Central Bank Strengthening Project- Bangladesh Bank

8/11/2019 Central Bank Strengthening Project- Bangladesh Bank

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PresentationonCentralBank

Strengthening

Project

(CBSP)

an

its

impact

on

goo

governance

Presentedby

Md.Mezbaul Haque

DeputyGeneralManager,CBSP

Backgroundof

the

Project

Bangladesh Bank started its operation as thecentral bank of the country in 1972 with 11

an s

Bangladesh Bank supported these institutions,government and the nation as well with atotal manpower of around 2000

Over the last few decades, the size of

Bangladesh Economy has grown to manifoldswhich essentially generated enormouseconomic activities in the country which isdepicted in the following table


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2003 2012

No.OfBanks 49 47

NumberofFIs 28 30

Number ofMone Chan ers 236

No. ofMFI 1381 631

GDP(inCrore Taka) 250182 384885

Total Credit(inCrore Taka) 107568 474004

Export (inCrore Taka) 40581 144432

Import nCrore Ta a 64257 240028

Remittance(inCrore Taka) 19869 83005

Total Manpowerofthe

centralbank

5461 4913

Graphshowingchangesindifferenteconomicactivities


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Supportingthesehugeeconomicactivitieswithreduced

level

of

manpower

strength

is

becoming

abigchallengeforBangladeshBank

Forinstances,PADpaymentattimesneedtopay15500governmentcheques inaparticulardatespeciallyatthebeginningofthemonthwhichusuallyneedtobedisposedbetween12to6pm

Ifittakeoneminutetoprocessacheque,itwill

requireat

least

258.33

man

hour

which

requires

atleast43personstocompletethesame

InCIB

we

used

to

receive

6000

request

daily

Wehadtheoptimumcapacityofdisposing

4000reportsperday

Therefore,everydaywehadabacklogof

2000whichcreatedatimelagofoneand

halfmonthforobtainingCIBreport

BBfacedsimilarsituationinmanyofits

functionalitieslike

sale

and

reimbursement

ofsavingscertificate,clearinggovernment

receipt,vaultoperationetc


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Delay/time

lag

in

processing

such

transactions

alwayscreatetheopportunitiesforunfair

prac ces

Ontheotherhandanymistakesinthesehuge

volumeoftransactionsmadethetasksof

reconciliationalmostimpossible

operationwithunmatchedfinancial

statementsof

BB

for

one

and

half

moths.

Asaresultboththeinternalandexternal

governancebecamearealchallengeforBB

Inordertofacethesechallenges,automation

ofitsbusinessprocessesbecameinevitableto

improvetheoverallefficiencyofthebank

Consideringthesechallenges,BBdecidedto

ofitsbusinessprocesseswiththefinancial

assistancefromIDA/Worldbankin2003


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TheProject

Theproject

comprises

several

components

whereweutilizedtheservicesofdifferent

Counsel,AMLAdvisor,ModernizationExpert,NationalandInternationalHRAdvisors,BankSupervisionExpert,ChangeManagementAdvisoretc.

reviewingtheexistingrules,regulations,acts,

policies,manuals

and

procedures

Recommendationshave

been

made

for

required

modificationsandupgradationsinordertomakethembefittingwiththecurrentrequirementofthefinancialsectorofthecountr

IncontinuationofthatMoneyLaunderingPreventionAct,CounterFinancingTerrorismActhavealreadybeenamended.AmendmentshavebeenproposedforBankCompaniesAct,FinancialInstitutionsAct,ForeignExchangeRegulationAct

IslamicBanking

Guidelines,

Risk

Management

Guideline,StresstestingGuideline,ForeignExchangeGuidelines,SupervisionManualhavebeenprepared/revisedandnowinoperation


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APolicyAnalysisUnit(PAU)hasbeenformedand

nowin

full

operation

as

aregular

part

of

the

organization.

hasbeenintroducedconsideringbothworkandcompetencyofanemployee

TNAandtrainingpolicyhavebeenpreparedandimplementedinthebank

withAITandBankofThailandforHRD

Theseinitiatives

have

made

significant

impact

on

internalandexternalgovernanceofBB

Theothermajorcomponentsoftheprojects

arerelatedtotheautomationofbusiness

processesofthebank

Theobjectiveofthislargescaleautomation

initiativesistoenhancetheefficiencyofthe

centralbankandthegovernanceofthe

Theseautomationinitiativesarebeing

implementedunderdifferentprojectsofBB


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The

major

automation

initiatives

undertaken

by

BBarefollowings:

SettingupLAN WAN,InternetandIntranet

EnterpriseResourcePlanning(ERP)

BankingApplicationPackage

EnterpriseDataWarehouse(EDW)

National Pa ment Switch NPS

SystemforMoneyLaunderingPrevention

Departmentto

capture

Cash

Transaction

Reports

andSuspiciousTransactionReport

BangladeshAutomatedClearingHouse(BACH)

andBangladeshElectronicFundTransferNetwork

CIBOnline

Otherinhouseapplicationslikeetendering,EXP

Matching,AccessPassissuance,meetingroom

booking,vehiclerequisition,erecruitmentetc

Modernizationof

Office

Layout


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LAN/WANInternetandIntranet

BankWide

LAN/WAN

Connectivity

has

been

establishedandareinfulloperation

,connectedinasinglenetwork

DataCenterandDisasterRecoverySite(DRS)hasbeenestablished

Around3800PCs,Laptopsarenowconnectednt enetwor

Thisnetwork

is

the

basic

infrastructure

for

all

otherapplicationsrunninginthebank

BB

Intranethas

been

developed

and

are

in

use

by

theofficials

Allrelatedregulations,laws,guidelines,referencearenowavailabletoalltheofficialsofBBthrough

Allemployeerelatedinformationincludingloans,ProvidentFund,training,SalaryetcarenowavailableintheintranetthroughaninterfacewithSAP

Allofficecirculars,officeorders,guidelines,salary

s p,

s a emen s,

oans a emen s,

eren

formsetcarenowavailableinsoftformandBBhasstoppedprintingofthesehugedocuments

AsaresultBBisheadingtowardsitsobjectivesofpaperlessofficeandsavingtheenvironment


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EnterpriseResourcePlanning(ERP)

BBhasimplementedthreemodulesofSAP

MaterialManagement(MM)Module

FinanceandControl(FICO)Module

Implementationoftheapplicationwas

envisagedtoimprovetheinternalgovernance

andefficiencyoftheorganization

EnterpriseResourcePlanning(ERP)ERP 1. H R

Module

HR Leave,Training,

Transfer/Posting,

PersonalFile,

Promotion,

Increment,

Integratedsolution. Once

action

is

takenatoneplace,automatically

otherareaslikesalary,advance,

leavebalance,payrollareaetcwill

beupdated.Nobackendprocessing

xa on, ,

Retirementetc

o eac on srequ re .

Payroll Salary

Management

Integratedsystem. Automated

deductions,accounttransfer,

calculationoftax,postingof

deductionsatdifferentheads,

updatingloanfileetcwillbe

automaticallydone.

Advance Allkinds

of

advanceto

employees

Integratedsystem and

automatically

calculatetheinterestandpostthem

inFICO.Recordallrepayments

automaticallyfrom payroll.

Provident

Fund

Provident Fund

Management

Integratedsystem reducingallthe

backendworkload.


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2. Material

Managem

ent

(MM)

Module

Purchase of

assets,

maintenance

of

asset

register,

Depreciation

run

etc

Is

fully

integrated

with

the

finance

and

will

automatically

update

the

GL

heads

3. FICO Allthefinancial Integratedsolutions.Once

Mo u e transactionsarenow

capturedinthe

systemthroughout

BB.Thesystemis

thenautomatically

preparing the

requiredfinancial

statementsbranch

a t e ranc es,

departmentsandoffices

capturedthetransactions

inthesystem,theA&BD

willbeabletopreparethe

consolidatedfinancial

statement.Thesystemwill

alsobeabletomonitorand

consolidatedbasis.

Thetransactionswill

becaptured

and

postedinthesystem

bytheoriginator.

allocationofvarious

departmentsandoffices.

Banking

Application

PackageObjectives Modules ProspectsAutomatethe

functionalitiesofthe

branchofficesand

CoreBanking Automated alltheprocessesofbanking

transactionsofall thebranchofficesand

FRTMD.Thiscoversallcashreceipt/payment

FRTMD coveringall

typesoftransactions.

transactions,clearing,transfers,remittances,

sanchay patra,Prizebond,WageEarnersbond,

claims,LCs,VaultOperationetc

Treasury

Management

Allthefunctionalitiesofdealingroom,mid

officeandbackofficeis covered.Nowinlive

operation.Allcorporateactionslikematurity

couponpaymentwilltackledbythesystem

ar e

Infrastructure

e

unc ona es

o

e

overnmen

securitiesliketreasurybill,bond,repo,liquidity

support,special bondetchavebeenautomated

coveringbothprimaryandsecondarymarket

operation.Thiswillbringasignificantchangein

thecorporatefundmanagement.


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EnterpriseDataWarehouseObjectives Modules Prospect

A centraldatabasewill

becreatedfor

MonetaryAnalysis

Alldatarelatedmacro economicandmonetaryanalysisiscapturedinthesystemthroughonline

collectionfromthesource.Nophysical

alltypesofdata

relatedto

centralbank.

Thisdatabase

willbe

accessibleby

theusersasper

theirgiven

movementofpeopleandpaperisrequired.All

relatedofficialsareabletoextractdatafromthe

centraldatawarehouseandusethesameintheir

officialjobs.

Prudential

Supervision

AlldatarelatedtosupervisionofbanksandFis is

capturedandstoredinthesystemthroughonline

. .

usethemattheirrequiredtime.

OLTP Alltheonlinetransactionprocessingdatais

capturedandpassedintothesystemwhichare

usedbytherespectiveuserslater on.

National

Payment

Switch

Under

implementation

Objectives

Prospects

Ensuring theinter 1. Willactasan electronicclearing

operabilityofdifferent

paymentchannelinthe

countryinorderto

enhancethetradeand

commercethrougha

robustpaymentsystem

house

2. Willensurerealtimetransactions

butbatchsettlementatthedayend

3. Electronicpaymentthroughcards

willbeenhancedirrespectiveofthe

ownershipofthecard

. .

paymentscanbemadethroughcard

5. Allcreditanddebitcardtransaction

processingcouldbesettledlocally


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SystemforCashTransactionReporting(CTR)and

SuspiciousTransactionReporting(STR)

UNODChasagreedtodeliverandinstallgo

,aso ware eve ope y em n

BangladeshBank

Hardwarerequirementshavebeenfinalized

andareinprocessofprocurement

2012

Bangladesh

Automated

Clearing

House

(BACH)

and

BangladeshElectronicFundTransferNetwork(BEFTN)

Inliveoperationsince07October2010

movementofpeopleandpaper

Interdistrictsettlementofcheques atthesametimeframe

Capacitytohandlelargevolumeoftransactions

salary,paymentofdividend,paymentofrefundwarrantetc.

PaperlesspaymentsettlementthroughBEFTN


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CIBOnlineObjectives

Prospects

Makingthecredit

informationavailableto

1. Bankcangetthe

borrowerscredit

thebanksandfinancial

institutionsinorderto

speedingupthecredit

approvalprocessand

creditadministration

informationonlineand

hencethetimefor

approvaloftheloanwillbe

reduced significantly

2. ThenumberofCIBReport

withthefullcompliance

of

Banking

Companies

Act.

requestcamedownto20

from

5000

6000

per

day3. Nophysicalmovementof

peopleandpaper.

Modernizationof

Office

Layout

ThenewlyinstalledITsystemsneedthe

ro ersecurit andmaintenance

Butthecurrentworkingenvironmentis

extremelyvulnerablefromtheperspectiveof

bothITsecurityandgoodworking

environment

Therefore,BB

decided

to

modernize

its

office

layoutwithcubiclechamberssothatproperIT

securitycanbeensured.


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CurrentOfficeEnvironment

Current

Office

Environment


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OfficeRenovationisinprogress

ModernizedOffice

of

CBSP


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ModernizedOfficeofCBSP

Benefitsderived

Improvedregulatoryframework

Improvedknowledgebase

Im roved and efficient customer service likesalaryofgovt.officialsincludingPrimeMinisterandMinistersarenowbeingpaiddirectlytotheirbankaccountthroughEFT.

Paperlesstransactions

Integratedsolutionsreducingbackendjob

Transparencyand

better

management

BetterGovernance

CommitmenttoEnvironment


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WayForward

Full

fledged

implementation

of

Basel

III GraduationtoIRBapproachforcreditriskorthe

AdvancedMeasurementApproaches(AMA)foroperationalrisk

CooperationinthefieldofstrengtheningsupervisioninlightofBaselII&BaselIII

HumanResourceDevelopment

ITsecurity

pgra nga proce ura manua s n new newITinfrastructure

RTGS

Financialsectorgovernance

ThankYou


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SectionofCBSPDataCenter

Sectionof

CBSP

Data

Center

Central Bank Strengthening Project- Bangladesh Bank

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Transcript of Central Bank Strengthening Project- Bangladesh Bank