The document discusses the functions of central banks and Bangladesh Bank specifically. It provides background on central banks in general, outlining their key responsibilities as controlling the money supply, regulating commercial banks, and acting as a lender of last resort. It then discusses Bangladesh Bank as the central bank of Bangladesh. It notes Bangladesh Bank's roles in developing green banking and financial inclusion policies. Finally, it lists the major functional areas of Bangladesh Bank, which include formulating monetary policy, regulating banks and financial markets, managing foreign reserves, issuing currency, overseeing payments systems, and acting as the government's banker.

1. INSTITUTE OF BUSINESS ADMINISTRATION
JAHANGIRNAGAR UNIVERSITY
ASSIGNMENT NO :01
Topic : Central Bank and it’s function
Submitted To
Md. Alamgir Hossen
Assistant Professor
Course Instructor
Bank Management
[FIN 401]
Submitted By
Fara Ul Fath
Class ID: 2215
Reg. No : 45971
Batch: 26
Date of Submission
17th
April, 2019

2. CENTRALBANK
A central bank is an independent national authority that conducts monetary policy, regulates
banks, and provides financial services including economic research. Its goals are to stabilize the
nation's currency, keep unemployment low, and prevent inflation.
The critical feature of a central bank—distinguishing it from other banks—is its legal monopoly
status, which gives it the privilege to issue bank notes and cash. Private commercial banks are
only permitted to issue demand liabilities, such as checking deposits.
HOW A CENTRALBANK WORKS
Although their responsibilities range widely, depending on their country, central banks' duties
(and the justification for their existence) usually fall into three areas.
First, central banks control and manipulate the national money supply: issuing currency and
setting interest rates on loans and bonds. Typically, central banks raise interest rates to slow
growth and avoid inflation; they lower them to spur growth, industrial activity, and consumer
spending. In this way, they manage monetary policy to guide the country's economy and achieve
economic goals, such as full employment.
Second, they regulate member banks through capital requirements, reserve requirements (which
dictate how much banks can lend to customers, and how much cash they must keep on hand),
and deposit guarantees, among other tools. They also provide loans and services for a nation’s
banks and its government and manage foreign exchange reserves.
Finally, a central bank also acts as an emergency lender to distressed commercial banks and
other institutions, and sometimes even a government. By purchasing government debt
obligations, for example, the central bank provides a politically attractive alternative to taxation
when a government needs to increase revenue.
BANGLADESHBANK
Bangladesh Bank is the central bank of Bangladesh and is a member of the Asian Clearing
Union.
The bank is active in developing green banking and financial inclusion policy and is an
important member of the Alliance for Financial Inclusion, Bangladesh Financial Intelligence
Unit (BFIU), a department of Bangladesh Bank, has got the membership of Egmont Group.
Bangladesh Bank is the first central bank in the world to introduce a dedicated hotline (16236)
for the general populace to complain any banking related problem. Moreover, the organization is
the first central bank in the world to issue a "Green Banking Policy". To acknowledge this

3. contribution, then-governor Dr. Atiur Rahman was given the title 'Green Governor' at the 2012
United Nations Climate Change Conference, held at the Qatar National Convention Centre in
Doha.
FUNCTIONS
The Bangladesh Bank performs all the functions that a central bank in any country is expected to
perform. Such functions include maintaining price stability through economic and monetary
policy measures, managing the country's foreign exchange and gold reserve, and regulating the
banking sector of the country. Like all other central banks, Bangladesh Bank is both the
government's banker and the banker's bank, a "lender of last resort". Bangladesh Bank, like most
other central banks, exercises a monopoly over the issue of currency and banknotes. Except for
the one, two, and five taka notes and coins which are the responsibility of the Ministry of
Finance of the Government of Bangladesh. The major functional areas include:
 Formulation and implementation of monetary and credit policies.
 Regulation and supervision of banks and non-bank financial institutions, promotion and
development of domestic financial markets.
 Management of the country's international reserves.
 Issuance of currency notes.
 Regulation and supervision of the payment system.
 Acting as banker to the government.
 Money laundering prevention.
 Collection and furnishing of credit information.
 Implementation of the Foreign Exchange Regulation Act. 1986
 Managing a deposit insurance scheme.
BRANCH OFFICES
1. Motijheel
2. Sadarghat
3. Bogura
4. Chattogram
5. Rajshahi
6. Barishal
7. Khulna
8. Sylhet
9. Rangpur
10. Mymensingh