The Ministry of Finance is responsible for over-seeing
the function of the financial institutions of the
country and also plans, implement and control public
expenditure policies and programs of the Government.
Both fiscal and monetary policies fall under its
A number of measures have been undertaken by the
Government during the nineties to strengthen the
banking system. These include improvement of legal
and regulatory framework, passage of the Bankruptcy
Act, 1997 and the Loan Court Amendment Act by Parliament,
enforcement of loan classification guide-lines,
recapitalisation of nationalized commercial banks
and the formation of Banking Reform Committee.
The Government is keen to correct and remedy past
failures and imperfections in the financial markets.
The reforms of the financial sector and trade liberalization
are being complemented by an appropriate foreign
exchange measures. An active exchange rate policy
to maintain the competitiveness of the economy is
also being followed.
The local currency Taka has been made convertible
in all current account transactions. Laws have been
amended to boost private and foreign investment
in the financial sector. A number of foreign banks
and financial institutions are already active in
the country. Two stock Exchanges in Dhaka and Chittagong
are also fully operational.