This document appears to be a presentation discussing alternative credit control tools used by the Bangladesh Bank (BB). It includes:
1) An introduction to the group members giving their names and roll numbers.
2) Definitions of credit and credit control, noting that credit control tools help the central bank carry out monetary policy.
3) Tables and diagrams showing the various quantitative and qualitative credit control mechanisms used by BB, including reserve requirements, open market operations, and moral suasion.
4) An example of how changes in the bank rate impact other interest rates and the overall cost and supply of credit.
This document is a report submitted by Waseem Ahmed Sandeelo for his Business Communication course at Shah Abdul Latif University Khairpur. It discusses the history and functions of the State Bank of Pakistan. The State Bank was established in 1948 and serves as Pakistan's central bank. It is responsible for monetary policy, banking regulation, and other functions like managing currency and the government's finances. The report provides details on the State Bank's departments, leadership structure including the Governor and Central Board of Directors, and its roles in maintaining price stability, conducting monetary policy, and supporting banking and economic development in Pakistan.
The Bangladesh Bank was established on December 16, 1972 as the central bank of Bangladesh. It was previously known as the State Bank of Pakistan. The Bangladesh Bank is governed by the Bangladesh Bank Order of 1972 and is responsible for regulating the country's currency, monetary policy, and financial system. It oversees various offices across Bangladesh and its objectives include maintaining domestic monetary value, currency value, employment, and economic growth.
This presentation provides an overview of central banking and the roles of Bangladesh Bank. It discusses the key functions of modern central banks, which include maintaining monetary and financial stability. It explains money creation through the money multiplier process and how central banks influence money supply. It outlines Bangladesh Bank's establishment and core functions, including formulating monetary policy and regulating banks. It also reviews Bangladesh's financial system and recent regulatory developments like adopting Basel III standards.
The document discusses credit appraisal processes in the banking sector. It defines credit appraisal as an investigation done by banks to assess the commercial, financial, and technical viability of loans and projects. The credit appraisal process involves evaluating a customer's financial condition, repayment capacity, collateral, and other factors. Banks consider the 3Cs of credit - character, capacity, and collateral. The document then provides details about specific credit appraisal methods, ratios, and processes used by State Bank of India.
The financial system of Bangladesh consists of formal, semi-formal, and informal sectors. The formal sector includes regulated institutions like banks, non-bank financial institutions, insurance companies, and microfinance institutions. The semi-formal sector includes specialized financial institutions like the House Building Finance Corporation that are regulated but fall outside central authorities. The informal sector comprises private intermediaries that are completely unregulated. The key regulators of the financial system include the Bangladesh Bank (central bank), Insurance Development and Regulatory Authority, Securities and Exchange Commission, and Microcredit Regulatory Authority. Banks in Bangladesh are categorized as scheduled or non-scheduled and include state-owned commercial banks, specialized banks, private commercial banks, and foreign commercial banks.
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
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In State Bank of Pakistan, the head is called “Chairman” or “President” of the Bank. And after President there is Five Broad of Directors. SBP has Seven Departments which control the working of the Divisions, Wing, Section and Regional of the state bank of Pakistan.
Red clause letters of credit originated as a means of providing sellers financing for purchases or production of goods. They allowed sellers to receive advances from the issuing or confirming bank before shipment using the letter of credit as collateral. While once common, red clause credits are now rarely used, being largely replaced by other forms of financing. Recent cases discuss liability and remedies under these historical letters of credit, but they remain mostly a thing of the past, confined now to only occasional or niche uses.
This document is a report submitted by Waseem Ahmed Sandeelo for his Business Communication course at Shah Abdul Latif University Khairpur. It discusses the history and functions of the State Bank of Pakistan. The State Bank was established in 1948 and serves as Pakistan's central bank. It is responsible for monetary policy, banking regulation, and other functions like managing currency and the government's finances. The report provides details on the State Bank's departments, leadership structure including the Governor and Central Board of Directors, and its roles in maintaining price stability, conducting monetary policy, and supporting banking and economic development in Pakistan.
The Bangladesh Bank was established on December 16, 1972 as the central bank of Bangladesh. It was previously known as the State Bank of Pakistan. The Bangladesh Bank is governed by the Bangladesh Bank Order of 1972 and is responsible for regulating the country's currency, monetary policy, and financial system. It oversees various offices across Bangladesh and its objectives include maintaining domestic monetary value, currency value, employment, and economic growth.
This presentation provides an overview of central banking and the roles of Bangladesh Bank. It discusses the key functions of modern central banks, which include maintaining monetary and financial stability. It explains money creation through the money multiplier process and how central banks influence money supply. It outlines Bangladesh Bank's establishment and core functions, including formulating monetary policy and regulating banks. It also reviews Bangladesh's financial system and recent regulatory developments like adopting Basel III standards.
The document discusses credit appraisal processes in the banking sector. It defines credit appraisal as an investigation done by banks to assess the commercial, financial, and technical viability of loans and projects. The credit appraisal process involves evaluating a customer's financial condition, repayment capacity, collateral, and other factors. Banks consider the 3Cs of credit - character, capacity, and collateral. The document then provides details about specific credit appraisal methods, ratios, and processes used by State Bank of India.
The financial system of Bangladesh consists of formal, semi-formal, and informal sectors. The formal sector includes regulated institutions like banks, non-bank financial institutions, insurance companies, and microfinance institutions. The semi-formal sector includes specialized financial institutions like the House Building Finance Corporation that are regulated but fall outside central authorities. The informal sector comprises private intermediaries that are completely unregulated. The key regulators of the financial system include the Bangladesh Bank (central bank), Insurance Development and Regulatory Authority, Securities and Exchange Commission, and Microcredit Regulatory Authority. Banks in Bangladesh are categorized as scheduled or non-scheduled and include state-owned commercial banks, specialized banks, private commercial banks, and foreign commercial banks.
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
Facebook: arguni.hasnain
In State Bank of Pakistan, the head is called “Chairman” or “President” of the Bank. And after President there is Five Broad of Directors. SBP has Seven Departments which control the working of the Divisions, Wing, Section and Regional of the state bank of Pakistan.
Red clause letters of credit originated as a means of providing sellers financing for purchases or production of goods. They allowed sellers to receive advances from the issuing or confirming bank before shipment using the letter of credit as collateral. While once common, red clause credits are now rarely used, being largely replaced by other forms of financing. Recent cases discuss liability and remedies under these historical letters of credit, but they remain mostly a thing of the past, confined now to only occasional or niche uses.
The National Bank of Pakistan was established in 1949 under the National Bank of Pakistan Ordinance to act as the central bank where the State Bank of Pakistan did not have a presence. It was initially fully government-owned and handled treasury operations for the government. The bank was incorporated after the partition of India and Pakistan in 1947, when most commercial banks retreated from Pakistan due to the migration of non-Muslims to India, leaving a gap in the banking system. It has since diversified and expanded its services while still maintaining government operations.
The document provides an overview of Bangladesh Bank, the central bank of Bangladesh. It was established in 1971 and has a head office in Motijheel with ten other offices. The vision is poverty eradication and the mission includes formulating monetary policy, maintaining price stability, managing currency and foreign exchange, and regulating the financial system. Key functions of Bangladesh Bank include monetary and credit policy, regulation of banks and non-banks, developing domestic markets, managing reserves, issuing currency, acting as the government's banker, and implementing foreign exchange regulation. Credit control methods include the bank rate, open market operations, and reserve requirements. Recent achievements include remaining unharmed in the global crisis and maintaining inflation and growth.
Overview of Financial System in Bangladesh
Introduction: A financial system is a system that to channels funds from lenders to borrowers, to create liquidity and money, to provide a payments mechanism, to provide financial services such as insurance and pensions and to offers portfolio adjustment facilities. A developed financial system is one that has a secure and efficient payment system, security market and financial intermediaries that arrange financing and derivative markets and financial institutions that provide access to risk management instruments. The present structure of the financial system in Bangladesh comprises of various types of banks, insurance companies, and non-bank financial institutions. Bangladesh Bank is at the top of the banking system and is accountable for assuring prudential administration and central banking activities for all types of banks operating within the banking industry. On the other hand, the Securities and Exchange Commission (SEC) of Bangladesh is the regulatory body for stock-market related activities.
The financial system of Bangladesh is comprised of three broad fragmented sectors: 1) Formal Sector, 2) Semi-Formal Sector, 3 ) Informal Sector.
The sectors have been categorized in accordance with their degree of regulation. The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions (FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant Banks etc.; Micro Finance Institutions (MFIs). The semi formal sector includes those institutions which are regulated otherwise but do not fall under the legal system/ legislation of Central Bank, Insurance Authority, Securities and Exchange Commission or any other enacted financial regulator. This sector is mainly represented by Specialized Financial Institutions like House Building Finance Corporation (HBFC), Palli Karma Sahayak Foundation (PKSF), Samabay Bank, Grameen Bank etc., Non Governmental Organizations. The informal sector includes private intermediaries which are completely unregulated.
The financial market in Bangladesh is mainly of following types:
Money Market:
The primary money market is comprised of banks, FIs and primary dealers as intermediaries and savings & lending instruments, treasury bills as instruments. There are currently 15 primary dealers (12 banks and 3 FIs) in Bangladesh. The only active secondary market is overnight call money market which is participated by the scheduled banks and FIs. The money market in Bangladesh is regulated by Bangladesh Bank (BB), the Central Bank of Bangladesh.
Capital market:
The primary segment of capital market is operated through private and public offering of equity and bond instruments. The secondary segment of capital market is institutionalized by two (02) stock exchanges-Dhaka Stock Exchange and Chittagong Stock Exchange. The instruments in these exchanges are equity securities (shares), debentures, corporate bonds and
The document discusses the role of central banks in economic development. It outlines that central banks aim to promote rising production, employment, and incomes. They do this by expanding financial institutions and credit, maintaining equilibrium between money supply and demand, implementing suitable interest rates, managing public debt, and controlling credit. Central banks also aim to solve balance of payments issues. The document then provides examples of how Bangladesh Bank promotes economic growth and development in Bangladesh through its monetary policy tools and objectives.
Functions of Bangladesh Bank. Term paper prepared for course F-209: Law and Practice of Banking under BBA program of Department of Finance, Faculty of Business Studies, University of Dhaka.
The State Bank of Pakistan was established in 1948 as the central bank of Pakistan after the partition of British India. At the time of partition, Pakistan lacked a central banking system as most banks were headquartered in India. The SBP was created through an ordinance to regulate monetary policy and banking in Pakistan.
As the central bank, the main responsibilities of the SBP include regulating the country's money supply and ensuring the soundness of the financial system through regulating banks and managing foreign exchange reserves. The SBP also aims to promote economic growth through various developmental functions. It serves as the bank of the government and lender of last resort to commercial banks.
The SBP faces challenges in controlling credit growth due to factors
This document discusses the major types of bank deposits in India including savings accounts, recurring deposits, fixed deposits, and current accounts. It provides details on the key features of each type of account such as interest rates, minimum balance requirements, withdrawal limits, and purposes. Additionally, it mentions some newer deposit products introduced by banks that combine elements of different traditional accounts.
This document provides background information on commercial bank operations in Pakistan and other countries. It discusses the history of banks dating back to the 1600s and key developments like the Glass-Steagall Act of 1933. It also summarizes reforms in Pakistan's banking sector in 1997, the functions of commercial banks, sources and uses of bank funds, factors that affect interest rates, and international banking services.
The document provides an academic report on the State Bank of Pakistan (SBP). It discusses the bank's history, vision, mission, core values and goals. It outlines the organizational structure and key departments, including Deposit Accounts, Currency Management, Prize Bond and Saving Certificate, Internal Monitoring, Public Accounts, and General Services. It also includes a SWOT analysis and recommendations to strengthen areas like technology, online data usage, and customer service. The report serves to educate about Pakistan's central bank and its various operations.
The Board of Financial Supervision (BFS) was constituted in 1994 as a committee of the Reserve Bank of India's Central Board to oversee financial sector supervision. The BFS guides the RBI's regulatory and supervisory functions, including monitoring commercial banks, financial institutions, and non-banking finance companies. It aims to ensure the solvency, liquidity, and sound operations of these financial institutions. The BFS meets monthly and is chaired by the RBI Governor, with Deputy Governors and Central Board members as members. It oversees key departments handling supervision and provides directions on regulatory and supervisory issues.
The document provides an overview of the banking industry in Bangladesh. It discusses the structure of the banking sector, which includes state-owned commercial banks, private commercial banks, foreign commercial banks, and specialized banks. It also lists the major banks in each category and provides statistics on the total assets and deposits. Additionally, it gives a brief history of banking in Bangladesh and describes the roles of the central bank and commercial banks. It concludes with information on the growth of Islamic banking in the country.
After the Liberation War and the eventual independence of Bangladesh, the Government of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of the country, naming it Bangladesh Bank. This reorganization was done pursuant to Bangladesh Bank Order, 1972, and the Bangladesh Bank came into existence retroactively from 16 December 1971.
This document discusses the importance of credit monitoring and outlines the key aspects that should be monitored. It defines credit monitoring as tracking the performance of financing facilities from disbursement to repayment. Effective post-sanction monitoring is essential to evaluate asset performance and health over the loan tenure. Key areas that should be monitored include internal and external factors that could impact repayment, utilization of loans, account conduct, financial covenants, and security coverage. Timely identification of issues through monitoring can help prevent delinquency and write-offs.
The State Bank of Pakistan (SBP) is the central bank of Pakistan. It was established in 1948 and is headquartered in Karachi, with a second headquarters in Islamabad. As the central bank, the SBP regulates the banking sector, conducts monetary policy, and oversees financial stability in Pakistan. It uses both direct instruments like reserve requirements and interest rate controls, as well as indirect instruments like open market operations and treasury bill auctions to influence monetary conditions and achieve its policy objectives. The SBP also works to develop the financial system and promote priority sectors in Pakistan.
The document summarizes major scams, irregularities, and heists in the Bangladeshi banking sector over the past decade. It details several instances where state-owned, private, and foreign commercial banks embezzled funds totaling billions of taka through fraudulent loans and money laundering. In response, the Anti-Corruption Commission filed cases against bank officials and borrowers, while the Bangladesh Bank appointed observers or conducted audits at troubled banks. Overall, widespread corruption and mismanagement have undermined the stability and performance of the banking sector.
The Bangladesh Bank is the central bank of Bangladesh, established in 1971 in Dhaka. It formulates monetary policy, regulates banks and foreign exchange, issues currency, and maintains the country's foreign reserves. In 2016, hackers stole $101 million from Bangladesh Bank's account at the Federal Reserve Bank of New York by issuing fraudulent SWIFT payment instructions.
Today, we are having a fairly well developed banking system with different classes of banks – public sector banks, foreign banks, private sector banks – both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the fountain Head of the system.
The Bank for International Settlements (BIS) is an international organization of central banks that fosters monetary and financial cooperation between its member banks. It carries out research and hosts meetings to facilitate collaboration. As a service, it also provides banking services to central banks. The BIS is based in Basel, Switzerland, with offices in Hong Kong and Mexico City. It seeks to make monetary policies more predictable and transparent among its 58 member banks through coordination and scrutiny.
Central banks are institutions that manage a state's currency, money supply, and interest rates. They have a monopoly on increasing the money supply and often print the national currency. The primary functions of central banks are to manage the money supply, act as a lender of last resort during financial crises, promote monetary and financial stability, and oversee the banking system. Central banks also maintain commercial bank reserves and implement monetary policy through tools like open market operations and adjusting interest rates. Several major central banks discussed in the document are the Federal Reserve System, Bank of England, Bank of Japan, and State Bank of Pakistan, each with their own objectives and functions for monetary policy and financial stability.
This document provides 7 guidelines for avoiding bad debt when extending credit to customers. It advises businesses to (1) not make assumptions about a customer's creditworthiness based on name recognition or appearance, (2) be confident by verifying details about the customer's business, (3) have customers fill out paperwork detailing terms and ownership, (4) correctly record business names and addresses, (5) verify phone contact information, (6) check how long businesses have been established, and (7) consider guarantees from directors or parent companies for new businesses. The best way to check customers' credit is through a reputable credit agency.
This document analyzes inflation in Bangladesh. It defines inflation and discusses types such as cost-push and demand-pull inflation. Causes of inflation mentioned include excess money supply, low interest rates, and unemployment. The document examines how inflation is measured in Bangladesh using indices like CPI. Graphs show inflation trends and differences between urban and rural, food and non-food inflation rates. Effects of inflation on the economy are discussed along with measures taken by the Bangladesh government to reduce inflation through monetary and fiscal policies.
The National Bank of Pakistan was established in 1949 under the National Bank of Pakistan Ordinance to act as the central bank where the State Bank of Pakistan did not have a presence. It was initially fully government-owned and handled treasury operations for the government. The bank was incorporated after the partition of India and Pakistan in 1947, when most commercial banks retreated from Pakistan due to the migration of non-Muslims to India, leaving a gap in the banking system. It has since diversified and expanded its services while still maintaining government operations.
The document provides an overview of Bangladesh Bank, the central bank of Bangladesh. It was established in 1971 and has a head office in Motijheel with ten other offices. The vision is poverty eradication and the mission includes formulating monetary policy, maintaining price stability, managing currency and foreign exchange, and regulating the financial system. Key functions of Bangladesh Bank include monetary and credit policy, regulation of banks and non-banks, developing domestic markets, managing reserves, issuing currency, acting as the government's banker, and implementing foreign exchange regulation. Credit control methods include the bank rate, open market operations, and reserve requirements. Recent achievements include remaining unharmed in the global crisis and maintaining inflation and growth.
Overview of Financial System in Bangladesh
Introduction: A financial system is a system that to channels funds from lenders to borrowers, to create liquidity and money, to provide a payments mechanism, to provide financial services such as insurance and pensions and to offers portfolio adjustment facilities. A developed financial system is one that has a secure and efficient payment system, security market and financial intermediaries that arrange financing and derivative markets and financial institutions that provide access to risk management instruments. The present structure of the financial system in Bangladesh comprises of various types of banks, insurance companies, and non-bank financial institutions. Bangladesh Bank is at the top of the banking system and is accountable for assuring prudential administration and central banking activities for all types of banks operating within the banking industry. On the other hand, the Securities and Exchange Commission (SEC) of Bangladesh is the regulatory body for stock-market related activities.
The financial system of Bangladesh is comprised of three broad fragmented sectors: 1) Formal Sector, 2) Semi-Formal Sector, 3 ) Informal Sector.
The sectors have been categorized in accordance with their degree of regulation. The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions (FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant Banks etc.; Micro Finance Institutions (MFIs). The semi formal sector includes those institutions which are regulated otherwise but do not fall under the legal system/ legislation of Central Bank, Insurance Authority, Securities and Exchange Commission or any other enacted financial regulator. This sector is mainly represented by Specialized Financial Institutions like House Building Finance Corporation (HBFC), Palli Karma Sahayak Foundation (PKSF), Samabay Bank, Grameen Bank etc., Non Governmental Organizations. The informal sector includes private intermediaries which are completely unregulated.
The financial market in Bangladesh is mainly of following types:
Money Market:
The primary money market is comprised of banks, FIs and primary dealers as intermediaries and savings & lending instruments, treasury bills as instruments. There are currently 15 primary dealers (12 banks and 3 FIs) in Bangladesh. The only active secondary market is overnight call money market which is participated by the scheduled banks and FIs. The money market in Bangladesh is regulated by Bangladesh Bank (BB), the Central Bank of Bangladesh.
Capital market:
The primary segment of capital market is operated through private and public offering of equity and bond instruments. The secondary segment of capital market is institutionalized by two (02) stock exchanges-Dhaka Stock Exchange and Chittagong Stock Exchange. The instruments in these exchanges are equity securities (shares), debentures, corporate bonds and
The document discusses the role of central banks in economic development. It outlines that central banks aim to promote rising production, employment, and incomes. They do this by expanding financial institutions and credit, maintaining equilibrium between money supply and demand, implementing suitable interest rates, managing public debt, and controlling credit. Central banks also aim to solve balance of payments issues. The document then provides examples of how Bangladesh Bank promotes economic growth and development in Bangladesh through its monetary policy tools and objectives.
Functions of Bangladesh Bank. Term paper prepared for course F-209: Law and Practice of Banking under BBA program of Department of Finance, Faculty of Business Studies, University of Dhaka.
The State Bank of Pakistan was established in 1948 as the central bank of Pakistan after the partition of British India. At the time of partition, Pakistan lacked a central banking system as most banks were headquartered in India. The SBP was created through an ordinance to regulate monetary policy and banking in Pakistan.
As the central bank, the main responsibilities of the SBP include regulating the country's money supply and ensuring the soundness of the financial system through regulating banks and managing foreign exchange reserves. The SBP also aims to promote economic growth through various developmental functions. It serves as the bank of the government and lender of last resort to commercial banks.
The SBP faces challenges in controlling credit growth due to factors
This document discusses the major types of bank deposits in India including savings accounts, recurring deposits, fixed deposits, and current accounts. It provides details on the key features of each type of account such as interest rates, minimum balance requirements, withdrawal limits, and purposes. Additionally, it mentions some newer deposit products introduced by banks that combine elements of different traditional accounts.
This document provides background information on commercial bank operations in Pakistan and other countries. It discusses the history of banks dating back to the 1600s and key developments like the Glass-Steagall Act of 1933. It also summarizes reforms in Pakistan's banking sector in 1997, the functions of commercial banks, sources and uses of bank funds, factors that affect interest rates, and international banking services.
The document provides an academic report on the State Bank of Pakistan (SBP). It discusses the bank's history, vision, mission, core values and goals. It outlines the organizational structure and key departments, including Deposit Accounts, Currency Management, Prize Bond and Saving Certificate, Internal Monitoring, Public Accounts, and General Services. It also includes a SWOT analysis and recommendations to strengthen areas like technology, online data usage, and customer service. The report serves to educate about Pakistan's central bank and its various operations.
The Board of Financial Supervision (BFS) was constituted in 1994 as a committee of the Reserve Bank of India's Central Board to oversee financial sector supervision. The BFS guides the RBI's regulatory and supervisory functions, including monitoring commercial banks, financial institutions, and non-banking finance companies. It aims to ensure the solvency, liquidity, and sound operations of these financial institutions. The BFS meets monthly and is chaired by the RBI Governor, with Deputy Governors and Central Board members as members. It oversees key departments handling supervision and provides directions on regulatory and supervisory issues.
The document provides an overview of the banking industry in Bangladesh. It discusses the structure of the banking sector, which includes state-owned commercial banks, private commercial banks, foreign commercial banks, and specialized banks. It also lists the major banks in each category and provides statistics on the total assets and deposits. Additionally, it gives a brief history of banking in Bangladesh and describes the roles of the central bank and commercial banks. It concludes with information on the growth of Islamic banking in the country.
After the Liberation War and the eventual independence of Bangladesh, the Government of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of the country, naming it Bangladesh Bank. This reorganization was done pursuant to Bangladesh Bank Order, 1972, and the Bangladesh Bank came into existence retroactively from 16 December 1971.
This document discusses the importance of credit monitoring and outlines the key aspects that should be monitored. It defines credit monitoring as tracking the performance of financing facilities from disbursement to repayment. Effective post-sanction monitoring is essential to evaluate asset performance and health over the loan tenure. Key areas that should be monitored include internal and external factors that could impact repayment, utilization of loans, account conduct, financial covenants, and security coverage. Timely identification of issues through monitoring can help prevent delinquency and write-offs.
The State Bank of Pakistan (SBP) is the central bank of Pakistan. It was established in 1948 and is headquartered in Karachi, with a second headquarters in Islamabad. As the central bank, the SBP regulates the banking sector, conducts monetary policy, and oversees financial stability in Pakistan. It uses both direct instruments like reserve requirements and interest rate controls, as well as indirect instruments like open market operations and treasury bill auctions to influence monetary conditions and achieve its policy objectives. The SBP also works to develop the financial system and promote priority sectors in Pakistan.
The document summarizes major scams, irregularities, and heists in the Bangladeshi banking sector over the past decade. It details several instances where state-owned, private, and foreign commercial banks embezzled funds totaling billions of taka through fraudulent loans and money laundering. In response, the Anti-Corruption Commission filed cases against bank officials and borrowers, while the Bangladesh Bank appointed observers or conducted audits at troubled banks. Overall, widespread corruption and mismanagement have undermined the stability and performance of the banking sector.
The Bangladesh Bank is the central bank of Bangladesh, established in 1971 in Dhaka. It formulates monetary policy, regulates banks and foreign exchange, issues currency, and maintains the country's foreign reserves. In 2016, hackers stole $101 million from Bangladesh Bank's account at the Federal Reserve Bank of New York by issuing fraudulent SWIFT payment instructions.
Today, we are having a fairly well developed banking system with different classes of banks – public sector banks, foreign banks, private sector banks – both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of India as the fountain Head of the system.
The Bank for International Settlements (BIS) is an international organization of central banks that fosters monetary and financial cooperation between its member banks. It carries out research and hosts meetings to facilitate collaboration. As a service, it also provides banking services to central banks. The BIS is based in Basel, Switzerland, with offices in Hong Kong and Mexico City. It seeks to make monetary policies more predictable and transparent among its 58 member banks through coordination and scrutiny.
Central banks are institutions that manage a state's currency, money supply, and interest rates. They have a monopoly on increasing the money supply and often print the national currency. The primary functions of central banks are to manage the money supply, act as a lender of last resort during financial crises, promote monetary and financial stability, and oversee the banking system. Central banks also maintain commercial bank reserves and implement monetary policy through tools like open market operations and adjusting interest rates. Several major central banks discussed in the document are the Federal Reserve System, Bank of England, Bank of Japan, and State Bank of Pakistan, each with their own objectives and functions for monetary policy and financial stability.
This document provides 7 guidelines for avoiding bad debt when extending credit to customers. It advises businesses to (1) not make assumptions about a customer's creditworthiness based on name recognition or appearance, (2) be confident by verifying details about the customer's business, (3) have customers fill out paperwork detailing terms and ownership, (4) correctly record business names and addresses, (5) verify phone contact information, (6) check how long businesses have been established, and (7) consider guarantees from directors or parent companies for new businesses. The best way to check customers' credit is through a reputable credit agency.
This document analyzes inflation in Bangladesh. It defines inflation and discusses types such as cost-push and demand-pull inflation. Causes of inflation mentioned include excess money supply, low interest rates, and unemployment. The document examines how inflation is measured in Bangladesh using indices like CPI. Graphs show inflation trends and differences between urban and rural, food and non-food inflation rates. Effects of inflation on the economy are discussed along with measures taken by the Bangladesh government to reduce inflation through monetary and fiscal policies.
The reserve ratio is the proportion of total bank deposits that must be held as cash reserves, as set by the central bank. It is an important tool of monetary policy that helps control money creation and inflation. A higher reserve ratio means banks can loan out less money, thereby restricting money supply. The inverse of the reserve ratio is called the money multiplier, which determines how much new money is created in the economy when the monetary base is increased. Central banks determine reserve ratios for banks of different sizes to regulate their money lending.
This document provides an overview of the Oromia Coffee Farmers Cooperative Union (OCFCU) and its role in establishing the Cooperative Bank of Oromia (CBO) to provide banking services. Some key points:
- OCFCU was established in 1999 with 34 cooperatives and has since grown to 311 cooperatives and over 288,000 member households.
- It helped establish the CBO to give farmers and cooperatives access to credit, and is now a major shareholder and client of the bank.
- OCFCU sells members' coffee, provides social services, and facilitates credit and market access. It has increased coffee sales, profits, and dividends significantly over the past
The document provides an overview of the banking system in Bangladesh. It discusses the history of banking in Bangladesh and outlines some key points:
- Bangladesh Bank is the central bank and was established in 1971. It supervises the banking system and advises the government on monetary policy.
- There are state-owned commercial banks, private commercial banks, foreign commercial banks, and specialized development banks. The major state-owned banks are Sonali Bank, Agrani Bank, and Rupali Bank.
- Private commercial banks include large banks like BRAC Bank, Dutch Bangla Bank, and Islami Bank Bangladesh. Specialized development banks focus on agriculture, microcredit, and development activities.
MONETARY POLICY OF BANGLADESH
Background of the study:
Monetary police in Bangladesh.
Objective of the study.
Literature Review:
Monetary policy of Bangladesh.
Recommendation
Conclusion
Importance of the study.
Objective of monetary policy in Bangladesh.
tools of Monetary policy.
In an interview with Dr. Jing Zhu, Associate Editor of the Biotechnology Journal, we’ve uncovered what authors in Asia Pacific can do to submit better manuscripts. Learn more about her answers and remedies on the following points:
• Tips on choosing the right journal
• What to include in a cover letter
• Resources in Authors Guidelines
• Writing an “attractive” title
• Importance of double-checking
This document discusses inflation in Bangladesh over several chapters:
1. It provides background on inflation, defining it as a sustained increase in general price levels. The main causes are seen as demand-pull (too much money chasing too few goods) and cost-push (increased costs passed on to consumers).
2. Inflation in Bangladesh has recently increased, prompting the central bank to tighten monetary policy. However, inflation is also driven by non-economic factors like profiteering and lack of price monitoring.
3. Charts show Bangladesh's inflation rate averaged 6.65% from 1994-2016, reaching a high of 16% in 2011 and low of -0.03% in 1996,
This document summarizes the key aspects of monetary policy in Bangladesh. It discusses how the central bank uses interest rates and money supply to influence inflation. However, monetary policy faces limitations in Bangladesh due to imperfect markets and the economy's reliance on imports. The transmission of interest rate changes is also weak as banks determine rates collusively. While price stability is ideal, monetary policy alone has limited impact on inflation in Bangladesh given global price influences and excess bank liquidity reducing the central bank's policy instruments.
The document discusses various aspects of credit management and control, including:
1. Liquidity and external methods to improve liquidity such as credit insurance, factoring, and invoice discounting.
2. The credit control process and sources of information on customers both internally and externally.
3. Granting credit, setting up customer accounts, and factors to consider such as ownership, overseas customers, and sales policies.
4. Additional topics covered include discounts, credit insurance, legal considerations around contracts, remedies for breach of contract, and terminology.
This document provides tips for improving credit control procedures. It discusses the importance of effective credit control for business cash flow. It then provides steps businesses can take before, during, and after a sale to improve credit control, such as creating a clear credit control process, knowing customers, compiling stop lists, reviewing performance, and outsourcing credit control if needed. It also discusses tips for chasing unpaid invoices such as updating cash flow forecasts and using debt collection agencies if needed. The overall document aims to provide a comprehensive guide to establishing and maintaining strong credit control.
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3. Introduction to Group Members
Serial Name Roll No.
01. Anik Ahmed 091531
02. Md. Mazharul Islam 091541
03. Sabekun Nahar Shirin 07882734
04. Md. Mahmudul hasan. 091534
05. Md. Mehedi Hassan. 091590
06. Tanzina Islam. 091543
07. Israt Jahan Isita. 091599
08. Kadizatuz Zohara . 091526
09. S. M. Shahidul Islam. 091622
10. Md. Aminul Islam. 091561
Group :-8, 3rdBatch,
Department of Finance
3
4. Law & Practice of Banking
Course code: fin- 1210
Presentation on:
Alternative credit control
tools of Bangladesh Bank
(general discussion)
6. What is credit?
Credit is the provision of resources
(such as granting a loan) by one
party to another party where that
second party does not reimburse
the first party immediately, thereby
generating a debt, and instead
arranges either to repay or return
those resources (or material(s) of
equal value) at a later date. It is any
form of deferred payment. The first
party is called a creditor, also known
as a lender, while the second party
is called a debtor, also known as a
borrower.
7. What is credit control?
Infrequently used powers of
the central bank in carrying
out monetary policy. The
central bank’s authority to
assess surcharges on bank
reserves and impose
reserve requirements on
banks non-bank financial
companies expired.
8. These Credit Control mechanism were used by BB
Credit Control Tools
Quantitative Qualitative
Methods Methods
Statutory
Open Market Variable
Refinancing Liquidity Directors Informal
Operation Reserve
Policy Requirement Methods
Requirement
(SLR)
Cash Reserve
Rediscounting Moral
Bank Rate
Policy
Requirement Additional CRR General Selective Publicity
(CRR) suasion
**BB : Bangladesh Bank
MD. Mehedi Hassan
8
Roll No. 091590
9. Recent Credit control mechanism Used by BB
Credit Control Tools
Quantitative Qualitative
Methods Methods
Open Market Statutory Cash Reserve
Bank Rate Operation Liquidity Requirement Moral suasion Publicity
Requirement (CRR)
(SLR)
Rediscounting
Repo/ Treasury
Policy / Reverse
bill and bond
Repo
**BB : Bangladesh Bank
MD. Mehedi Hassan
9
Roll No. 091590
10. FLOW CHART
Monetary Policy Framework
Policy Instruments: Targets: Goals:
Repo & Reverse (i) Operating Target Price Stability.
Reverse Money
Repo Auctions
Various T-bills Auctions
(ii) Intermediate Target Economic Growth.
Setting SLR & CRR Broad Money
Bank Rate
Information Variables:
Policy Decision: Foreign Reserve.
Based on market
information and judgment of Short- term Interest Rates.
the policy makers.
Liquidity Situation.
Domestic Credit.
Inflation and Exchange Rate.
MD. Mehedi Hassan
10
Roll No. 091590
12. Quantitative Methods
The methods by which Central Bank controls the total amount of credit in the economy are termed as
quantitative methods of credit control.
Bank rate
The rate which central bank lends money to the commercial banks and discounts bill of exchange is
called bank rate. Changes in the bank rate are often used by central banks to control the money supply.
Impacts of Bank Rate Changes
BB Effects:
Effects:
↑ ↓ Increase (other —
(Bank rate) Increase (cost
interest rate,
of credit,
investment, Effects:
CB unemployment,
↑ ↓ export); — An stable
price level);
(Interest rate) Decrease situation is
Decrease
(leakage of found
(Production,
Borrowers domestic
export,
↓ ↑ capital, price —
(Advance) investment).
level, import).
Increase = ↑ ; Decrease = ↓ ; Stable = ‘—’
BB: Bangladesh Bank ; CB: Commercial Bank.
SABEKUN NAHAR SHIRIN
Roll No. 07882734 12
13. Limitations of Bank rate policy
Bank rate policy would not be effective if there lacks strong linkage between bank rate and
market/ interest rate especially for a developing country like Bangladesh.
If commercial banks have excessive money then bank rate may not be effective because they will
lend in lower interest rates though bank rate increases.
Bank may successes during the time of prosperity. Because businessmen become highly ambitious of
their profits in this situation and will borrow money though the interest rate increases.
Reduction in bank rate may not be successful to increase the amount of credit during the time of
depression.
So, bank rate policy has several limitations in its operation. After that it is the best weapon of
central bank to control the amount of credit in the economy.
SABEKUN NAHAR SHIRIN
Roll No. 07882734 13
14. Interest rate
Interest rates targets are also a vital tool of monetary policy and are taken into account
when dealing with variables like investment, inflation, and unemployment.
Reasons for Interest rate change
į1. Risks of investment į4. Deferred consumption
į2. Inflationary expectations į5. Alternative investments
į3. Liquidity preference į6. Taxes
Trends in Bank Rate & Interest Rate
9
8
7 7.02 8
6.95 8
6.88
7.5 6.65 6.72 6.42 6.49
6 7 7 5.93
Percent(%)
6 6 5.36 5.31 5.38 5.34
5 4.9
4 5 5 5 5 5 5
3
2
1
0
Bank Rate Interest rate
SABEKUN NAHAR SHIRIN 14
Roll No. 07882734
15. Effects of Changing Interest rate in Deposit and Lending Rate
High lending rate remains one of the major impediments of investment in Bangladesh.
The BB introduced a 13 per cent interest cap for on lending, except for credit card and consumer
loans and allowed rescheduling of loans without any down payment
With the easing of inflationary pressure and introduction of 13 per cent cap for lending rate for
major sectors, it was expected that the spread would be reduced to a reasonable level.
The present lending and deposit rate are shown here-
Mohammad Mahmudul hasan
15
Roll No. 091534
17. Open market Operation (OMO)
The method by which the central bank controls the amount of credit by selling and buying
government credit instrument is termed as open market operation.
Repo and Reverse Repo are two types of instrument for OMO ,introduced in Bangladesh by BB
from July 2002 and April 2003 respectively.
1.Repo: In a repo, the borrower agrees to sell immediately a security to a lender and also agrees
to buy the same security from the lender at a fixed price at some later date. A repo is equivalent to a
cash transaction combined with a forward contract.
2. Reverse Repo: A reverse repo is simply the same repurchase agreement from the buyer's
viewpoint, not the seller's. Hence, the seller executing the transaction would describe it as a
"repo", while the buyer in the same transaction would describe it a "reverse repo". So "repo" and
"reverse repo" are exactly the same kind of transaction, just described from opposite viewpoints.
MD. MAZHARUL ISLAM.
Roll No. 091541
17
18. The Following Table Summarizes the Terminology
Repo Reverse repo
Borrower Lender
Participant Seller Buyer
Cash receiver Cash provider
Repo and Reverse Repo Rate of last 9 years
Trends in Repo and Reverse Repo Rate
20
18 17.65
16
14
Percent(%)
12
10
9.15 8.65
8 8.25 8.5
7.25
6 6.075 6.3 6.5 6.65
4.95 5.5
4 4.5
3.15 3.7
2 2.5
0
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Repo Reverse Repo
MD. MAZHARUL ISLAM.
Roll No. 091541 18
19. Cash Reserve Ratio (CRR)
The cash reserve requirement (or required reserve ratio or only reserve requirement) is a bank
regulation that sets the minimum reserves each bank must hold to customer deposits and notes.
These reserves are designed to satisfy withdrawal demands, and would normally be in the form of
fiat currency stored in a bank vault (vault cash), or with a central bank.
The reserve ratio is sometimes used as a tool in monetary policy, influencing the country's
economy, borrowing, and interest rates.
Statutory Liquidity Ratio(SLR)
The Bank Company Act of 1991 in section 33(1), the Statutory Liquidity Requirement (SLR) is the
minimum reserve(in percentage of total time and demand liabilities) that a scheduled bank has to
maintain in liquid assets with BB.
The rate was set at 18 percent since 2005. Specialized banks are exempted while banks guided by
Islamic laws are required to keep reserve at the concessional rate of 10 percent.
Tanzina Islam
19
Roll No. 091543
20. The Objectives of SLR
To restrict the expansion of bank credit.
To augment the investment of the banks in Government securities.
To ensure solvency of banks.
Formula
SLR Rate = Total Demand/Time Liabilities x 100%
25
Trends in SLR & CRR
20 20 20 20 20 20 20
20 18 18 18 18
16 16
Percent(%)
15
10
5 5 5 4.5 5 5 5 5
4 4 4 4 4
5
0
SLR CRR
Tanzina Islam
20
Roll No. 091543
21. Moral Suasion
To make the banking system sound and efficient, Bangladesh bank sometimes requests the commercial
banks to increase or decrease credit. As a guardian’s request, commercial banks follow it and thus
amount of credit is controlled in the economy.
For instance, given a non-compliant thrift, the Office of Thrift Supervision may increase the number
of inspections, privately tell executives what needs to be done, and use other persuasive tactics to
change the thrift's behavior, rather than simply reporting the violations and fining it accordingly. The
idea behind moral suasion is that sometimes the threat of punishment changes behavior just as well and
with less embarrassment than punishment itself.
ISRAT JAHAN ISITA
21
Roll No. 091599
22. Publicity
Bangladesh bank applies publicity as a weapon of credit control. Publicity is the deliberate attempt to
manage the public's perception of a subject. Making publicity about the impacts and detriments of
extended credit in the economy, central bank creates public awareness to hold the inflationary trend and
thus credit is controlled indirectly.
Bangladesh bank publishes weekly, fortnightly or monthly bulletins and annual reports where balance
sheets and other business and economic condition of different commercial banks are presented well. As a
result the commercial banks become more careful in the line of their credit creation.
KHADIZATUZ ZOHARA
Roll No. 091526 22
23. For informing mass people Bangladesh bank sometimes organizes different road
show, seminar and many other programs. Recently Bangladesh bank organized “Unnoyoner
Jatra: Road show- Teqnaf to Tetulia on 26th March to 2nd April 2010.”
Thus Bangladesh bank applies various types of measures to control credit in the economy.
But Bangladesh bank should apply different types of method simultaneously rather to use
single method to make credit control effective.
KHADIZATUZ ZOHARA
Roll No. 091526 23
24. In which situation which credit control instrument is used by BB.
Methods of credit control are different in different cases. The methods are followed depending on
analysis and judgments of the nature of economy. Use of some methods cannot give result equally at
all the time and circumstances. BB generally uses its credit control instruments considering and
analyzing the probable reactions that may be created in the market after using these methods.
Natural Disaster: In different natural disaster BB tries to recover the losses of affected people
by taking some steps through issuing some circulars which give order to the CB to take proper steps
to disburse new loan and to re-schedule the existing loan of the farmers and businessmen.
Increase In Reserve: When BB holds extra reserve then it follows expansionary monetary
policy. As per decision of Bangladesh government(BG) Now BB has given emphasis to agriculture
and SME (small and medium entrepreneur) sector. A significant information is that now a farmer
can a open an bank account only at taka 10 and apply for a loan.
S. M. SHAHIDUL ISLAM.
24
Roll No. 091622
25. In which situation which credit control instrument is used by BB.
Before Some Occasions: Before some occasions like Eid there is a tradition in BD economy
that a temporary pressure is created in the market due to huge demand for withdrawing money. To
overcome it BB responses in the form of Repo facility to the CBs to help in fine tuning the market
liquidity situation.
Global Financial Crisis: During global financial crisis BB takes steps very consciously. We
can say about the last global recession. Bangladesh economy showed signs of resilience and
successfully faced the global recession during financial year 2008.
At The Last Year Of Government: Although BB is an independent and autonomous
institution constitutionally therefore it is highly influenced by BG. Generally at the last year of
the government it wants to do a lot of development activities. So as per decision of BG BB uses
the instrument open market operation through treasury bill(T-bill) auctions, government bill
auctions, reverse repo etc. As a result commercial banks find fewer opportunities to extend
advances at that time.
S. M. SHAHIDUL ISLAM.
25
Roll No. 091622
26. In which situation which credit control instrument is used by BB.
When Bank Rate and Variation in Reserve Ratio are Used: Changes in bank rate and
variation in reserve ratio like CRR(Credit Reserve Requirement), and SLR(Statutory Liquidity
Requirement) are some direct instruments which control credit. Recently BB is not changing bank
rate & reserve ratio to control credit. Bank rate is remained unchanged @5%from FY 2004. And
CRR and SLR are also remained unchanged @ 5% and 18% receptively from FY 2006.
When moral suasion is used: Moral suasion involving friendly persuasion and advise so as
to influences the lending policy of the bank. When any unethical practice is done by any CB then
BB uses the instrument Moral Suasion.
At last we can say that when which credit control instrument is used by BB is not fixed . It
depends on situation.
S. M. SHAHIDUL ISLAM.
26
Roll No. 091622
27. What is inflation?
In economics, inflation is a rise in
the general level of price of goods
and services in an economy over a
period of time. A chief measure of
price inflation is the inflation, the
annualized percentage change in a
general price index(normally the
consumer price index) over time.
The inflation rate of FY 2009 is
estimated 6.50.
29. An analysis on inflation
Demand-pull inflation:
caused by increases in aggregate demand due to increased private and government
spending, etc
Cost-push inflation:
called "supply shock inflation," is caused by a drop in aggregate supply (potential
output).
Built-in inflation:
involves workers trying to keep their wages up with prices (above the rate of inflation)
Wage-push inflation:
seen as the key reason behind cost-push inflation
Other:
Import Cost
Exchange Rate
Oil Price
Supply Shortage
Market Syndication
Policy Implications
30.
31. Executive summary:
The research deals with the mechanism of credit control of BD
Bank in perspective of our economy. The study examines the
noteworthy changes of our monetary policy, overnight market and
the uses of credit control apparatus of our central Bank. It has
introduced several new arrangements in recent year (e.g. REPO,
reverse REPO and Interbank repo operation etc.) . The study also
illustrates that Bangladesh Bank is following a vigilantly
accommodative monetary policy to sustain strong public, especially
private sector credit demand and its mechanism of control. This
study will also show, in which circumstances which mechanism
would be appropriate. The experimental results of the present
analysis show that in the perspective of Bangladeshi monetary policy
sometime inflation is not awful for our own betterment.
32. Acknowledgment
The paper is prepared under the course – Law & Practice Of Banking
[ Fin- 1210 ] programme titled “The Alternative Credit Control tools Of
Bangladesh Bank : A General Discussion.”
We are very much grateful for giving this sophisticated topic & advising to
prepare to our honorable faculty member-
MOHAMMAD BAYEZID ALI,
Department Of Finance , Jagannath University, Dhaka.
We would like to acknowledge the valuable research support provided
by - ► Dr. Abul Kalam Azad, DGM
Banking Regulation & Policy Dept, Bangladesh Bank.
► Md. Ezazul Islam , Research Economist & Joint Director
Policy Analysis Unit (pau), Bangladesh Bank
We have benefited advice and comments from –
► Sudhir Chandra Das, GM
HRM Dept, Bangladesh Bank
► Md. Akhtaruzzaman , GM & Senior Research Economists
Policy Analysis Unit , Bangladesh Bank.