Bangladesh Bank was established as a body corporate vides the Bangladesh Bank Order, 1972 with effect from 16 th December 1971. All the members of the body must have experience and proven capacity in the fields of banking, trade, commerce, industry or agriculture-all nominated by the government. The broad objectives of the Bank are: a) To regulate the issue of the currency and the keeping of reserves, b) To manage the monetary and credit system of Bangladesh with a view to stabilizing domestic monetary value, c) To promote and maintain a high level of production, and to foster growth and development of the country's productive resources for the national interest. The head office of Bangladesh Bank is Motijheel. Besides this Bangladesh Bank have 8 branch offices, one in Dhaka city, and one each in Chittagong, Khulna, Rajshahi, Syhlet, Bogra, Rangpur and Barisal. There are 31 departments in the head office. The head office discharges its duties with 31 departments. The Bangladesh Bank performs all the functions that a central bank in any country is expected to perform. Such functions include maintaining price stability through economic and monetary policy measures, managing the country's foreign exchange and gold reserve, and regulating the banking sector of the country. Organizational structure of Bangladesh Bank Governor The governor chairs the board of directors. The executive staff, also headed by the governor, is responsible for the bank's day-today affairs. The Governor of the Bank shall be the Chief Executive Officer and shall, on behalf of the Board, direct and control the whole affairs of the Bank. The Governor shall be appointed by the Government on such salary and terms and conditions as may be determined by the Government. The Governor shall hold office for a period of four years and shall be eligible for re-appointment. The Governor shall not hold office if he attains the age of sixty five years. The Governors who have served since its inception are:
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The study embarked on finding out the effect and to what extent monetary policy instruments on credit delivery by banks. The problem of study is that high toxic assets remains high despite the policies placed over time thus questioning the effect of monetary policy on banks asset quality and returns. The objective of study in trying to evaluate the factors responsible for bank performance in Nigeria the research objective is to determine the level of effect of monetary policy-money supply, liquidity ratio; cash reserve ratio and monetary police rate on commercial banks credit delivery. The literature review contains the conceptual, theoretical and empirical review of the area of study. In the methodology of study, the data utilized include Cash Reserve Ratio (CRR), Turnover ratio, Liquidity ratio, Monetary Policy Rate (MPR), Money Supply (MS), Bank Assets and Loans and Advances (TLA). The study also used the ordinary least square (OLS) since it enabled the researcher to capture the essence of the work effectively in addition to its high level of simplicity and global acceptability. Moreover, a 5% confidence level is adopted for the study. The MPR, MSP and CRR have positive relationship with LADV. That is, the higher the MPR, MSP and CRR, the higher the LADV. However, LQR has negative relationship with LADV. The R 2 at 98.27% indicates that the variables are strongly fitted which was also confirmed by the adjusted R-2 found to be 98.0%. The t-test shows that t-cal for MPR is 0.176764 while its prob-value of 0.8608 is significant at 5% confidence level leading to the rejection that there is significant relationship between monetary policy rate and bank loans and advances. The t-cal for MSP is 30.01694 with a prob-value of 0.000 that is insignificant at 5% confidence level leading to the acceptance that there hence acceptance that there is significant relationship between money supply and bank loans and advances. The t-cal for LQR is-0.090313 with a prob-value of 0.9289 that is significant at 5% confidence level leading to the rejection that there is significant relationship between liquidity ratio and bank loans and advances. The t-cal for CRR is 0.861385 with a prob-value of 0.3956 that is significant at 5% confidence level leading to the rejection that there is significant relationship between cash reserve ratio and bank loans and advances. In the parsimonious error correction model the test shows that (R 2) is 57% implying a fairly fitted relationship between the variables and bank loans and advances. The Adjusted R-2 is approximately 48% also shows that 48 percent of changes in bank loans and advances, was jointly explained by MSP and CRR. The Error-correction coefficient of-0.431995 has the right sign (negative) and shows that 43%
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This study investigated the impact of monetary policy on the performance of deposit money banks – the Nigerian Experience(1993-2013).Data for this study were collected from the Central Bank of Nigeria (CBN) statistical bulletin, annual reports and statement of accounts. Ordinary Least Square and co integration were used to evaluate the impact of monetary policy on the performance of deposit money banks. The Augmented Dicker Fuller (ADF) unit root test and co integration proved that the variables are stationary and a long-run relationship exist among the variables The OLS revealed that amongst all the monetary policy variables (bank deposit rate, bank lending rate, cash reserve ratio and liquidity ration) considered in the model, only bank deposit rate has significant relationship though inverse relationship. On this premise, the study recommends among others, that the Central Bank of Nigeria (CBN) should moderate the deposit rate as a tool for regulating deposit money banks operation. Again there is need to modify the monetary policy instruments to reflect and respond more rapidly and easily to local economic conditions. Introduction A solid and stable financial sector is essential to make a well functioning national economy and ensure balance liquidity within the economy. Appropriate liquidity management is essential to foster economic growth. Though, to achieve economic stability proper uses of fiscal and monetary policies are required. Despite establishing regulatory agencies and monetary policy committees, Nigerian banks have actually been deterred in creating adequate liquidity and additional credit for the sustenance of the entire economy. The Central Bank of Nigeria (CBN) over the years, have instituted various monetary policies to regulate and develop the financial system in order to achieve major macroeconomic objectives which often conflict and result to distortion in the economy. Although, some monetary policy tools like cash reserve and capital requirements have been used to buffer the liquidity creation process of deposit money banks through deposit base and credit facilities to the public. Monetary policy remains a critical tool in stimulating the growth and stability of financial institution in most developing economics. In Nigeria, the objectives usually include promoting monetary stability. Strengthening the external sector performance and generating a sound financial system that will support increased output and employment. Monetary policy is a major economic stabilization weapon which involves measures designed to regulate and control the volume, cost, availability and direction of money and credit in an economy to achieve some specific macroeconomic policy objectives. Monetary policy according to Anyanwu (1993:140) involves a deliberate effort by the monetary authorities (the Central Bank of Nigeria) to control the money supply and credit conditions for the purpose of achieving certain broad economic objectives. Central bank also determines certain targets on monetary variables. Although, some objectives are consistent with each others, others are not, for example, the objectives of price stability often conflicts with the objectives of interest rate stability and high short run employment. The role of the banking industry in development process cannot be overemphasized as they play so many functions. The most important banking industry in Nigeria is the deposit money banks. In order to make profit, deposit money banks invest customer deposits in various short term and long term investment outlet, however core of such deposits are used for loans. Hence, the more loans and advances they extend to borrowers, the more the profit they make (Solomon, 2012). Prior to 1986 direct monetary instruments such as selective credit controls administered interest and exchange rates, credit ceilings, cash reserve requirements and special deposits to regulate the banking system were employed. The fixing of interest rates at relatively low levels was done mainly to promote investment and growth. Occasionally, special deposits were imposed to reduce the amount of excess reserves and credit creating capacity of the banks. When Central Bank actions and regulation restrict the activities and operations of profit making financial institutions such as deposit money banks, finance companies and non-financial institutions such as cooperatives , thrift institutions and pension funds, they immediately search on alternative ways of making profit. The policy constraints can also affect the level of development in the economy. The instruments of monetary policy do not affect economic activities directly; rather they work through their effects on financial markets. The
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