The Brunei Darussalam Central Bank (BDCB) plays a leading role in carrying the responsibilities of the country’s monetary policy, while also issuing Brunei’s currency as well as supervising and regulating the financial institutions operating in the country.
As stipulated under the Brunei Darussalam Central Bank Order, 2010, BDCB primarily aims to achieve and maintain domestic price stability; ensure the stability of the financial system through financial regulations and prudential standards; assist in the establishment and functioning of effective payment systems and subsequently, to oversee them; as well as to foster and develop a sound financial services sector.
The country’s current monetary system is based on the Currency Board Arrangement, underpinned by the Currency Interchangeability Agreement between Brunei Darussalam and Singapore.
2021 marked a significant milestone for BDCB after commemorating its 10th anniversary. This also coincided with Brunei’s ASEAN Chairmanship that year, with the central bank realising the initiatives through their role as Chair of ASEAN Central Bank Governors Meeting, ASEAN Capital Markets Forum and ASEAN Taxonomy Board for Sustainable Finance.
On the national agenda, BDCB contributes towards achieving and aligning Brunei Vision 2035 goals specifically in the areas of economy, digital economy and climate change. These efforts can be seen through initiatives such as the Technology Risk Assessment Framework (T-RAF) to address risks associated with technology and the establishment of a Digital Payment Hub to further enhance the digital retail payment landscape.
BDCB also publishes the Residential Property Price Index (RPPI) and the Business Sentiment Index (BSI) as the country’s key macroeconomic indicators. RPPI measures the rate at which the private residential properties purchased by households are changing over time, while BSI is designed to measure the sentiment and confidence of businesses in Brunei through surveys including future business conditions and investment.
To ensure efficient liquidity for the smooth functioning of the domestic banking system, BDCB conducts its monetary operations through the issuance of BDCB I-Bills and Overnight Standing Facilities. As part of its commitments to the Financial Sector Blueprint 2016-2025, and its continued efforts to develop an efficient money market, the two-week BDCB I-Bills based on the Syariah concept of Wakalah bil Ujrah were successfully launched with the maiden issuance on October 22, 2020. The BDCB I-bills aim to support the liquidity management of primary investors in Brunei Darussalam, and subsequently expand the list of money market instruments available to BDCB and the domestic financial sector.
BDCB has also worked to ensure that its objectives of achieving prudential standards and financial regulations are met through the issuance of several notices and guidelines.
In promoting market discipline through meaningful regulatory disclosure requirements, BDCB issued Revision to the Regulatory Notice on Pillar 3 – Public Disclosure Requirements, as well as Revocation of Regulatory Notice on Disclosure on Risk Management, Credit Management, Internal Audit Function, Compliance and Compliance Function and Internal Control Systems.
As Brunei experienced its second wave of infections in August 2021, BDCB worked closely with the financial industry to alleviate the burden faced by businesses and sustain the country’s economic activity. BDCB provided regulatory flexibility to banks following the rollout of interim measures to support specific sectors impacted by COVID-19. BDCB also helped lessen the burden faced by money changers by amending the Notice on Temporary Regulatory Relief Measure for Money- Changing Business.
BDCB primarily aims to achieve and maintain domestic price stability; ensure the stability of the financial system through financial regulations and prudential standards; assist in the establishment and functioning of effective payment systems and subsequently, to oversee them; as well as to foster and develop a sound financial services sector.
Despite the challenges posed by the pandemic, BDCB continued to deliver and uphold its mandate in ensuring the smooth functioning of its national Payment and Settlement systems, consisting of the Real-Time Gross Settlement System (RTGS), the Automated Clearing House (ACH) System and the Central Securities Depository (CSD) System. BDCB has also revised the Retail Payment Return (RPR) template, which will help enhance the adoption of technology and understand customer behaviour, thus further fostering growth and innovation in the retail banking sector.
To guard the financial sector against money laundering and terrorism financing, BDCB conducted offsite examinations – done as opposed to onsite due to the COVID-19 pandemic – to review internal control processes of financial institutions based on desktop review and analysis of documents provided or published by the financial institutions or Designated Non- Financial Business and Professions such as policies and procedures documents, audit reports and responses to AML/ CFT questionnaires.
BDCB has also compiled an Alert List to inform customers of the dangers and risks associated with financial companies that are not authorised and approved from regulations administered under BDCB.
Copyright 1993 Borneo Bulletin Yearbook All rights reserved.
