Helping Bangladesh’s Banking Sector to grow its full potential

Also available in Bangla

A Government initiative for a strong and effective regulatory and supervisory system for Bangladesh’s banking sector is moving ahead. The World Bank is supporting the Central Bank Strengthening Project (CBSP) to enable Bangladesh Bank to play its role as country’s monetary authority, bank regulator and supervisor.

Under CBSP, the World Bank is assisting Bangladesh Bank in three areas:  (I) Strengthening the Legal Framework; (II) Reorganizing and Modernizing Bangladesh Bank by focusing on (a) Functional Reorganization, (b) Automation, and (c) Human Resources Development; and (III) Capacity Building of Bangladesh Bank focusing on (a) Strengthening the Research Department, (b) Strengthening Prudential Regulations and Bank Supervision, and (c) Strengthening Accounting and Auditing systems.

This project started in 2003 with a World Bank commitment of US$ 37 million, out of a total cost of US$46.13 million. Under this project, a merit based promotion policy has been adopted recently, while international central banking accounting and auditing standards have been introduced. It also strengthened regulations and supervisions by revising regulations on corporate governance, accounting policy, capital adequacy, loan classification and provisioning and foreign exchange and interest rate risk, among others.

Progress on the human resources reforms has been gradual.  The most significant progress is the implementation of the Performance Management System (PMS). A proposal of delinking Bangladesh Bank’s salary and compensation package from the Civil Services is now under active consideration of the government.

The Government is also speeding-up the implementation of Bangladesh Bank automation, and procurement of IT systems, the largest component of the project.

Under a separate arrangement, the World Bank Institute has also helped Bangladesh Bank in setting up a Policy Analysis Unit to spearhead research on all aspects of macroeconomics including monetary policy and central banking.

March 2007

Contacts:
Rezwan-ul-Alam (8802) 815-9015, Ext 4242,      E-mail:  salam3@worldbank.org
for more information on the World Bank in Bangladesh, please visit : www.worldbank.org.bd & www.worldbank.org