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PresentationonCentralBank
StrengtheningProject(CBSP)
d i i d anditsimpactongood
governance
Presentedby
Md.Mezbaul Haque
DeputyGeneralManager,CBSP
BackgroundoftheProject
Bangladesh Bank started its operation as the
central bank of the country in 1972 with 11
Banks Banks
Bangladesh Bank supported these institutions,
government and the nation as well with a
total manpower of around 2000
Over the last few decades, the size of
Bangladesh Economy has grown to manifolds
which essentially generated enormous
economic activities in the country which is
depicted in the following table
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2003 2012
No.OfBanks 49 47
NumberofFIs 28 30
Number ofMoneyChangers 236 y g
No. ofMFI 1381 631
GDP(inCrore Taka) 250182 384885
Total Credit(inCrore Taka) 107568 474004
Export(inCrore Taka) 40581 144432
I (i C T k ) 64257 240028 Import(inCrore Taka) 64257 240028
Remittance(inCrore Taka) 19869 83005
Total Manpowerofthe
centralbank
5461 4913
Graphshowingchangesindifferenteconomicactivities
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Supportingthesehugeeconomicactivitieswith
reducedlevelofmanpowerstrengthisbecoming
abigchallengeforBangladeshBank
Forinstances,PADpaymentattimesneedtopay
15500governmentcheques inaparticulardate
speciallyatthebeginningofthemonthwhich
usuallyneedtobedisposedbetween12to6pm
Ifittakeoneminutetoprocessacheque,itwill
requireatleast258.33manhourwhichrequires
atleast43personstocompletethesame
InCIBweusedtoreceive6000requestdaily
Wehadtheoptimumcapacityofdisposing
4000reportsperday p p y
Therefore,everydaywehadabacklogof
2000whichcreatedatimelagofoneand
halfmonthforobtainingCIBreport
BBfacedsimilarsituationinmanyofits
f l l k l d b functionalitieslikesaleandreimbursement
ofsavingscertificate,clearinggovernment
receipt,vaultoperationetc
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Delay/timelaginprocessingsuchtransactions
alwayscreatetheopportunitiesforunfair
ti practices
Ontheotherhandanymistakesinthesehuge
volumeoftransactionsmadethetasksof
reconciliationalmostimpossible
The result was immediately reflected in its Theresultwasimmediatelyreflectedinits
operationwithunmatchedfinancial
statementsofBBforoneandhalfmoths.
Asaresultboththeinternalandexternal
governancebecamearealchallengeforBB
Inordertofacethesechallenges,automation
ofitsbusinessprocessesbecameinevitableto
improvetheoverallefficiencyofthebank
Consideringthesechallenges,BBdecidedto
do a functional reorganization and automation doafunctionalreorganizationandautomation
ofitsbusinessprocesseswiththefinancial
assistancefromIDA/Worldbankin2003
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TheProject
Theprojectcomprisesseveralcomponents
whereweutilizedtheservicesofdifferent
international and national experts like Legal internationalandnationalexpertslikeLegal
Counsel,AMLAdvisor,ModernizationExpert,
NationalandInternationalHRAdvisors,Bank
SupervisionExpert,ChangeManagement
Advisoretc.
These experts were primarily engaged in Theseexpertswereprimarilyengagedin
reviewingtheexistingrules,regulations,acts,
policies,manualsandprocedures
Recommendationshavebeenmadeforrequired
modificationsandupgradationsinordertomake
thembefittingwiththecurrentrequirementof
thefinancialsectorofthecountryy
IncontinuationofthatMoneyLaundering
PreventionAct,CounterFinancingTerrorismAct
havealreadybeenamended.Amendmentshave
beenproposedforBankCompaniesAct,Financial
InstitutionsAct,ForeignExchangeRegulationAct
IslamicBankingGuidelines,RiskManagement
Guideline,StresstestingGuideline,Foreign
ExchangeGuidelines,SupervisionManualhave
beenprepared/revisedandnowinoperation
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APolicyAnalysisUnit(PAU)hasbeenformedand
nowinfulloperationasaregularpartofthe
organization.
A new Performance Management System (PMS) AnewPerformanceManagementSystem(PMS)
hasbeenintroducedconsideringbothworkand
competencyofanemployee
TNAandtrainingpolicyhavebeenpreparedand
implementedinthebank
MOU and Twining agreement has been signed MOUandTwiningagreementhasbeensigned
withAITandBankofThailandforHRD
Theseinitiativeshavemadesignificantimpacton
internalandexternalgovernanceofBB
Theothermajorcomponentsoftheprojects
arerelatedtotheautomationofbusiness
f h b k processesofthebank
Theobjectiveofthislargescaleautomation
initiativesistoenhancetheefficiencyofthe
centralbankandthegovernanceofthe
financial sector as well financialsectoraswell
Theseautomationinitiativesarebeing
implementedunderdifferentprojectsofBB
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Themajorautomationinitiativesundertakenby
BBarefollowings:
/ SettingupLAN/WAN ,InternetandIntranet
EnterpriseResourcePlanning(ERP)
Banking ApplicationPackage
EnterpriseDataWarehouse(EDW)
National Payment Switch (NPS) NationalPaymentSwitch(NPS)
SystemforMoneyLaunderingPrevention
DepartmenttocaptureCashTransactionReports
andSuspiciousTransactionReport
BangladeshAutomatedClearingHouse(BACH)
andBangladeshElectronicFundTransferNetwork
(BEFTN) (BEFTN)
CIB Online
Otherinhouseapplicationslikeetendering,EXP
Matching,AccessPassissuance,meetingroom
booking,vehiclerequisition,erecruitmentetc
ModernizationofOfficeLayout
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LAN/WANInternetandIntranet
BankWideLAN/WANConnectivityhasbeen
establishedandareinfulloperation
All BB offices departments are now AllBBoffices,departmentsarenow
connectedinasinglenetwork
DataCenterandDisasterRecoverySite(DRS)
hasbeenestablished
Around3800PCs,Laptopsarenowconnected
i h k inthenetwork
Thisnetworkisthebasicinfrastructureforall
otherapplicationsrunninginthebank
BBIntranet hasbeendevelopedandareinuseby
theofficials
Allrelatedregulations,laws,guidelines,reference
arenowavailabletoalltheofficialsofBBthrough
Intranet Intranet
Allemployeerelatedinformationincludingloans,
ProvidentFund,training,Salaryetcarenow
availableintheintranetthroughaninterfacewith
SAP
Allofficecirculars,officeorders,guidelines,salary
slip PF statements loan statements different slip,PFstatements,loanstatements,different
formsetcarenowavailableinsoftformandBB
hasstoppedprintingofthesehugedocuments
AsaresultBBisheadingtowardsitsobjectivesof
paperlessofficeandsavingtheenvironment
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EnterpriseResourcePlanning(ERP)
BBhasimplementedthreemodulesofSAP
HR and Payroll module HRandPayrollmodule
MaterialManagement(MM)Module
FinanceandControl(FICO)Module
Implementationoftheapplicationwas
envisagedtoimprovetheinternalgovernance
andefficiencyoftheorganization
EnterpriseResourcePlanning(ERP)
ERP 1. HR
Module
HR Leave,Training,
Transfer/Posting,
PersonalFile,
Promotion,
Increment,
Fixation PMS
Integratedsolution. Onceactionis
takenatoneplace,automatically
otherareaslikesalary,advance,
leavebalance,payrollareaetcwill
beupdated.Nobackendprocessing
of the action is required Fixation,PMS,
Retirementetc
oftheactionisrequired.
Payroll Salary
Management
Integratedsystem. Automated
deductions,accounttransfer,
calculationoftax,postingof
deductionsatdifferentheads,
updatingloanfileetcwillbe
automaticallydone.
Advance Allkindsof
advanceto
employees
Integratedsystem andautomatically
calculatetheinterestandpostthem
inFICO.Recordallrepayments
automaticallyfrom payroll.
Provident
Fund
Provident Fund
Management
Integratedsystem reducingallthe
backendworkload.
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2. Material
Managem
ent(MM)
Module
Purchase ofassets,
maintenanceof
assetregister,
Depreciationrunetc
Isfullyintegratedwiththe
financeandwill
automaticallyupdatethe
GLheads
3. FICO
M d l
Allthefinancial
i
Integratedsolutions.Once
ll h b h Module transactionsarenow
capturedinthe
systemthroughout
BB.Thesystemis
thenautomatically
preparingthe
requiredfinancial
statementsbranch
wise and on
allthebranches,
departmentsandoffices
capturedthetransactions
inthesystem,theA&BD
willbeabletopreparethe
consolidatedfinancial
statement.Thesystemwill
alsobeabletomonitorand
control the budgetary wiseandon
consolidatedbasis.
Thetransactionswill
becapturedand
postedinthesystem
bytheoriginator.
controlthebudgetary
allocationofvarious
departmentsandoffices.
BankingApplicationPackage
Objectives Modules Prospects
Automatethe
functionalitiesofthe
branchofficesand
CoreBanking Automated alltheprocessesofbanking
transactionsofall thebranchofficesand
FRTMD.Thiscoversallcashreceipt/payment
FRTMD coveringall
typesoftransactions.
transactions,clearing,transfers,remittances,
sanchay patra,Prizebond,WageEarnersbond,
claims,LCs,VaultOperationetc
Treasury
Management
Allthefunctionalitiesofdealingroom,mid
officeandbackofficeis covered.Nowinlive
operation.Allcorporateactionslikematurity
couponpaymentwilltackledbythesystem
M k t All th f ti liti f th G t Market
Infrastructure
AllthefunctionalitiesoftheGovernment
securitiesliketreasurybill,bond,repo,liquidity
support,special bondetchavebeenautomated
coveringbothprimaryandsecondarymarket
operation.Thiswillbringasignificantchangein
thecorporatefundmanagement.
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EnterpriseDataWarehouse
Objectives Modules Prospect
A central
databasewill
becreatedfor
Monetary
Analysis
Alldatarelatedmacro economicandmonetary
analysisiscapturedinthesystemthroughonline
collectionfromthesource.Nophysical
alltypesofdata
relatedto
centralbank.
Thisdatabase
willbe
accessibleby
theusersasper
theirgiven
authorization
movementofpeopleandpaperisrequired.All
relatedofficialsareabletoextractdatafromthe
centraldatawarehouseandusethesameintheir
officialjobs.
Prudential
Supervision
AlldatarelatedtosupervisionofbanksandFis is
capturedandstoredinthesystemthroughonline
collection process Related officials are able to
authorization.
collectionprocess.Relatedofficialsareableto
usethemattheirrequiredtime.
OLTP Alltheonlinetransactionprocessingdatais
capturedandpassedintothesystemwhichare
usedbytherespectiveuserslater on.
NationalPaymentSwitchUnderimplementation
Objectives Prospects
Ensuring theinter 1. Willactasan electronicclearing
operabilityofdifferent
paymentchannelinthe
countryinorderto
enhancethetradeand
commercethrougha
robustpaymentsystem
in the country
house
2. Willensurerealtimetransactions
butbatchsettlementatthedayend
3. Electronicpaymentthroughcards
willbeenhancedirrespectiveofthe
ownershipofthecard
4 Utility bills and other recurrent inthecountry. 4. Utilitybillsandotherrecurrent
paymentscanbemadethroughcard
5. Allcreditanddebitcardtransaction
processingcouldbesettledlocally
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SystemforCashTransactionReporting(CTR)and
SuspiciousTransactionReporting(STR)
UNODChasagreedtodeliverandinstallgo
AML ft d l d b th i AML,asoftwaredevelopedbythemin
BangladeshBank
Hardwarerequirementshavebeenfinalized
andareinprocessofprocurement
Expecting to be fully functional by December ExpectingtobefullyfunctionalbyDecember
2012
BangladeshAutomatedClearingHouse(BACH)and
BangladeshElectronicFundTransferNetwork(BEFTN)
Inliveoperationsince07October2010
Settlement of cheques without any physical Settlementofcheques withoutanyphysical
movementofpeopleandpaper
Interdistrictsettlementofcheques atthesame
timeframe
Capacitytohandlelargevolumeoftransactions
Paperless batch transactions like payment of Paperlessbatchtransactionslikepaymentof
salary,paymentofdividend,paymentofrefund
warrantetc.
PaperlesspaymentsettlementthroughBEFTN
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CIBOnline
Objectives Prospects
Makingthecredit
informationavailableto
1. Bankcangetthe
borrowerscredit
thebanksandfinancial
institutionsinorderto
speedingupthecredit
approvalprocessand
creditadministration
informationonlineand
hencethetimefor
approvaloftheloanwillbe
reduced significantly
2. ThenumberofCIBReport
withthefullcompliance
ofBankingCompanies
Act.
requestcamedownto20
from50006000perday
3. Nophysicalmovementof
peopleandpaper.
ModernizationofOfficeLayout
ThenewlyinstalledITsystemsneedthe
propersecurityandmaintenance p p y
Butthecurrentworkingenvironmentis
extremelyvulnerablefromtheperspectiveof
bothITsecurityandgoodworking
environment
Therefore,BBdecidedtomodernizeitsoffice
layoutwithcubiclechamberssothatproperIT
securitycanbeensured.
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CurrentOfficeEnvironment
CurrentOfficeEnvironment
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OfficeRenovationisinprogress
ModernizedOfficeofCBSP
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ModernizedOfficeofCBSP
Benefitsderived
Improvedregulatoryframework
Improvedknowledgebase
Improved and efficient customer service like Improvedandefficientcustomerservicelike
salaryofgovt.officialsincludingPrimeMinister
andMinistersarenowbeingpaiddirectlytotheir
bankaccountthroughEFT.
Paperlesstransactions
Integratedsolutionsreducingbackendjob g g j
Transparencyandbettermanagement
BetterGovernance
CommitmenttoEnvironment
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WayForward
FullfledgedimplementationofBaselIII
GraduationtoIRBapproachforcreditriskorthe
AdvancedMeasurementApproaches(AMA)for
operationalrisk
Cooperationinthefieldofstrengthening
supervisioninlightofBaselII&BaselIII
HumanResourceDevelopment
ITsecurity
U di ll d l l i li ith Upgradingallproceduralmanualsinlinewith
newITinfrastructure
RTGS
Financialsectorgovernance
ThankYou
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SectionofCBSPDataCenter
SectionofCBSPDataCenter