Automation and Technological Development:
Banking sector experienced remarkable progress in respect of automation in functioning in last several years. For the pro-active and forward-visioning approach of Bangladesh Bank, numbers of automation initiatives have been implemented in banking sector. These initiatives include:
- Bangladesh introduced the Market Infrastructure (MI) Module for automated auction and trading of government securities.
- To create a disciplined environment for borrowing, the automated Credit Information Bureau (CIB) service provides credit related information for prospective and existing borrowers. With this improved and efficient system, risk management will be more effective. Banks and financial institutions may furnish credit information to CIB database 24 by 7 around the year; and they can access credit reports from CIB online instantly.
- L/C Monitoring System has been introduced for preservation and using the all necessary information regarding L/C by the banks through BB website. This system allows the authorized users of banks to upload and download their L/C information.
- In terms of article 36(3) of Bangladesh Bank Order, 1972, all scheduled banks are subject to submit Weekly Statement of Position as at the close of business on every Thursday to the Department of Off-site Supervision. This statement now is submitted through on-line using the web upload service of BB website within o3 (three) working days after the reporting date which is much more time and labor efficient that the earlier manual system.
- The e-Returns service has been introduced which is An Online Portal Service for Scheduled Banks to submit Electronic Returns using predefined template for the purpose of Macro Economy Analysis through related BB Departments.
- Online Export Monitoring System is used for monitoring export of Bangladesh. Through this service, Banks and AD Branches of Banks issue & reports export report.
- Bangladesh Automated Clearing House (BACH) started to work by replacing the ancient manual clearing system which allows the inter-bank cheques and similar type instruments to be to settled in instant manner.
- Electronic Fund Transfer (EFT) has been introduced which facilitates the banks to make bulk payments instantly and using least paper and manpower.
- The initiation of Mobile Banking has been one of the most noteworthy advancement in banking. Through this system, franchises of banks through mobile operators can provide banking service to even the remotest corner of the country.
- Almost every commercial bank is now using their own core banking solution which has made banking very faster and efficient. Usage of plastic money has much more increased in daily life transactions. Full or partial online banking is now being practiced by almost every bank.
Inauguration of internet trading in both of the bourses (DSE & CSE) in the country is the most significant advancement for capital market in last several years. Micro Finance Institutions submit their reports to the regulator through the Online Report Submission Tools for MFIs.
Through the Central Bank Strengthening Project, there have been a good number of achievements regarding the institutional development in BB which can be observed below:
- The implementation of Enterprise Resource Planning (ERP) has been a big step in automation of operational structure of BB.
- The establishment of Enterprise Data Warehouse (under process) will bring the whole banking and FI industry under a single network through which data sharing, reporting and supervision will enter in a new horizon.
- Bangladesh Bank now possesses the most informative and resourceful website of the country regarding economic and financial information.
- Internal networking system with required online communication facilities have been developed and in operation for the officers of BB.
- BB has hosted number of international seminars on different economic and financial issues over last several years.
MRA was established in 2006 for bringing NGO-MFIs under supervision. For the pro active role of MRA, this sector (MFI) is now in a good shape regarding the accountability and regulation.
For abolishing anomaly and fetching discipline in insurance industry, IDRA was established in 2011. In one year, IDRA has taken number of appreciable steps to regularize this industry.
After the massive crash of local bourses in 2010-2011, the executive body of SEC was redesigned in full and some good results have come after that.
Banking and FI industries have experienced diversified regulatory development over last few years:
- Basel-III has been introduced in a phased manner starting from the January 2015, with full implementation of capital ratios from the beginning of 2019.
- Guidelines on Environmental and Climate Change Risk Management for banks and FIs have been circulated. Policy guidelines on Green Banking also have been issued.
- Guidelines on Stress Testing for banks and FIs have been issued which is aimed to assess the resilience of banks and FIs under different adverse situations.
- Number of Policy initiatives for Financial Inclusion has been undertaken.
- Banks have been asked to build up separate Risk Management Unit for comprehensive and intensive risk management.
- Banks have been instructed to create separate subsidiary for capital market operations and capital market operations of banks are now minutely monitored.
- Supervision has been intensified to increase the participation of banks in Corporate Social Responsibility (CSR).
- For the efficient and timely action of BB, foreign exchange reserve of Bangladesh did not face any adversity during global financial turmoil of 2007-09.
- To meet international standard on Anti Money Laundering (AML)/Combating Financing of Terrorism (CFT) issues, guidelines for Money Changers, Insurance Companies and Postal Remittance have already been circulated.
SEC has updated Public Issue Rules, 2006 and Mutual Fund Rules, 2001. Apart from that, numbers of AMCs, merchant banks and are Mutual Funds are permitted by SEC which has increased the participation of institutional investors. The trend of capital market research has been upward which indicates the potential of analytical investment decision.
Insurance Act 2010 was formulated to meet demand of concurrent time for shifting the insurance industry in a better shape. Apart from that, several initiatives have been undertaken by IDRA for prohibiting the malpractices in the industry regarding insurance commission, agent, premium etc and corporate governance issues.