Innovations, finance and banking in Bangladesh
Tuesday, 23 November 2010
Atiur Rahman
As in the developed and fast growing emerging economies, it is important for Bangladesh to stimulate, support and carefully nurture the spirit of creativity and innovation. We, in the central bank of Bangladesh, have been promoting innovative financial products and processes for enhancing financial inclusion. Of course, Bangladesh is a social laboratory where innovations abound. Hopefully, the challenge is how to take appropriate lessons from these innovative developments and take the nation forward with appropriate policies and actions.
Major innovations in Bangladesh: Major post-liberation social and financial innovations in Bangladesh have gone great lengths in maintaining growth and smoothening the path of further progress. A few of those are noted below:
Governance innovation: The caretaker government, despite many limitations, is a Bangladeshi innovation in safeguarding democratic governance, with parliamentary elections conducted by interim non-party transitional governments. One day this will not be necessary if we can continue to remain on-course of democratic governance. At this moment, although opposition parliament members are not attending the parliament sessions, they are participating actively in democratic discourses in parliamentary standing committees on various ministries. Through participation in meetings of these committees, the members of parliament (MPs) from the opposition are also engaged in law-making and oversight of governance. If we can continue this mutual engagement, certainly Bangladesh will move into the higher trajectory of democracy which is bound to give us all better dividends in sustainable and inclusive economic growth.
Back-to-back import letters of credit (LCs) overcoming foreign exchange scarcity constraint in apparels exports: The imported input-based apparel exports began in Bangladesh in early 1980s when foreign exchange for import was scarce; the innovation of usance back-to-back import LCs got around this problem, spawning a globally competitive export industry. The arrangement pays for input imports out of export earnings received. This innovation alone has helped Bangladesh in emerging as one of the top performers in apparels exports in the world.
Microcredit: Microcredit for self-employment of the poor pioneered by Bangladesh is an innovation now being replicated worldwide as a tool for combating poverty. Moreover, Bangladesh is the only country in the world which has a full-blown regulatory authority for microfinance.
Women empowerment: Self employment and wage employment based on microcredit and apparels export for millions of women in Bangladesh have meant huge strides in women entrepreneurship.
Synergies from clustering and networking spawned a vibrant light engineering sector: Clusters of small light engineering enterprises in Dhaka, Bogra and elsewhere in Bangladesh are fabricating spares (in many cases entire plants) of agricultural, irrigation, construction and other industrial machinery and equipment at fractions of import costs. These enterprises have also innovated low cost light transportation vehicles for rural roads and waterways, powered by engines for irrigation pumps/power tillers.
Major breakthroughs and attainments: Belying the widely held perception as an international 'basket case' at her birth in 1971, Bangladesh has achieved remarkable development turnaround with relatively low investment level compared with the East Asian economies -- and is by now not far off from the per capita national income threshold for the (lower) middle income group of economies. Over the 39 years since liberation, her per capita income has grown fourfold with near self-sufficiency in food production, poverty has been reduced by more than half, and she is well on course for achieving most of the Millennium Development Goals (MDGs).
Bangladesh was awarded recently by the UN for achieving the MDG on child mortality. Many felt she could as well receive an award for women empowerment which is even higher than in many European countries. Some of the other breakthroughs and attainments (like pioneering of micro-credit as a tool combating poverty, building up a globally competitive apparels export sector from scratch) are also well recognized.
Although Bangladesh still faces daunting challenges of pervasive poverty, climate change threat, governance weaknesses and deficiencies in physical infrastructure and human development, the progress thus far achieved in a functioning (if at times faltering) democratic framework is a story well worth highlighting as an inspiration for herself and others in innovatively, creatively curving faster progress paths ahead.
Economic growth of Bangladesh has been resilient, capable of withstanding shocks (both natural and man-made). The private sector is the lead driver of growth with congenial policy support from the government. The economy has significant cost competitiveness in terms of low-cost labour compared to its major competitors like China and India. The economy's growing exports and workers' remittance inflows are bolstering external sector viability. Fiscal deficits remain modest, easily financed by concessional foreign borrowings and a deepening domestic government bond market. The banking and financial sectors are highly resilient, with strong supervision and regulation.
Microcredit operations in Bangladesh: Financial inclusion of the poorest, particularly their access to small-sized credit, is a major tool in Bangladesh for combating poverty. The micro-finance institutions (MFIs) brought about a major breakthrough in reaching out to the rural poor with lending models specifically including agenda imparting necessary minimal literacy and numeracy to aspiring member borrowers and gender preference for female borrowers, in the expectation of improvement in their financial standing in the traditionally male-dominated families.
The Government of Bangladesh has constituted a Micro-credit Regulatory Authority (MRA) chaired by Governor, Bangladesh Bank, to license, supervise and ensure sound functioning of the MFIs. The MRA being chaired by Governor has given a huge boost to the credibility of the MFIs licensed and supervised by the MRA. Many MFIs in Bangladesh have collaborated with insurance companies to offer modest-sized covers at affordably low rates of premium such as credit life insurance ('debt dies with debtor'), accident insurance (for sicknesses and injuries requiring hospitalization etc.), property insurance (usually for livestock bought with MFI loans) and so on.
Typically, the MFIs act as partner agents of the insurance companies, collecting premiums on their behalf. A February 2007 survey posted in CGAP's microfinance gateway reported that ten insurance companies, in partnership with sixty-one MFIs, are offering different microinsurance products in eighty-one schemes and cumulative premium collections are over Taka 11.2 billion from about 4.5 million clients. The MRA is now working closely with the MFIs and PKSF in developing a regulatory framework so that the borrowers are protected from astronomical interest rates which are experienced in some cases. A well articulated regulatory guideline has already been issued for consumer protection including a cap on the interest rate.
Innovations in financial inclusion to accelerate inclusive economic growth: Financial inclusion as a tool for combating poverty and ensuring broad-based inclusive economic growth is receiving high policy priority in Bangladesh. With formal financial institutions unenthusiastic in providing financial services to the poor due to high costs and risks, MFIs in Bangladesh went far in promoting financial inclusion. Around four-fifths of the adult population now receives basic financial services from regulated and supervised financial institutions, MFIs and cooperatives. To cover the remaining one-fifth, Bangladesh Bank is encouraging cost-saving innovative partnerships of financial institutions, MFIs and mobile phone/smart card based technology platforms.
Besides Bangladesh Bank, the post office department, and public utilities including the railway department have taken steps to introduce electronic money order, mobile phone-based utility bill/ rail ticket price payment. The Prime Minister's office with its Digital Bangladesh programme has taken some co-ordination initiative, which can be strengthened further. Bangladesh Bank is taking strong initiatives to reach under-served and unbanked people with banking facilities. Credit facilities have been extended to farmers and small entrepreneurs, who have been a 'missing middle' for long vintage. Bangladesh Bank's financial inclusion initiatives continue strong support for adequate lending for agriculture, SMEs, renewable energy and other productive sectors.
An ambitious and proactive agricultural credit policy has been declared by Bangladesh Bank which accords special priority to marginal farmers. A record disbursement target of Taka 126.17 billion for fiscal year 2010-11 (FY 11) has been declared, 9.6 per cent higher than in FY 10. Disbursement performance in FY 10 was impressive, around 97 per cent of the target. Innovative initiatives have been taken in introducing refinance line for landless sharecroppers in partnership with a reputed MFI. Bangladesh Bank has prevailed upon banks on their adopting more open processes in agricultural credit sanction and disbursement, with strong multilateral (Bangladesh Bank, Head Office and branch office of concerned banks) monitoring of credit disbursement and recovery.
Mobile phone numbers of borrowers are preserved in Bangladesh Bank and the lending banks for direct contact. Bank accounts for farmers have been opened at free of charge with nominal initial deposits of only Taka 10; around 9.0 million accounts have already been opened. These accounts are being used to disburse government input subsidies to the farmers. These accounts will also facilitate small savings, revolving loans, remittances etc.
A new 'SME and Special Programmes Department' has been established in Bangladesh Bank for coordinating and strengthening SME financing initiatives in the financial sector. The new department has issued elaborate SME lending guidelines titled "SME Credit Policy and Programmes". The guidelines prescribe an 'area approach' in identifying and utilizing specific comparative advantages of different regions for diverse range of SME activities. Bangladesh Bank has provided a refinance line of Taka 6.00 billion for small and medium enterprises, 15 per cent of which is reserved for woman entrepreneurs. Besides, SME credit up to Taka 2.5 million can be disbursed against personal guarantee to women entrepreneurs.
Bangladesh Bank has introduced Taka 2.0 billion refinance line in FY 10 against bank loans for environment-friendly investments in solar energy, biogas plants and effluent treatment plants. Bangladesh Bank itself switched over to solar-powered lighting by setting up a 20-kilowatt solar panel, as a move towards encouraging green energy in Bangladesh. A commercial bank has partnered with an NGO in working out a scheme of producing solar energy in 4000 remote households in haor areas in Sylhet. Elaborate guidelines on Green Banking covering energy-efficient office management, restrictions on lending to polluting industries, improved waste management and encouraging use of solar energy by financial institutions will be issued shortly.
Automation of banking sector: Bangladesh Bank is on the lookout for creative partnerships in regulated IT-based remote delivery of financial services. A number of Bangladesh Bank-approved initiatives are already in operation (to begin with, mainly in utility bill payments and in delivery of remittances from Bangladeshi workers abroad to their families at home), others are at various stages of implementation, with some of these, including smartcards and POS terminals, in delivery networks besides mobile phones.
Installation of 'Bangladesh Automated Clearing House (BACH)' is a remarkable event in the history of financial sector in Bangladesh which will ease the remittance channel and payment system, and therefore, will bring dynamism in business activities. Central bank reform programme initiated ICT packages includes Networking, Banking application, Enterprise Resources Planning (ERP) Solution, Enterprise Data Warehouse etc., with a view to ensuring efficient management of assets including human resources. ERP solution covers digitization of procurement (e-tendering), cash management, recruitment process (on-line application) etc. Electronic fund transfer network will soon go live.
Mobile phone-based remittance services in Bangladesh: Prompt delivery of workers' remittances, at affordable costs, to recipients in rural areas away from bank branches has for long remained a challenge for banks. Fast expanding mobile telephony in Bangladesh has opened up windows of opportunity for creative partnerships of banks and mobile telephone companies in devising cost-effective arrangements for delivery of remittances. A number of MFIs have joined hands with banks and mobile telephone companies.
Bangladesh Bank has been encouraging such bank-led partnerships which will bring win-win cases for all concerned. bKash, a subsidiary of BRAC Bank, in partnership with telephone operators in Bangladesh is working to provide financial services via mobile phones to the unbanked poor, particularly in rural areas. The bKash mobile wallet will be the customer account into which money can be deposited and out of which money can be withdrawn or used for various services. Trust Bank has taken initiatives to establish Pay-points in rural areas which will be used for domestic and international money transfer, disbursement of SME and agricultural credit, transferring government subsidies, pension funds and so forth. The bank using MFI linkages is extending credit to the crop sector. A few other bank-led financial inclusion initiatives (including the one by Dutch-Bangla Bank) are also in preparatory stage. Once implemented, all these will bring extensive progress in the arena of financial inclusion.
Monetary policy supportive of inclusive growth: Monetary and credit policies of Bangladesh Bank aim at maintaining price stability while also supporting growth pursuits with adequate monetary accommodation for all productive economic activities. Drafting of monetary policy is preceded by broad-based stakeholder consultations; post-announcement discussion sessions outside the central bank also provide Bangladesh bank with feedback. The monetary policy stance for FY 11 is designed to render meaningful support to government's policies and programmes aimed at placing the economy in firmer traction on path of faster inclusive growth and poverty reduction while also maintaining monetary and price stability. The monetary and credit policies will continue tight monitoring and discouragement of expansion of unproductive and speculative use of credit. Without compromising mainstream regulation and supervision, Bangladesh Bank's developmental stance played well in coping with recent financial crisis.
Since liberation, Bangladesh has made remarkable development turnaround proving the earlier prediction of 'basket case' utterly wrong. Indeed, Bangladesh has now become a success story of development recognized by the Wall Street Journal as well as by many rating agencies. Over the last three decades, per capita income has increased nearly four-fold and with its current trend of growth, middle income country status for Bangladesh is expected to be achieved by next three to four years.
Bangladesh Bank will continue designing of monetary and credit policies targeted at supporting attainment of the country's desirable growth targets through ensuring adequate credit flows to the productive sectors. It will also continue to encourage various financial innovative experimentations without forgetting its core role of maintaining financial stability and containing inflation. Mind it Grameen Bank was born in the womb of Bangladesh Bank. Bangladesh Bank's developmental stance will continue transmitting 'confidence' in the on-going uncertain time of financial crisis.
Dr. Atiur Rahman is Governor, Bangladesh Bank. This is a talk he delivered at the Legatum Centre for Development and Entrepreneurship, Massachusetts Institute of Technology (MIT) on October 12, 2010.
As in the developed and fast growing emerging economies, it is important for Bangladesh to stimulate, support and carefully nurture the spirit of creativity and innovation. We, in the central bank of Bangladesh, have been promoting innovative financial products and processes for enhancing financial inclusion. Of course, Bangladesh is a social laboratory where innovations abound. Hopefully, the challenge is how to take appropriate lessons from these innovative developments and take the nation forward with appropriate policies and actions.
Major innovations in Bangladesh: Major post-liberation social and financial innovations in Bangladesh have gone great lengths in maintaining growth and smoothening the path of further progress. A few of those are noted below:
Governance innovation: The caretaker government, despite many limitations, is a Bangladeshi innovation in safeguarding democratic governance, with parliamentary elections conducted by interim non-party transitional governments. One day this will not be necessary if we can continue to remain on-course of democratic governance. At this moment, although opposition parliament members are not attending the parliament sessions, they are participating actively in democratic discourses in parliamentary standing committees on various ministries. Through participation in meetings of these committees, the members of parliament (MPs) from the opposition are also engaged in law-making and oversight of governance. If we can continue this mutual engagement, certainly Bangladesh will move into the higher trajectory of democracy which is bound to give us all better dividends in sustainable and inclusive economic growth.
Back-to-back import letters of credit (LCs) overcoming foreign exchange scarcity constraint in apparels exports: The imported input-based apparel exports began in Bangladesh in early 1980s when foreign exchange for import was scarce; the innovation of usance back-to-back import LCs got around this problem, spawning a globally competitive export industry. The arrangement pays for input imports out of export earnings received. This innovation alone has helped Bangladesh in emerging as one of the top performers in apparels exports in the world.
Microcredit: Microcredit for self-employment of the poor pioneered by Bangladesh is an innovation now being replicated worldwide as a tool for combating poverty. Moreover, Bangladesh is the only country in the world which has a full-blown regulatory authority for microfinance.
Women empowerment: Self employment and wage employment based on microcredit and apparels export for millions of women in Bangladesh have meant huge strides in women entrepreneurship.
Synergies from clustering and networking spawned a vibrant light engineering sector: Clusters of small light engineering enterprises in Dhaka, Bogra and elsewhere in Bangladesh are fabricating spares (in many cases entire plants) of agricultural, irrigation, construction and other industrial machinery and equipment at fractions of import costs. These enterprises have also innovated low cost light transportation vehicles for rural roads and waterways, powered by engines for irrigation pumps/power tillers.
Major breakthroughs and attainments: Belying the widely held perception as an international 'basket case' at her birth in 1971, Bangladesh has achieved remarkable development turnaround with relatively low investment level compared with the East Asian economies -- and is by now not far off from the per capita national income threshold for the (lower) middle income group of economies. Over the 39 years since liberation, her per capita income has grown fourfold with near self-sufficiency in food production, poverty has been reduced by more than half, and she is well on course for achieving most of the Millennium Development Goals (MDGs).
Bangladesh was awarded recently by the UN for achieving the MDG on child mortality. Many felt she could as well receive an award for women empowerment which is even higher than in many European countries. Some of the other breakthroughs and attainments (like pioneering of micro-credit as a tool combating poverty, building up a globally competitive apparels export sector from scratch) are also well recognized.
Although Bangladesh still faces daunting challenges of pervasive poverty, climate change threat, governance weaknesses and deficiencies in physical infrastructure and human development, the progress thus far achieved in a functioning (if at times faltering) democratic framework is a story well worth highlighting as an inspiration for herself and others in innovatively, creatively curving faster progress paths ahead.
Economic growth of Bangladesh has been resilient, capable of withstanding shocks (both natural and man-made). The private sector is the lead driver of growth with congenial policy support from the government. The economy has significant cost competitiveness in terms of low-cost labour compared to its major competitors like China and India. The economy's growing exports and workers' remittance inflows are bolstering external sector viability. Fiscal deficits remain modest, easily financed by concessional foreign borrowings and a deepening domestic government bond market. The banking and financial sectors are highly resilient, with strong supervision and regulation.
Microcredit operations in Bangladesh: Financial inclusion of the poorest, particularly their access to small-sized credit, is a major tool in Bangladesh for combating poverty. The micro-finance institutions (MFIs) brought about a major breakthrough in reaching out to the rural poor with lending models specifically including agenda imparting necessary minimal literacy and numeracy to aspiring member borrowers and gender preference for female borrowers, in the expectation of improvement in their financial standing in the traditionally male-dominated families.
The Government of Bangladesh has constituted a Micro-credit Regulatory Authority (MRA) chaired by Governor, Bangladesh Bank, to license, supervise and ensure sound functioning of the MFIs. The MRA being chaired by Governor has given a huge boost to the credibility of the MFIs licensed and supervised by the MRA. Many MFIs in Bangladesh have collaborated with insurance companies to offer modest-sized covers at affordably low rates of premium such as credit life insurance ('debt dies with debtor'), accident insurance (for sicknesses and injuries requiring hospitalization etc.), property insurance (usually for livestock bought with MFI loans) and so on.
Typically, the MFIs act as partner agents of the insurance companies, collecting premiums on their behalf. A February 2007 survey posted in CGAP's microfinance gateway reported that ten insurance companies, in partnership with sixty-one MFIs, are offering different microinsurance products in eighty-one schemes and cumulative premium collections are over Taka 11.2 billion from about 4.5 million clients. The MRA is now working closely with the MFIs and PKSF in developing a regulatory framework so that the borrowers are protected from astronomical interest rates which are experienced in some cases. A well articulated regulatory guideline has already been issued for consumer protection including a cap on the interest rate.
Innovations in financial inclusion to accelerate inclusive economic growth: Financial inclusion as a tool for combating poverty and ensuring broad-based inclusive economic growth is receiving high policy priority in Bangladesh. With formal financial institutions unenthusiastic in providing financial services to the poor due to high costs and risks, MFIs in Bangladesh went far in promoting financial inclusion. Around four-fifths of the adult population now receives basic financial services from regulated and supervised financial institutions, MFIs and cooperatives. To cover the remaining one-fifth, Bangladesh Bank is encouraging cost-saving innovative partnerships of financial institutions, MFIs and mobile phone/smart card based technology platforms.
Besides Bangladesh Bank, the post office department, and public utilities including the railway department have taken steps to introduce electronic money order, mobile phone-based utility bill/ rail ticket price payment. The Prime Minister's office with its Digital Bangladesh programme has taken some co-ordination initiative, which can be strengthened further. Bangladesh Bank is taking strong initiatives to reach under-served and unbanked people with banking facilities. Credit facilities have been extended to farmers and small entrepreneurs, who have been a 'missing middle' for long vintage. Bangladesh Bank's financial inclusion initiatives continue strong support for adequate lending for agriculture, SMEs, renewable energy and other productive sectors.
An ambitious and proactive agricultural credit policy has been declared by Bangladesh Bank which accords special priority to marginal farmers. A record disbursement target of Taka 126.17 billion for fiscal year 2010-11 (FY 11) has been declared, 9.6 per cent higher than in FY 10. Disbursement performance in FY 10 was impressive, around 97 per cent of the target. Innovative initiatives have been taken in introducing refinance line for landless sharecroppers in partnership with a reputed MFI. Bangladesh Bank has prevailed upon banks on their adopting more open processes in agricultural credit sanction and disbursement, with strong multilateral (Bangladesh Bank, Head Office and branch office of concerned banks) monitoring of credit disbursement and recovery.
Mobile phone numbers of borrowers are preserved in Bangladesh Bank and the lending banks for direct contact. Bank accounts for farmers have been opened at free of charge with nominal initial deposits of only Taka 10; around 9.0 million accounts have already been opened. These accounts are being used to disburse government input subsidies to the farmers. These accounts will also facilitate small savings, revolving loans, remittances etc.
A new 'SME and Special Programmes Department' has been established in Bangladesh Bank for coordinating and strengthening SME financing initiatives in the financial sector. The new department has issued elaborate SME lending guidelines titled "SME Credit Policy and Programmes". The guidelines prescribe an 'area approach' in identifying and utilizing specific comparative advantages of different regions for diverse range of SME activities. Bangladesh Bank has provided a refinance line of Taka 6.00 billion for small and medium enterprises, 15 per cent of which is reserved for woman entrepreneurs. Besides, SME credit up to Taka 2.5 million can be disbursed against personal guarantee to women entrepreneurs.
Bangladesh Bank has introduced Taka 2.0 billion refinance line in FY 10 against bank loans for environment-friendly investments in solar energy, biogas plants and effluent treatment plants. Bangladesh Bank itself switched over to solar-powered lighting by setting up a 20-kilowatt solar panel, as a move towards encouraging green energy in Bangladesh. A commercial bank has partnered with an NGO in working out a scheme of producing solar energy in 4000 remote households in haor areas in Sylhet. Elaborate guidelines on Green Banking covering energy-efficient office management, restrictions on lending to polluting industries, improved waste management and encouraging use of solar energy by financial institutions will be issued shortly.
Automation of banking sector: Bangladesh Bank is on the lookout for creative partnerships in regulated IT-based remote delivery of financial services. A number of Bangladesh Bank-approved initiatives are already in operation (to begin with, mainly in utility bill payments and in delivery of remittances from Bangladeshi workers abroad to their families at home), others are at various stages of implementation, with some of these, including smartcards and POS terminals, in delivery networks besides mobile phones.
Installation of 'Bangladesh Automated Clearing House (BACH)' is a remarkable event in the history of financial sector in Bangladesh which will ease the remittance channel and payment system, and therefore, will bring dynamism in business activities. Central bank reform programme initiated ICT packages includes Networking, Banking application, Enterprise Resources Planning (ERP) Solution, Enterprise Data Warehouse etc., with a view to ensuring efficient management of assets including human resources. ERP solution covers digitization of procurement (e-tendering), cash management, recruitment process (on-line application) etc. Electronic fund transfer network will soon go live.
Mobile phone-based remittance services in Bangladesh: Prompt delivery of workers' remittances, at affordable costs, to recipients in rural areas away from bank branches has for long remained a challenge for banks. Fast expanding mobile telephony in Bangladesh has opened up windows of opportunity for creative partnerships of banks and mobile telephone companies in devising cost-effective arrangements for delivery of remittances. A number of MFIs have joined hands with banks and mobile telephone companies.
Bangladesh Bank has been encouraging such bank-led partnerships which will bring win-win cases for all concerned. bKash, a subsidiary of BRAC Bank, in partnership with telephone operators in Bangladesh is working to provide financial services via mobile phones to the unbanked poor, particularly in rural areas. The bKash mobile wallet will be the customer account into which money can be deposited and out of which money can be withdrawn or used for various services. Trust Bank has taken initiatives to establish Pay-points in rural areas which will be used for domestic and international money transfer, disbursement of SME and agricultural credit, transferring government subsidies, pension funds and so forth. The bank using MFI linkages is extending credit to the crop sector. A few other bank-led financial inclusion initiatives (including the one by Dutch-Bangla Bank) are also in preparatory stage. Once implemented, all these will bring extensive progress in the arena of financial inclusion.
Monetary policy supportive of inclusive growth: Monetary and credit policies of Bangladesh Bank aim at maintaining price stability while also supporting growth pursuits with adequate monetary accommodation for all productive economic activities. Drafting of monetary policy is preceded by broad-based stakeholder consultations; post-announcement discussion sessions outside the central bank also provide Bangladesh bank with feedback. The monetary policy stance for FY 11 is designed to render meaningful support to government's policies and programmes aimed at placing the economy in firmer traction on path of faster inclusive growth and poverty reduction while also maintaining monetary and price stability. The monetary and credit policies will continue tight monitoring and discouragement of expansion of unproductive and speculative use of credit. Without compromising mainstream regulation and supervision, Bangladesh Bank's developmental stance played well in coping with recent financial crisis.
Since liberation, Bangladesh has made remarkable development turnaround proving the earlier prediction of 'basket case' utterly wrong. Indeed, Bangladesh has now become a success story of development recognized by the Wall Street Journal as well as by many rating agencies. Over the last three decades, per capita income has increased nearly four-fold and with its current trend of growth, middle income country status for Bangladesh is expected to be achieved by next three to four years.
Bangladesh Bank will continue designing of monetary and credit policies targeted at supporting attainment of the country's desirable growth targets through ensuring adequate credit flows to the productive sectors. It will also continue to encourage various financial innovative experimentations without forgetting its core role of maintaining financial stability and containing inflation. Mind it Grameen Bank was born in the womb of Bangladesh Bank. Bangladesh Bank's developmental stance will continue transmitting 'confidence' in the on-going uncertain time of financial crisis.
Dr. Atiur Rahman is Governor, Bangladesh Bank. This is a talk he delivered at the Legatum Centre for Development and Entrepreneurship, Massachusetts Institute of Technology (MIT) on October 12, 2010.