Bangladesh Bank has been making efforts to have the people rational on inflation in the context of current global economic situation by preparing half yearly monetary policy report, said a central bank’s statement.

The statement presents an evaluation of the BB’s activities and initiatives taken during the last two years since Dr Atiur Rahman took office as Governor in May 2009.

Apart from conventional regulations, BB went for a sustainable economic development through financial inclusion, poverty alleviation, human resources development along with stabilising the financial sector, it said in the evaluation.

Standard and Poor's and Moody`s, two internationally recognised credit rating agencies, has positively rated Bangladesh BB-and Ba3 respectively in two separate sovereign rating, highlighting world appraisal of country’s economic resilience as well as opening up a horizon of possibility.

The Central Bank’s shifting includes policy level, legal and institutional activities to address the macro-economic challenges, since May 2009 when Dr Atiur Rahman took office as BB chief.

Three key objectives were considered in formulating the monetary policy: reining in inflation, attaining inclusive and equitable economic growth and maintaining overall financial stability.

On the new world economic threshold, BB is revealing half-yearly monetary policy statement for a more pragmatic one to cope with new challenges.

Monetary and credit policies have been made more active to expand financial inclusion along with enhanced financing to agriculture and small and medium enterprises (SME).

Agro sector witnessed both the quantitative and qualitative changes in last two years/since May 2009

A Taka five-billion re-financing scheme, for the first time, to made credit available for the millions of sharecroppers, who are usually left out of the facility.

1,26,686 marginal farmers received more than Tk 2.18 billion as agri-loan up to March 2011.

Besides, farmers are provided with two-percent-interest loan to grow import substitute spices, which is also considered a great success for the regulator.

In 2009-10 fiscal year banks achieved 97 percent of their agro loan disbursement target while they have fulfilled 73 percent of the target in first nine months of current fiscal year.

A major move to financial inclusion is letting marginal farmers open bank accounts with only depositing Tk 10, giving an end to years of deprivation of government subsidies meant for them. Freedom fighters also got the same facility to receive their allowances hassle-free.

9.3 million farmers have so far opened such accounts to enjoy government subsidies and other banking facilities.

From March 2009 to February this year, 764 new bank branches have been opened across the country to make people enjoy financial facility at their doorsteps. Moreover, a new bank-- ‘Expatriate Welfare Bank’ has been opened targeting overseas jobseekers.

SMEs got special priority as BB opened a dedicated department for SMEs. In 2010 it formulated an elaborated policy for SME credit.

Solar energy, bio-gas, effluent treatment plant (ETP), non-polluting brick kilns--all drew special attention of BB under its green financing initiative of creating a Tk 2-billion revolving fund, of which, banks have managed to disburse only Tk 110 million.

BB, meanwhile, issued green banking guidelines to banks and NBFIs to ensure green financing.

A systematic reform in the BB run Equity and Entrepreneurship Fund (EEF) to make dynamic has led to financing of Tk 7.09 billion to 430 agro and 16 ICT projects

Spending Banks and financial institutions under the CSR activities rose to Tk 3.91 billion in 2010, from Tk 550 million in 2009, because BB has made this mandatory for them.

A five-year strategic plan has been chalked out for a more dynamic, efficient & resilient financial system, which strenthenged BB’s regulatory and surveilence structure.

Basel-II implementation is underway in banks and financial institutions to make them more stress tolerent. Regular CAMEL rating and stress testing are also on.

BB’s strict monitoring and active role to keep balance between demand and supply of foreign currency have made the exchange rate stable, while remittance inflow and trade blance remain in favour of the country.

In last two years BB was relentless in its efforts to establish a secure and modern automated payment and settlement system.

Online banking, mobile banking, e-commerce, e-tendering, e-recruitment, automated clearing house, electronic fund transfer (EFT) and online CIB has already been introduced as part of a digital banking system.

News: Daily Sun/Bangladesh/ May-04-2011