ROLES AND RESPONSIBILITIES

In order to carry out its mandate as specified in the RMA Act, the RMA is presently organized into eleven Departments. The following is a brief description of the roles and responsibilities of each Departments :

ADMINISTRATION AND FINANCE DEPARTMENT

The Administration and Finance Department is subdivided into 4 sections namely, Finance section, Procurement Section, HR & Personnel Section and Protocol & Hospitality Section. The Finance Section is responsible for preparing the annual capital and administrative budget, payment for utilities bill, disbursement of pay and allowances etc while the Procurement Section is responsible for procurement of supplies and equipment, fixed asset management and other administrative services. The HR & Personnel Section of the Department is responsible for formulating salary structure, ensuring compliance to RMA Staff Regulations, maintaining personnel records, recruitments and all other matters concerning the personnel of the RMA. This section is also responsible for processing all training related issues including correspondence with international training institutes. The Protocol and Hospitality Unit, which was established as a Department on 1st July 2004, now functions under the ambit of Administration and Finance Department. The Unit is responsible for making administrative arrangements like airport transfers, visas, hotel booking, reception and dinners for the official guests visiting RMA including travel arrangements for RMA staff proceeding abroad for training, seminar, workshop, meeting and conference. It is also responsible for the maintenance of security and diglam namzha in the office building including the repair and maintenance of office building and the pool vehicles. It manages the Staff Welfare Fund.

BANKING DEPARTMENT

The Banking Department maintains accounts on behalf of and executes daily transactions with commercial banks and the government. It also provides depository services with international financial institutions, and carries out transactions with overseas financial institutions. It acts as the RMA's executive organ for its liquidity management operations by planning, allotting, discounting and redeeming short-term bills, which are issued by the RMA for the purpose of moderating fluctuations in banking sector liquidity.

CURRENCY MANAGEMENT DEPARTMENT

This Department is responsible for all aspects of currency issuance and management. It is responsible for planning and arranging the printing of banknotes and the minting of coins, distributing banknotes and coins to the banks, providing facilities for the general public to exchange soiled and mutilated notes, and destroying soiled and mutilated banknotes. This department also maintains "currency chests" with selected branches of the commercial banks into which the bank's branch can deposit its excess cash holdings, or withdraw cash to meet its daily requirement.

FOREIGN EXCHANGE AND RESERVE MANAGEMENT DEPARTMENT

This Department is responsible for the formulation, amendments and implementations of Regulations concerning Foreign Exchange related transactions. Beginning August 1, 2010, all foreign exchange retail businesses are delegated to the commercial banks without reference to the RMA. The Department has framed a Foreign Exchange Operational Guideline 2010, where all foreign exchange transaction in Bhutan should be guided by the Guideline. However, Debt Repayment and any other foreign exchange remittances not covered by the Guideline require RMA’s approval. The department would at present concentrate on monitoring and inspection of foreign exchange transaction by the commercial banks. Further, Department is also responsible for managing the foreign currency assets of the RMA. It maintains accounts with foreign central banks, renowned international financial institutions and commercial banks. While managing the foreign assets, the department is required to ensure the safety and the liquidity of the country’s foreign exchange reserves, and also to obtain a reasonable rate of return on these assets. In addition, it also monitors the reserves holdings of the commercial banks and fixes the exchange rate for the foreign currencies and the bullions.

FINANCIAL REGULATIONS AND SUPERVISION DEPARTMENT

The Financial Regulation and Supervision Department of the Central Bank (RMA) is empowered by RMA Act 2010 and FI Act 1992 with the following responsibilities:

• To regulate and supervise the Bhutanese Financial System with a view to achieving an efficient and sound financial system in the interest of depositors and the economy as a whole.
• Implementation of policies, standards and regulations which are in line with international best practices for supervision and regulation.
• The FRSD issues regulations and guidelines to the financial institutions in Bhutan.
• The FRSD has been empowered to provide license of the entire financial service provider in the country.

Credit Information Bureau

Credit Information Bureau of Bhutan (CIB) is a unit under the FRSD of RMA that receives credit information from member institutions, consolidates and makes credit reports available to them. CIB will facilitate the FIs in improving the quality of assets. The Bureau will also access FIs in making proper credit decision upon the complete information and historical repayment record. Creditors can make informed decisions about lending to prospective borrowers after analyzing the credit report disseminated by the Bureau. The CIB will protect consumers by guarding against financial mismanagement in the form of credit rationing system (based on capabilities to service debt obligation).The Bureau will provide information that positively or negatively affects creditworthiness through the facilitation of credit information sharing and it facilitate large volume access to uncollateralized credit by reducing the cost and turnaround time of credit evaluation and decisions.

INTERNAL AUDIT DEPARTMENT

Internal Audit Department was set up in 1999 as a unit and later it was upgraded as a division in 2004. The Internal Audit Department was strengthened with the help of IMF Technical Assistant in 2005. The primary objective of the TA was to guide the RMA on the development of audit operations that are driven by risk based assessment of its functions. The Internal Audit Department is responsible for examining the risk that the RMA faces, reviewing the adequacy of the internal controls in place to protect it from those risk that RMA face, and verifying that the internal controls are working as intended. Implementing Risk Based Internal Auditing approach and using its knowledge, skills and professional competence, the Department executes inspections to examine, evaluate and report on the adequacy and reliability of existing systems and follow-up to ensure that:
• Laws, Regulations, Internal Policies and Procedures are meticulously followed
• Assets are properly maintained/utilized/safeguarded
• Operational and Reputational Risks are averted
• Adequate safeguards are taken for Bank's physical/operational/IT security
The Internal Audit Department functions under the supervision of the Director, who reports directly to the Governor.

INFORMATION TECHNOLOGY DEPARTMENT

This Department is responsible for planning, developing and supporting the computerization of the RMA's operations, development of data processing systems, managing and supporting of the RMA application systems, database, network and the RMA website.The Department also provides IT system support and services in implementing and managing electronic payment systems such as EFTCS,SWIFT and Financial Switch and other financial sector IT development.

MANAGEMENT SECRETARIAT

Management Secretariat, which was established on 01 January 2009, functions under the directives of the Governor and its chief function is to provide administrative/logistical and secretarial support to the Governor and the RMA Board in terms of coordinating RMA Board Meetings, maintaining Minutes of Board Meetings and liaising with external agencies under the directives of the Governor. In addition, the Secretariat also is responsible for coordinating the external communication policy particularly with regard to the information being disseminated through the RMA website.

PAYMENT AND SETTLEMENT SYSTEMS DEPARTMENT

The Payment and Settlement Systems Department (PSSD) is a new Department in the Royal Monetary Authority of Bhutan which became operational with effect from April 7, 2009. The Department is responsible for the development, regulation, oversight and efficiency of the payment and settlement systems in the country which currently include Cheque Truncation System, National Electronic Clearing System (NECS) Credit, National Electronic Clearing System (NECS) Debit, National Electronic Funds Transfer (NEFT) and the National Financial Switch. The Department is also responsible for monitoring the operations under SWIFT and the Asian Clearing Union (ACU).
The functions of the Department include the following:
• Development of payment and settlement systems in the country.
• Formulation of payment and settlement systems policies.
• Regulation of payment and settlement systems.
• Oversight of payment and settlement systems.
• Laying down standards for payment and settlement systems.

RESEARCH AND STATISTICS DEPARTMENT

The Research and Statistics Department of the Royal Monetary Authority of Bhutan is responsible for the compilation and analysis of the country’s macroeconomic statistics. The Department is the primary compiler of Bhutan’s monetary and balance of payments statistics, and a secondary user of real and fiscal sector statistics. The Department is also a secondary user of external sector statistics such as the merchandise trade and external debt data compiled by the Ministry of Finance.

Monetary statistics
The Department collects monetary and financial statistics from the Banking Department (RMA balance sheet) and FIs returns (Balance sheet) from the Financial Regulation and Supervision Department on a monthly basis. The monetary survey, money and banking statistics of commercial banks and financial statistics of other non-depository financial institutions are compiled and published.

Balance of payments statistics
The Department surveys over 50 different sources – government departments and corporations, financial institutions, private businesses, international organizations and diplomatic missions – to collect data for Bhutan’s balance of payments statistics which are published on an annual, fiscal year basis.

Real sector statistics
The Department collects and publishes data on Bhutan’s gross domestic product and consumer price inflation from the National Statistics Bureau of Bhutan.

Fiscal statistics
The Department collects and publishes budget data from the Ministry of Finance.

The Department is also responsible for the production and dissemination of the Authority’s Monthly Statistical Bulletin, quarterly Selected Economic Indicators and Annual Report. The Department also prepares ad hoc status and research papers related primarily to the country’s monetary and external sectors. Such papers are usually published in one of the Authority’s regular publications or produced as background paper for the management and the government.
The Department also coordinates and liaises with other agencies, internal and external, on matters relating to the country’s overall macroeconomic situation. In particular, the Department coordinates the IMF Article IV Consultation Missions, is the focal point for the IMF GDDS and SAARCFinance and provides statistical and economic information.