Bangladesh Central Bank Strengthening Project

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The objective of the project is to achieve a strong, and effective regulatory, and supervisory system for Bangladesh's banking sector. This would be accomplished by supporting the overall strengthening of Bangladesh Bank (BB), the central bank, to enable it to play its due role as the country's monetary authority, and bank regulator, and supervisor. The first component is made up o f the following activities:(a) Legal Counsels - would be entail engaging two professional banking lawyers with drafting experience, to assist in performing central banking, and bank regulatory and supervisory roles effectively. A consultant would also update the Financial Institutions Act, 1993, and review the need for a law to encourage mergers between banks as an exit mechanism; and, (b) Anti Money Laundering and Countering of Financing of Terrorism (AML/CFT) - To assist in this regard, an international expert on AML/CFT will be hired under the Project, who will contribute towards the establishment, and functioning of an effective AML/CFT regime in Bangladesh. The second component, reorganization and modernization, is made up of the following sub-components: a) Functional Reorganization will organize and manage experts in changing the organization structure to realign Departments around the functions of monetary policy; bank supervision, and regulation; and, reserve management and prevention of money laundering; (b) a modernization expert will assist the Bangladesh Bank (BB) management to develop, implement, and monitor an agreed change process in a conservative corporate environment. The component will further support automation, and a human resources (HR) development program, that includes an HR advisor, a counseling and tracking cell, and, a training and management development program. The third component, capacity building, aims at strengthening areas concerning the Research Department of BB, the prudential regulations and supervision functions; and, the accounting and auditing functions. An unallocated fourth component, based on further discussions, will seek to continue securing professional management and international experts, and, assist in the privatization of Rupali Bank Ltd.