money-laundering activities.

For increased emphasis on meeting financing needs of agriculture and SMEs, the BB will support partnerships of banks with microfinance institutions and mobile telephone operators for delivery of financial services to the clients in the remote rural areas.

Various steps will be taken to promote online banking, e-commerce and e-payments. The central bank will establish 'National Payment Switch' bringing about interoperability of the existing e-payment networks in cooperation with the government.

To modernise the interface between the existing software and newly built ICT platforms and enhance the scope of intranet portal, it will expand the existing intranet portal. The BB will also track compliance and change status in major functional and operational areas.

The plan said Islamic banking flourished in Bangladesh as elsewhere. Supervisory and regulatory provisions for Islamic banking need to be spelt out more elaborately than at present. The central bank will review the existing regulatory and supervisory practices in light of international standards drawn up by Islamic Financial Services Board.

For the banks that conduct both conventional and Islamic banking, the BB will identify the needs for segregation ensuring appropriate treatment of conventional and Islamic banking deposits.

The central bank has formulated the strategic plan after discussions with different banks, financial institutions, development partners and other stakeholders.

BB Deputy Governor Murshid Kuli Khan and other high officials spoke at the launching ceremony, also addressed by high officials of different banks and financial institutions and development partners.