The purchase, sale and rediscount of bill of exchange and promissory notes drawn on and payable in Bangladesh are also included in the activity of the bank. The bank acts as
the
lender of last resort for the government as well as for the country's scheduled banks. All scheduled banks are required to maintain a minimum reserve with the Bangladesh Bank. The present statutory liquidity reserve (SLR) requirement is
20% of total demand and time liabilities, 4% of which is to
be
maintained as cash reserve ratio (CRR), and the rest 16% as approved securities. The SLR requirement for Islamic banks is 10% and they are to keep 4% of this reserve
as CRR and the rest 6% in approved securities.
Bangladesh Bank exercises its wide range
of power in credit control
through different types
of traditional and non-traditional methods. In addition to bank rate
and
open market operations, it uses
a number of other weapons. It can vary
the minimum reserve
requirements of scheduled banks whenever circumstance so warrant. Being responsible for maintaining external value of Bangladesh currency, the bank also
handles the exchange control. It ensures that
all foreign exchange inflows are accounted for, and surrendered to
the authorized
dealers.
It allocates and rations foreign exchange in
line
with
the
set priorities. Bangladesh Bank is empowered to manage the country's international reserves, which represent aggregate of its
holding of gold, foreign exchange, SDR and reserve position in the IMF.
The
bank also acts as the representative of the government in different
international agencies and other forums such as World Bank, IMF, Asian Clearing Union, ADB, etc.
Bangladesh Bank is empowered to act as the watchdog of the country's BANKING SYSTEM, and all scheduled banks are accountable to Bangladesh Bank, which has extensive powers
to ensure soundness of
the banking
system. No bank can commence banking
business in
Bangladesh and no existing bank can open a new branch in or outside the country or shift
any
branch from one place to another without obtaining a license/permission from the
Bangladesh Bank.