Chapter-11

Administration

Appointment of New Governor New Appointment in Different Posts

11.1 Dr. Salehuddin Ahmed took charge as
the Governor and chairman of the Board from
2 May 2005 after the completion of the tenure
by Dr. Fakhruddin Ahmed.
Appointment of New Directors in the Board
11.2 Mr. Akhtar Husain Khan was appointed
as Director of the Board in place of Mr. Md.
Ismail Jabiullah with effect from June 29, 2005.
11.5 During FY05, 78 Assistant Directors
(General Side), 2 Assistant Directors (Law), 12
Assistant Programmers, 22 Data Entry/Control
Operators, 5 Drivers, 2 Electricians, 2 Generator
Operators, 1 Fitter Mechanic, 5 Pump Drivers, 2
Plumbers, 152 MLSS have been appointed.
Besides, one General Manager for Internal
Audit Department and one for Accounts &
Budgeting Department have been appointed on
contract basis.

Board of Directors/Executive Committee Assistant Director (General Side) 78

Meetings Assistant Director (Law) 2
Assistant Programmer 12
11.3 A total of twelve meetings of the Board Data Entry/Control Operator 22
of Directors and six meetings of the Executive Driver 5
Committee were held during FY05. Electrician 2
Operator (Generator) 2
Audit Committee of the Board Fitter Mechanic 1
Pump Driver 5
11.4 In line with the international practice for Plumber 2
strengthening corporate governance, an Audit MLSS 152
Committee comprising of four non-executive
directors was formed on august 12, 2002 to Total : 283
assist the Board of Directors in fulfilling its
oversight responsibilities for the financial Retirements, Resignations, Deaths, Dismissals,
reporting process, the system of internal Termination
control over financial reporting and audit
process. The present position of the 11.6 The numbers of officials/staff of the Bank
Committee is as follows : retired/resigned/died/dismissed during FY05
were as under :
a) Mr. Khairuzzaman Chowdhury Convener Retirement 100
b) Prof. Dr. M. Alauddin Member Resignation 02
c) Dr. Momtaz Uddin Ahmed Member Death 14
d) Mr. Akhtar Husain Khan Member Dismissal 04
Compulsory Retirement 03
During the year 2004-2005, 02 (two) meetings Removal/Termination 06
of the Audit Commitee were held. Total : 129

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Creation/Abolition of Posts
11.7 In FY05, 7 posts of officials at different
levels have been created, 46 posts have been
upgraded and 46 posts of officials & 1 post of
staff have been abolished. As a result, at the
end of FY05, the total number of posts
(sanctioned strength) of employees have been
increased from 7068 to 7074.
Working Strength of Officials and Staff
11.8 During FY05, the number of officials of
the Bank decreased from 4237 to 4222. The
number of staff stood at 1374. At the end of
FY05, the number of vacant posts were 1478.
Number of Officers on Deputation/Lien
11.9 During FY05, 52 officers of the Bank
were on deputation/lien in different institutions
at home and abroad.
Reorganizing Various Departments of the
Bank
11.10 During FY05, "Internal Audit and
Inspection Department" has been reorganized
and renamed as "Internal Audit Department".
Welfare Activities and Approval of
Scholarship
11.11 During FY05, an amount of 2.15 million
Taka was provided to the children of the
officials of the staff as scholarship and 0.026
million Taka was given as medical assistance
from the Karmachary/Karmakarta Kallyan Tahbil,
established under the auspices of the Governor.
Besides, an amount of 15.11 million Taka was
allotted to Bangladesh Bank Schools, Mosques,
Clubs, Freedom Fighters’ Welfare Units etc.
to carry out their recreation and welfare
activities.
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Chapter-11
Foreign Training and Study
11.12 During FY05, 268 officials of the Bank
participated in different training courses/
seminars/ workshops abroad.
Domestic Training and Study
11.13 A total of 283 officials/staffs of the Bank
participated in the training courses organized by
different institutions of the country during FY05.
Reward to the Employees
11.14 During FY05, 27 officials of Accounts &
Budgeting Department were given 7,500 Taka
each as reward for successful completion of BB
Financial Statement according to the IFRS.
Orientation Programme on Change Management
11.15 As Bangladesh Bank is going through a
change process, emphasis has been given on
internal communication. During FY05, 41
orientation sessions (30 sessions at Dhaka
centre and 11 sessions at Chittagong &
Rajshahi Office) were arranged in which a total
number of 870 officials (Officer/AD/DD)
participated. Other than these, 18 communicative
sessions on Performance Management
System (PMS), which is going to be
introduced from April 2006, has been
arranged at Head Office and all other offices
of Bangladesh Bank in which 599 officials
participated.
Training Courses, Workshops and Seminars
Organized by the Bangladesh Bank Training
Academy (BBTA)
11.16 With a view to improving theoretical and
practical knowledge as well as increasing the
professional skill and efficiency of the officials of
the Bangladesh Bank, scheduled banks and
Chapter-11 Administration

related organizations, the Bangladesh Bank

Training Academy (BBTA) conducted 131 Sl.
training courses/workshops/ seminars in Dhaka Subjects Number No. of
no participants
and other district head quarters during FY05. A 1 2 3 4
total of 4,003 participants from the Bangladesh xxix) Supervision and regulation of non-bank FIs 1 17
Bank, scheduled banks and other organizations xxx) Treasury operation and foreign exchange
/institutions participated. Courses conducted by risk management 1 32
BBTA during FY05 are shown in Table 11.1. xxxi) Human resources management system 1 20
xxxii) IT security of Bangladesh Bank 1 28
xxxiii) Reserve management operation 1 12
Table 11.1 Statement on different training courses, xxxiv) Effective communication techniques 1 27
workshops and seminars organized by the Bangladesh xxxv) Anti-money laundering 1 21
Bank Training Academy during FY05 xxxvi) Internal control and compliance 1 12
xxxvii) Asset - liability management 1 14
Sl. xxxviii) Balance sheet analysis 1 14
Subjects Number No. of
no participants xxxix) Credit risk management 1 12
1 2 3 4 b) For the officials of commercial banks 23 858
I. Foundation 3 156 i) Money and banking data reporting 5 193
i) Foundation Course (AD)-2003 1 66 ii) Foreign exchange transaction reporting 6 239
ii) Foundation Course (Assistant Programmer) 1 12 iii) Money laundering prevention 5 173
iii) Foundation Course (still continuing) 1 78 iv) Currency management, circulation of notes
and coins : detection, disposal of forged
2. Other Training Courses 52 1257
and mutilated notes 6 214
a) For Bangladesh Bank officials
v) Credit management 1 39
i) Human resources management 1 28
ii) Bank supervision methodology 4 108 3. Workshops/seminars 33 1427
iii) Computer appreciation 6 170 i) CIB reporting 26 1166
iv) IT audit checklist for scheduled banks 1 12 ii) Repo and reverse repo of Treasury bill 1 30
v) Interaction between monetary and fiscal iii) Interest rates spread on real sector
policy : current issue & evidence 1 13 development : a case study for Bangladesh 1 40
vi) E-commerce, E-banking and IT audit 1 26 iv) Financing by the leasing companies :
vii) Principles of accounting and bank effects on bank credit 1 22
accounts under IAS-30 1 19 v) Money laundering prevention 1 65
viii) Safety/security crisis management 1 18 vi) Basel II Islamic banking regulation 1 31
ix) Foreign exchange and foreign trade 1 24 vii) Ethics in banking (knowledge sharing,
x) Computer course on database management 2 48 lecture session/discussion) 1 37
xi) Practice and law of banking 1 19 viii) Seminar on securities : zero coupon bond 1 36
xii) Islamic banking 1 12 4. Special training courses requested/assist by SEDF 20 305
xiii) Communicative English 1 25 i) Foreign exchange risk management 4 64
xiv) English writing skill development 2 53 ii) Asset-liability management 4 57
xv) Sustainable exchange rate policy iii) Credit risk management 4 64
and management 1 37 iv) Anti-money laundering 4 59
xvi) Microsoft office 3 74 v) Internal control and compliance 4 61
xvii) Bank supervision and report writing 1 27
xviii) Inflation targeting 1 43 Grand total : 131 4003
xix) Banking in Bangladesh : act/law/regulations 2 50
xx) Accounting principles and technique 1 24
xxi) Monetary policy : theory and practice 1 16 Central Bank Strengthening Project
xxii) Money market and capital market :
problems and prospects 1 25
11.17 The project and its objective:
xxiii) Islamic banking : principles and operations 1 24
xxiv) Liquidity forecasting 1 18 Bangladesh Bank has been implementing the
xxv) Training programme for legally qualified personnel 1 28 Central Bank Strengthening Project (CBSP)
xxvi) Central banking and its rule : with the financial assistance of the International
present and future challenges 1 36 Development Association (IDA). The objective
xxvii) Inter branch transaction and reconciliation 1 42
of the project is to develop Bangladesh Bank
xxviii) Business communication and modern
office management 1 29 into an effective and modern central bank
through strengthening its capability to play due

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role as the country's monetary authority as well senior representatives from the Finance
as regulatory and supervisory authority of the Division, IMED, ERD and Planning Commission,
banking sector. is responsible for major project decisions and
act as the Project Oversight Committee for
Estimated cost & duration : The project overall co-ordination.
commenced from July 2003 and is expected to
be complete by June 2007. It is a project with a
total cost of USD 46.13 million of which IDA will Project Director
provide USD 37.0 million and the rest will be
borne by the Bangladesh Bank. The implementation of the project is entrusted to
Deputy Governor-2 who is working as the
Main components : The Central Bank Project Director (PD). The PD is supported by
Strengthening Project (CBSP) has three major the Modernization Expert, the Central Bank
components segregated into a number of sub- Strengthening Project (CBSP) Cell, CBSP
components with the budgetary allocation for Section in Accounts & Budgeting Department and
each component and subcomponent as under: IT Programme Unit for co-ordination of the
various project activities. Moreover, all consultants
Financial Cost Estimate of the Project
hired under this project are also liable to report to
him.
Components Costs % of total
(US $ million) Bangladesh Bank Teams : Bangladesh Bank
I. Reorganizing and Modernizing has formed six teams, one each for: Human
a. Functional Reorganization 1.2 2.6 Resources Development and Functional
b. Automation 31.89 69.1
Reorganization; Information System and Automation;
c. Human Resources
Prudential Regulation and Bank Supervision;
Development 3.7 8.0
Accounting and Auditing, Strengthening Research
II. Capacity Building and Legal components of the project. Each team
a. Strengthening the Research
headed by an Executive Director comprises of
Department 2.15 4.7
General Managers and Deputy General Managers.
b. Strengthening Prudential
Regulations and Supervision 2.4 5.2
These teams are assisted by international and
c. Strengthening Accounting national experts, and are responsible for the day-
and Auditing Standards 0.9 2.0 to-day implementation of the project in their
respective areas. Bangladesh Bank Teams also
III. Strengthening the Legal
Framework 0.6 1.3
evaluate the performances of related consultants
IV. Unallocated 3.29 7.1 and apprise the PD accordingly through the
CBSP Cell. All Bangladesh Bank Teams report
Total Project Cost : 46.13 100.0
to the PD through their respective Deputy
Governors.

Management of the Project Consultants : A number of consultants’ services

The management of the project is vested upon
the following inter-related bodies with a high-
powered Steering Committee at the apex.
Steering Committee
The Steering Committee, which is comprised of
the Governor, three Deputy Governors, and
as provided in the project document are
being utilized for an effective and efficient
implementation of the project. These consultants
are to work in collaboration with the respective
Bangladesh Bank Team and assist the concerned
Bangladesh Bank Teams for carrying out day-to-
day implementation of the project in their areas of
concern. All consultants hired under this project
report to the PD through respective Bangladesh
Bank Team and the CBSP Cell.

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Chapter-11
IT Programme Unit : The IT Programme Unit
comprising of officials from the IT departments
is responsible for activities relating to IT
procurement and overall automation in an
orderly manner. IT Programme Unit reports to
the PD through the CBSP Cell.
CBSP Cell : The CBSP Cell is responsible for
overall management of the project under the
guidance of the Project Director. In addition
to monitoring the performances of the
Modernization Expert, CBSP Cell is also looking
after the appointment of consultants, facilitation
and coordination of the activities of all the
consultants.
CBSP Section : The CBSP Section under
Accounts & Budgeting Department (A&BD) is
responsible for the financial management of the
project. For utilization of IDA’s share of project
expenditures, a special deposit account in US
Dollar is being operated by A&BD. A&BD is also
responsible for consolidating financial transactions
and maintaining supporting papers.
Implementation Status : Based on the major
areas, the project has been split into seven
components. The main components of the
project and developments made so far against
them are in brief as follows:
A. Reorganization and Modernization
Functional reorganization : In order to
strengthen the institutional capability of
Bangladesh Bank, and to ensure a smooth
transition towards the new culture and
environment, the functional reorganization was
envisioned. Bangladesh Bank has already re-
organized different departments for greater
integrity and coordination of the activities.
The PriceWaterHouseCoopers Development
Associates, UK Limited has been appointed as
the Modernization Expert (firm) and they have
already started working to further re-align the
organizational structure, operational systems
and business processes through a long-term
organizational transformation to bring about
change in organization culture. The process
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Administration
flows of 21 departments out of 27 departments
(including cash department) already completed
by CBSP Cell. Approximately 600 flow diagrams
have been drawn. These process flows will be
used for Business Process Reengineering in the
near future.
Automation : To modernize and improve
operational efficiency, and to move from a
manual mode to an electronic mode, an
integrated information system (including computers,
accessories, software and IT solutions etc.) will
be procured. This procurement is now under
process. According to the suggestion provided
by the Ministry of Finance (MoF), the Board of
Directors of Bangladesh Bank decided to re-
invite Bids for procurement of Information
Systems.
Human Resources Development : In order to
implement this component, BB has hired one
International HR consultant and one national
HR consultant. Bangladesh Bank has started
implementation of modern Performance Management
System (PMS) as recommended by the
International HR Advisor. The International HR
Advisor is now working on relevant HR policies,
i.e. Recruitment Policy, development of Competency
Model, Management Development Programme,
Training Need Assessment (TNA) for the
officials of BB and so on in order to suit the
envisioned changed environment. National HR
consultant worked on improving the internal
communication and a publication. In this
connection an internal communication team is
formed. They are publishing a quarterly newsletter
focusing on change management named
"Probaho".
B. Capacity Building
Strengthening Research Department :
Bangladesh Bank has signed a MOU with the
World Bank Institute (WBI) to formalize the
Partnership for Excellence in Research and
Policy Analysis. In order to enhance the
analytical capacity of the Research Department,
Bangladesh Bank is going to establish a Policy
Analysis Unit headed by a Research Advisor.
Administration
Formation of the Policy Analysis Unit is at the
final stage. Research Advisor has already been
selected by the World Bank Institute. Selection
of some candidates for the positions of Senior
Research Economists and Research Economists
have already been done.
Strengthening Prudential Regulations and
Supervision : The changed role of Bangladesh
Bank requires its increased participation in
prudential regulation and supervision of the
financial system. One international Bank Supervision
Expert has been working in this field. The
consultant is currently working on improving
Off-site Supervision System. Besides, several
Competency Groups have been formed in order
to be acquainted with the risk based supervision
as per Basel Accord.
Strengthening Accounting and Auditing
Standards : Bangladesh Bank hired an
Accounts and Audit Specialist to streamline the
financial management system. He provided
guidance and support in designing a strategy for
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Chapter-11
strengthening the accounting and auditing
functions of the Bangladesh Bank.
C. Strengthening the Legal Framework :
In order to strengthen the legal framework of
Bangladesh Bank as well as capacity building
for in-house counsels, BB hired A. Hossain and
Associates, a Bangladeshi law firm with
international collaboration of Gide Loyrette
Nouel (GLN), France. The firm commenced
their service in Bangladesh Bank. They are now
reviewing the related existing Laws and started
compiling and rationalizing the circulars,
directions, and legal instruments issued by
Bangladesh Bank. Moreover, two qualified
lawyers have been appointed as Assistant
Director who are serving as the regular staff of
Bangladesh Bank. They are being trained by the
Legal Counsels. Meanwhile, they have
organized two training sessions where all the
officials of BB who have legal academic
background have been trained on laws relating
to banking and finance.