Bangladesh Bank

Department of Banking Inspection 5   

Name & Designation Email Telephone Fax
A.K.M Sajedur Rahman KhanDeputy Governor880-2-9530417880-2-9530479
Md. Awlad Hossain ChowdhuryExecutive Director880-2-9530443880-2-9530440
Md. Harunur RashidGeneral Manager (G)----

Bangladesh Bank is empowered vide Bangladesh Bank Order 1972 and Section 44 of the Bank Companies Act, 1991 to regulate and supervise the banking companies and financial institutions of the country. The Department of Banking Inspection-5 (DBI-5) is one of the core departments of Bangladesh Bank, which is entrusted with the responsibility of supervising the performance of selected private commercial banks that are operating in the country with special emphasis on regulatory and supervisory compliances. This department conducts on-site inspections periodically, however on-site surveillance receives more emphasis in its way of operations.
At present DBI-5 supervises the activities of the following 11 Private Commercial Banks (PCBs):


01.

Pubali Bank Limited

07.

Bangladesh Commerce Bank Limited

02.

National Bank Limited

08.

Midland Bank Limited

03.

Jamuna Bank Limited

09.

Shimanto Bank Limited

04.

NRB Bank Limited

10.

Community Bank Bangladesh Limited

05.

Trust Bank Limited

11.

Citizens Bank PLC

06.

Dhaka Bank Limited

 

 

Stability and soundness of the country’s financial services industry mostly depends on the smooth operations of the financial system. With a view to ensuring stability in the financial system, DBI-5 examines the books of accounts and related documents/records through on-site inspection of aforementioned bank’s head offices and branches as per schedule or on a surprise basis, when necessary mainly to ensure the safety of the depositor’s money. Moreover, the inspectors examine the books of accounts and related documents/records of these banks on a sample basis in order to ascertain their financial soundness, quality of portfolios, management efficiency and risk exposure so that their operations cannot be detrimental to depositors' interest and to the economy as a whole. Findings of inspections/unearthed irregularities monitored closely through submission of compliance report with supporting documents, as and when required. 
In broad spectrum, functions of DBI-5 can be categorized into following 3 types of on-site inspections:

  • Comprehensive/Regular/Traditional Inspection
  • Core Risk Inspection and
  • Special Inspection.

 

A. Comprehensive Inspection
Comprehensive inspections are conducted as per inspection program prepared annually. Some key areas of comprehensive inspection are:


I.

Evaluation of assets giving emphasis on classification and provisioning;

II.

Assessment of regulatory capital requirement;

III.

Verification of window-dressing relating to profit;

IV.

Review of liquidity position;

V.

Evaluation of loan operation;

VI.

In-depth analysis of large loans and concentration of credit;

VII.

Detection of fraud, forgery, and actions taken against thereof;

VIII.

Evaluation of quality of corporate governance and customer services; and

IX.

Compliance with various guidelines/instructions/circulars issued by Bangladesh Bank as well as other
regulatory authorities (e.g. Ministry of Finance, National Board of Revenue, Registrar of Joint Stock Companies and Firms, Bangladesh Securities and Exchange Commission, etc.).

B. Core Risk Inspection
This department conducts risk based inspections covering following key risk areas:


I.

Credit Risk Management (CRM);

II.

Internal Control and Compliance (ICC);

III.

Asset-Liability Management (ALM);

IV.

Information and Communication Technology (ICT).

C. Special Inspection
Special inspections are carried out in addition to routine inspection programs as per requirements, i.e requirements from other departments (ie. BRPD, DOS etc.) or as per instructions of appropriate authority.
After completion of inspection program, inspection reports are prepared by the inspection teams incorporating their findings and recommendations which are solely meant for compliance by the concerned banks. Based on the findings of the inspection, banks are assigned supervisory ratings using the CAMELS supervisory model. Officials examine and monitor the compliance of findings of inspections and evaluate the bank's actions whether those are adequate enough in respect of the recommendations given in the inspection reports. On various circumstances banks are informed the major areas of supervisory concern that need immediate rectification. If necessary, supervisory discussions are held to ensure drawing up of specific, time-bound and achievable action plan. Moreover, a specific unit, namely Enforcement and Implementation Unit (EIMU), is assigned for intense monitoring of the compliance status of the banks.