Department of Banking Inspection 1

Name & Designation Telephone Email Fax
A.K.M Sajedur Rahman KhanDeputy Governor880-2-9530417880-2-9530479
Md. Serajul IslamExecutive Director880-2-9530426--
Md. Anwar HossainGeneral Manager (G)880-2-9589951
Md. Shazzad HossoinGeneral Manager (G)880-2-9511697--

Bangladesh Bank is empowered to regulate and supervise the banking companies of the country vide Bangladesh Bank Order 1972 and Section 44 of the Bank Companies Act 1991. The Department of Banking Inspection-1 (DBI-1) is entrusted with the responsibility of conducting on-site inspection in the conventional private commercial banks registered in Bangladesh.

The banking industry of Bangladesh comprises of 60 scheduled and 5 non-scheduled banks. Out of these banks, 31 domestic conventional private commercial and 1 non-scheduled banks are under the jurisdiction of DBI-1. Bangladesh Bank undertakes on-site inspection of banks to assess their financial health and to evaluate their performance in terms of quality of management, capital adequacy, asset quality, earnings, liquidity position as well as internal control systems. Based on the findings of the inspection, banks are assigned supervisory ratings based on the CAMELS supervisory model and are required to address the weaknesses identified. DBI-1 examines the books of accounts and related documents/records of banks under its jurisdiction mainly to ascertain financial soundness of the banks concerned, with a view to protect the interest of depositors- the major stake holders.

Interaction with external auditor and review of the internal audit report of the concerned bank/branch for determining effectiveness of internal controls and status of compliance with the regulatory requirements is an integrated part of this Department's routine activities.

DBI-1 examines asset quality of the banks on the basis of 31st December and ensures reflection of observation of this inspection in the annual financial statements of the banks. This is ensured through exchanging views in a tri-partite meeting of concerned bank management, external auditors and inspection team before finalization of financial statements.

The inspectors of Bangladesh Bank attend the special board meeting of the banks arranged to discuss irregularities detected in the inspection with a view to ensure proper compliance of the inspection report. It may here be mentioned that it is mandatory for the banks to arrange that meeting within two months from the date of receipt of the inspection report.

In addition, the Department conducts risk based and special inspections. Risk-based inspection is conducted to examine the level of compliance of the Core Risk Management Guidelines by the regulated banks. Core risk inspections are carried out on annual basis that cover risks associated with Credit, Internal Control & Compliance, Asset-Liability Management and Information & Communication Technology. Besides this, special inspections are also carried out to oversee any special issue either instructed by the higher authority, or receiving any complain from the stake holders or by the department itself to investigate into any un-usual issue lies with any bank/branch under it's jurisdiction on self-motivated basis. Department also conducts special inspection on internet & on-line banking system.

DBI-1 keeps surveillance on risk areas of banks/branches as determined through Integrated Supervision System (ISS) Software.

Inspection reports are prepared by the inspection teams incorporating their findings and recommendations are solely meant for compliance by the banks. Varying on circumstances supervisory letters are issued to the banks highlighting the major areas of supervisory concern that need immediate rectification or holds supervisory discussions to ensure drawing up of specific, time-bound and achievable action plan that can be monitored. All these are followed up vigorously. Specific officer is assigned for specific bank to monitor the state of compliance. The department maintains incessant contact with the banks. Concerned officials of the department sit in meeting with the Liaison Committee of the banks at least quarterly to monitor the compliance status and discuss contemporary issues concerned with the banks.

The department, through its policy unit, formulates operational inspection policy as and when required. The department arranges meeting of Supervision Committee presided over by the Deputy Governor, in-charge of supervision on quarterly basis where different policy and operational issues covering supervision are discussed.

DBI-1 is also entrusted with the responsibility of preparing panel of Chartered Accountant firms for conducting statutory audit in commercial banks and non-bank financial institutions. Expertise from the professionals within and outside the Bank is employed in the process of according such approval.