BB taps Citi for global custody services
Sunday, 16 August 2009
Sheikh Shahariar Zaman
Bangladesh Bank (BB) has tapped Citi Securities and Fund Services, a wing of Global Transaction Services, to get global custodial services.
The central bank will receive an array of services from Citi, including consultancy, safekeeping of assets, settlements monitoring, corporate action processing, income collection, recordkeeping and consolidated reporting, said a central bank official.
Bangladesh Bank can request other central banks to work as custodians of its asset, but it creates problems in transaction, he said.
"If we request the Bank of England to be our custodian then we can only keep pound denominated assets with it," he explained.
American Express Bank used to give the custodial service to the Bangladesh Bank until it closed down its operations, the official said.
The Bangladesh Bank now can buy any asset regardless of denomination and keep it with Citi's custody anywhere in the world, he said.
"Citi will provide consultative service but the decisions to buy and sale of assets will be taken by the Bangladesh Bank," the official said.
The custodial service does not authorise Citi to handle the foreign exchange reserve of the central bank, he said.
Bangladesh Bank has foreign currency reserve of over $8 billion.
"With the foreign reserve, the central bank will buy safe assets including triple A rated bonds and treasury bonds," he said.
Bangladesh Bank will continue to manage its own foreign reserve as the fund management team at the central bank has been doing this for long and have expertise in this field, he added.
"Many banks have approached us to manage the fund on Bangladesh Bank's behalf, but we have declined to give them the authority," the official said.
The Citi will initially cover Bangladesh Bank's offshore investments in major international markets, he added.
"Under the agreement, Bangladesh Bank will be able to expand and diversify investments into different markets, leveraging Citi's experience in providing custodial services across the globe," the official said.
Bangladesh Bank (BB) has tapped Citi Securities and Fund Services, a wing of Global Transaction Services, to get global custodial services.
The central bank will receive an array of services from Citi, including consultancy, safekeeping of assets, settlements monitoring, corporate action processing, income collection, recordkeeping and consolidated reporting, said a central bank official.
Bangladesh Bank can request other central banks to work as custodians of its asset, but it creates problems in transaction, he said.
"If we request the Bank of England to be our custodian then we can only keep pound denominated assets with it," he explained.
American Express Bank used to give the custodial service to the Bangladesh Bank until it closed down its operations, the official said.
The Bangladesh Bank now can buy any asset regardless of denomination and keep it with Citi's custody anywhere in the world, he said.
"Citi will provide consultative service but the decisions to buy and sale of assets will be taken by the Bangladesh Bank," the official said.
The custodial service does not authorise Citi to handle the foreign exchange reserve of the central bank, he said.
Bangladesh Bank has foreign currency reserve of over $8 billion.
"With the foreign reserve, the central bank will buy safe assets including triple A rated bonds and treasury bonds," he said.
Bangladesh Bank will continue to manage its own foreign reserve as the fund management team at the central bank has been doing this for long and have expertise in this field, he added.
"Many banks have approached us to manage the fund on Bangladesh Bank's behalf, but we have declined to give them the authority," the official said.
The Citi will initially cover Bangladesh Bank's offshore investments in major international markets, he added.
"Under the agreement, Bangladesh Bank will be able to expand and diversify investments into different markets, leveraging Citi's experience in providing custodial services across the globe," the official said.