Bangladesh Bank Order, 1972 – Overview & Significance
The Bangladesh Bank Order, 1972 is the legal foundation that established Bangladesh Bank (BB) as the central bank of Bangladesh. This order outlines the functions, powers, and responsibilities of the bank in regulating the country’s monetary and financial system.
Background of the Bangladesh Bank Order, 1972
After the independence of Bangladesh in 1971, the newly formed government needed a strong financial institution to regulate the country’s monetary policy and banking sector. To achieve this, the President of Bangladesh issued the Bangladesh Bank Order on December 16, 1972, which led to the establishment of Bangladesh Bank as the country’s central monetary authority.
Key Features of the Bangladesh Bank Order, 1972
1. Establishment of Bangladesh Bank
- Bangladesh Bank was established as a statutory body.
- It replaced the Dhaka branch of State Bank of Pakistan and took over its assets and liabilities.
2. Objectives of Bangladesh Bank
- To regulate and supervise banks and financial institutions.
- To control inflation and monetary stability.
- To promote economic growth through financial management.
3. Functions & Powers of Bangladesh Bank
- Issuance of currency: Bangladesh Bank has the sole authority to print Bangladeshi Taka (BDT).
- Monetary policy regulation: Controlling money supply, inflation, and interest rates.
- Foreign exchange management: Regulating forex reserves and foreign trade payments.
- Financial sector supervision: Ensuring a stable banking system by monitoring banks and financial institutions.
- Government debt management: Acting as the banker to the government and managing its borrowing.
4. Autonomy & Governance
- Bangladesh Bank operates as an independent financial institution.
- It is managed by a Governor and a Board of Directors.
- The government has the power to issue directives in public interest.
Amendments & Evolution
Since its introduction in 1972, the Bangladesh Bank Order has been amended several times to adapt to modern financial and economic challenges. These amendments focus on:
✔ Strengthening anti-money laundering measures.
✔ Promoting financial inclusion through digital banking.
✔ Enhancing banking regulations to ensure transparency.
Significance of the Bangladesh Bank Order, 1972
✅ Established Bangladesh Bank as the country’s financial guardian.
✅ Ensured monetary stability and economic growth.
✅ Strengthened the banking sector and financial governance.
✅ Facilitated international trade and foreign investment.
Conclusion
The Bangladesh Bank Order, 1972 played a crucial role in shaping the country’s banking and financial system. As the regulator of the banking sector, Bangladesh Bank continues to drive economic progress through monetary stability, financial regulations, and policy implementation.
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Reference :
1️⃣ Bangladesh Bank Order, 1972 (Official PDF) –
https://www.bb.org.bd/aboutus/bankregulations/bbankorder.pdf
2️⃣ Bangladesh Bank Order, 1972 – Ministry of Finance –
https://mof.portal.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/ae8a2ff2_32ad_4dce_b7de_29518585d6ac/CC.pdf
3️⃣ Bangladesh Bank Order, 1972 – Laws of Bangladesh –
https://bdlaws.minlaw.gov.bd/act-415.html
These links provide the full legal text and amendments of the Bangladesh Bank Order, 1972.
