Central bank strengthening project implementation to be expedited
Sunday, 16 September 2007
A Z M Anas
The central bank authorities is now planning to restart shortly the World Bank-funded central bank strengthening project (CBSP), which has remained almost bogged down since its inception.
"We're committed to implementing all the components of CBSP that will help us better monitor the country's financial sector. Unfortunately, the project's implementation progress has remained pitifully low over the last four years," a senior BB official said.
BB officials said the World Bank last week approved the extension of CBSP, originally scheduled to end in 2007, for another two years. The project will now continue upto December 2009, they added.
"The authorities will restructure the project itself so that the previous impediments can be removed. The restructuring, I believe, will enable the central bank to do its job without facing major problems," the BB official added.
The revamp plan reflects the central bank authority's commitment to strengthening its role in monitoring the country's banking system, BB officials say.
Asked why the project remained an under-performer for long, the BB official noted that it was partly because of "resistance to changes." He would not elaborate.
The World Bank-funded central bank strengthening project (CBSP) was undertaken in 2003, but it has limped since then, making the central bank virtually digitally-handicapped.
"Today, the central bank of Sri Lanka has become a shining success story. It can boast of being the most modern central bank in South Asia. The central bank strengthening projects in Pakistan and Nepal are also gaining momentum," a BB official maintained.
"The central bank of Sri Lanka has fully automated its core activities to better monitor the financial sector in the island nation," he added.
The BB undertook the project to enable it to move away from manual to the electronic mode for conducting its internal and external functions.
The International Development Association (IDA), the soft lending arm of the World Bank, had lent out $37 million in loan for the project, the cost of which is estimated at $ 46.13 million. The rest of the project cost was supposed to be financed by Bangladesh Bank. But, so far, the global lender has disbursed as low as $ 2.62 million.
BB officials acknowledged that most of the recording, data analysis, reports and Management Information System (MIS) were still being accomplished manually, making the financial sector watchdog's capacity to monitor foreign exchange reserves extremely limited.
If revamped, the CBSP will help the BB streamline the delivery of its services, strengthen the operational and administrative activities, and provide timely, comprehensive, and relevant information to its top management, officials concerned insisted.
Already, the BB along with the help of international consultants has mapped out an Information Systems Strategic Plan (ISSP) that could introduce modern banking practices, thereby bolstering the country's financial sector.
"This would be accomplished by supporting the overall strengthening of Bangladesh Bank BB to enable it to play its due role as the country's monetary authority and bank regulator and supervisor," the BB official noted, quoting the project document.
The state of other components of the project was no good either, central bank sources said.
The sources said that an expert appointed to advise the central bank to bring radical changes in the current "conservative" corporate structure of the BB was sitting idle because of the authorities' apathy to take up apparently painful programme.
Similarly, the experts recruited to advise the BB authorities to prepare an action plan to stem money laundering as well as terrorist financing and make it operational were not allowed to discharge their duties properly.
Referring to the moves to implement performance-based promotion and international human resources policies in the BB, the officials said those made little headway, thanks to the opposition from a vested group.
The central bank authorities is now planning to restart shortly the World Bank-funded central bank strengthening project (CBSP), which has remained almost bogged down since its inception.
"We're committed to implementing all the components of CBSP that will help us better monitor the country's financial sector. Unfortunately, the project's implementation progress has remained pitifully low over the last four years," a senior BB official said.
BB officials said the World Bank last week approved the extension of CBSP, originally scheduled to end in 2007, for another two years. The project will now continue upto December 2009, they added.
"The authorities will restructure the project itself so that the previous impediments can be removed. The restructuring, I believe, will enable the central bank to do its job without facing major problems," the BB official added.
The revamp plan reflects the central bank authority's commitment to strengthening its role in monitoring the country's banking system, BB officials say.
Asked why the project remained an under-performer for long, the BB official noted that it was partly because of "resistance to changes." He would not elaborate.
The World Bank-funded central bank strengthening project (CBSP) was undertaken in 2003, but it has limped since then, making the central bank virtually digitally-handicapped.
"Today, the central bank of Sri Lanka has become a shining success story. It can boast of being the most modern central bank in South Asia. The central bank strengthening projects in Pakistan and Nepal are also gaining momentum," a BB official maintained.
"The central bank of Sri Lanka has fully automated its core activities to better monitor the financial sector in the island nation," he added.
The BB undertook the project to enable it to move away from manual to the electronic mode for conducting its internal and external functions.
The International Development Association (IDA), the soft lending arm of the World Bank, had lent out $37 million in loan for the project, the cost of which is estimated at $ 46.13 million. The rest of the project cost was supposed to be financed by Bangladesh Bank. But, so far, the global lender has disbursed as low as $ 2.62 million.
BB officials acknowledged that most of the recording, data analysis, reports and Management Information System (MIS) were still being accomplished manually, making the financial sector watchdog's capacity to monitor foreign exchange reserves extremely limited.
If revamped, the CBSP will help the BB streamline the delivery of its services, strengthen the operational and administrative activities, and provide timely, comprehensive, and relevant information to its top management, officials concerned insisted.
Already, the BB along with the help of international consultants has mapped out an Information Systems Strategic Plan (ISSP) that could introduce modern banking practices, thereby bolstering the country's financial sector.
"This would be accomplished by supporting the overall strengthening of Bangladesh Bank BB to enable it to play its due role as the country's monetary authority and bank regulator and supervisor," the BB official noted, quoting the project document.
The state of other components of the project was no good either, central bank sources said.
The sources said that an expert appointed to advise the central bank to bring radical changes in the current "conservative" corporate structure of the BB was sitting idle because of the authorities' apathy to take up apparently painful programme.
Similarly, the experts recruited to advise the BB authorities to prepare an action plan to stem money laundering as well as terrorist financing and make it operational were not allowed to discharge their duties properly.
Referring to the moves to implement performance-based promotion and international human resources policies in the BB, the officials said those made little headway, thanks to the opposition from a vested group.