A huge pie of 1st phase spent on foreign tours of BB staff
Bangladesh Bank (BB) is keen to embark on a second phase of capacity building under the Central Bank Strengthening Project (CBSP) to further streamline its functional supervision and enforce tight banking regulations and monitoring, officials in the central bank said.
The proposed project would help ensure the highest degree of regulatory compliance by banks and financial institutions given their recent loan scams and credit mismatch amid lax BB monitoring on scheduled banks, they said.
The strengthening project is expected to be financed by the World Bank (WB), a communication made last week from the BB governor Atiur Rahman to finance minister AMA Muhith, reveals.
‘We have spent 89.14 per cent of the IDA fund [$46.13 million] and are continuing the implementation of few components with BB’s own fund. Building on these positive changes, we would like to proceed with a follow-on project with a brief list of probable components of the proposed project attached for your ready reference,’ reads the proposal of the central bank chief.
Finance officials said they have no reservation in principle to give a go-ahead to BB’s move to launch the second phase of CBSP but pointed to unnecessary foreign tours of BB officials that took place under the original CBSP project’s fund.
‘Unnecessary foreign tours in the name of trainings and workshops could be curtailed under the proposed project and be approved shortly,’ a senior official in the Ministry of Finance (MoF) told New Age on Tuesday.
‘We are supportive to the causes of capacity building and strengthening prudential regulations and supervision of central bank given the fragility in overall management of scheduled banks in recent period.’
The probable areas for CBSP phase-2 are : developing infrastructure, capacity building of BB and its automation.
Highlighting on infrastructure building in financial sector as a major component of the project, the proposal said such networking infrastructure would cater all operating banking companies and other non-banking financial institutions under an inclusive financial network.
Besides, BB’s branch office renovation will also fall under the infrastructure component, the BB proposal said.
Under the area of BB’s capacity building, three major objectives to strengthen the central bank will be achieved, it hoped.
The capacity building in the area of BASEL-2 implementation, strengthening supervision, accounting, audit, research, statistics and bond market development are the basic focus for new drive, while appointing Advisors in the area of human resource reform and information technology integration and twinning arrangements with other central banks to exchange experiences are the remaining priorities under the broad objectives, the proposal elaborated.
Integration and maintaining current state of automation, establishing security in information technology and e-filing and archiving process will fall under the automation chapter.
Central bank officials, however, said approval of the government to further consolidate the progress of BB already achieved under the CBSP is more important than financing issue.
‘The WB has meanwhile responded positively to extend their fund towards the cause of BB,’ a BB official said.
The CBSP, starting in 2004, completed in December last year at a cost about $40 million.
Under the project, BB became largely automated with procuring computers for almost all of its staff, updated banking regulations and improved human resources policies.
A good number of local and foreign experts were also appointed in the BB to modernise its policies on human resources, accounting, and auditing and bank supervision.
A considerable pie of the project cost was spent on the head of foreign tours of BB officials, which many found unnecessary and ‘recreation’ abroad for the BB staff.
-With New Age input
