The New Nation - Internet Edition

BSS, Dhaka

Massive reform initiatives are underway in banking, monetary and credit policies to bring dynamism to the national economy of the country.

Bangladesh Bank issued directives to all commercial banks to introduce online banking facilities for customers to pay bills, fees of national, autonomous and semi-autonomous bodies along with utility bills to improve and accelerate the quality of client services, and modernise and update the banking system.

According to Bangladesh Economic Review-2009, implementation of "Central Bank Strengthening Project" is under way, which is tasked to formulate and implement a prudent monetary policy, enhance the regulatory capability of Bangladesh Bank to supervise financial institutions.

Besides, establishment of banking policies and regulations that conform to international standards and increase operational efficiency of Bangladesh Bank through computerization are the other highlights of the project.

Under the project, Agrani Bank, Janata Bank and Sonali Bank have been allowed to undertake their business operations as public limited companies (PLCs) under the Banking Companies Act 1991.

Assets, liabilities and the capital of the banks have been transferred to the newly-constituted PLCs by vendor agreements under the section 27A of Bangladesh Bank (Nationalization) Order, 1972.

The banks are now named as Sonali Bank Limited, Janata Bank Limited and Agrani Bank Limited. The reformed banks have prepared "Three-year transitional plans" to revamp their financial positions.

The government has introduced 15-year and 20-year Bangladesh government treasury bond (BGTB) in 2007-08 in order to create a benchmark yield curve of government securities by attracting the long-term investment fund from insurance companies, Provident Fund, Mutual Fund and so on.

Besides, to strengthen the capital base and implement Basel- II accord, the commercial banks have been asked to maintain 10 percent capital of the risk weighted assets and to maintain core capital at least five percent of their risk weighted assets.

Meanwhile, the interest rate of the import credit of the consumer goods like rice, wheat, sugar, edible oil (refined and raw), onion, spices, etc. has been kept at 12 percent temporarily to ensure adequate supply and keep the price level tolerable.