Royal Monetary Authority of Bhutan
Encyclopedia
The Royal Monetary Authority of Bhutan (Dzongkha: འབྲུག་རྒྱལ་གཞུང་དངུལ་ལས་དབང་འཛིན་; Wylie
: 'brug rgyal-gzhung dngul-las dbang-'dzin) is the central bank
of Bhutan
and is a member of the Asian Clearing Union
. It is also the minting authority
for the Bhutanese ngultrum
. The Royal Monetary Authority of Bhutan was established under the Royal Monetary Authority of Bhutan Act of 1982. Subsequently, the Act of 1982 was amended by the Financial Institutions Act of 1992 and replaced in its entirety by the Royal Monetary Authority Act of 2010.
, managing external reserves, and operating foreign exchanges. In 1988, the Authority assumed the role of government banker, holding the bulk of government deposits and providing financing. With the passage of the Financial Institutions Act of 1992, the substantive framework of the Authority was expanded to include licensure, regulation, and inspection of financial institutions in Bhutan. The Constitution of 2008
specifically authorizes the government to manage public finance and the monetary system, affirming previous law. Public finance is backed by the Consolidated Fund, while the monetary system is the purview of the Central Bank.Constitution
: Art. 14, §§ 2, 3, 5
on the Royal Monetary Authority, streamlined the codification of its functions. The Act of 2010 refines the framework of the Board of Directors and Executive Committee, which comprise the administration of the Authority.Royal Monetary Authority Act (RMAA) (2010): §§ 28–59 It also establishes an Audit Committee for internal auditing confirmed by external audits by the Royal Audit Authority, and for publication of statistics.RMAA (2010): §§ 64, 65, 156–168
The Board of Directors is a rulemaking authority consisting of seven people: a royally appointed Governor, as chair; two Deputy Governors, one of whom serves as Secretary; and four others appointed by the government including one member of the Ministry of Finance.RMAA (2010): §§ 33–37, 184 The appointed members hold office for five years, may be reappointed once, and are forbidden to hold political affiliations or substantial interests – including any shares – in financial institutions.RMAA (2010): §§ 37–39 The Deputy Governors are appointed by the Board itself.RMAA (2010): §§ 44–47 The Board, in addition to its rulemaking authority, is also authorized to establish divisions and delegate functions as it sees fit.RMAA (2010): §§ 31, 32
The Executive Committee also has seven members: the Governor; the two Deputy Governors; and and four others appointed from the among heads of Authority Divisions by the Governor in consultation with the Deputy Governors.RMAA (2010): §§ 56–59 The Governor, as the executive, is responsible to the Board for the implementation of the policy and the management of the Authority.RMAA (2010): §§ 60–63 The Act of 2010 further promulgates a code of professional and personal conduct, integrity and secrecy requirements, duties under conflict of interest, and a law of accountability for those employed in the Authority.RMAA (2010): §§ 74–85
The Act of 2010 also codifies the role of the Authority in currency, exchanges, official practices, and defines related penal offenses.RMAA (2010): §§ 87–107 The Act of 2010 streamlines regulations on external reserves and foreign exchange.RMAA (2010): §§ 108–118 It restates the relationship between the Authority and financial institutions and formally enables the Authority to act as the fiscal agent, adviser, and bank to the government of Bhutan.RMAA (2010): §§ 119–147 Under the law, government credit and solvency are substantively and procedurally regulated, restricting government loans and advising the government on its budget to prevent indebtedness.RMAA (2010): §§ 148–154
Wylie transliteration
The Wylie transliteration scheme is a method for transliterating Tibetan script using only the letters available on a typical English language typewriter. It bears the name of Turrell V. Wylie, who described the scheme in an article, A Standard System of Tibetan Transcription, published in 1959...
: 'brug rgyal-gzhung dngul-las dbang-'dzin) is the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Bhutan
Bhutan
Bhutan , officially the Kingdom of Bhutan, is a landlocked state in South Asia, located at the eastern end of the Himalayas and bordered to the south, east and west by the Republic of India and to the north by the People's Republic of China...
and is a member of the Asian Clearing Union
Asian Clearing Union
The Asian Clearing Union , with headquarters in Tehran, Iran, was established on December 9, 1974 at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific...
. It is also the minting authority
Mint (coin)
A mint is an industrial facility which manufactures coins for currency.The history of mints correlates closely with the history of coins. One difference is that the history of the mint is usually closely tied to the political situation of an era...
for the Bhutanese ngultrum
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...
. The Royal Monetary Authority of Bhutan was established under the Royal Monetary Authority of Bhutan Act of 1982. Subsequently, the Act of 1982 was amended by the Financial Institutions Act of 1992 and replaced in its entirety by the Royal Monetary Authority Act of 2010.
History
The Royal Monetary Authority was established in 1982. The following year, it took on the responsibilities of issuing Bhutanese currencyBhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...
, managing external reserves, and operating foreign exchanges. In 1988, the Authority assumed the role of government banker, holding the bulk of government deposits and providing financing. With the passage of the Financial Institutions Act of 1992, the substantive framework of the Authority was expanded to include licensure, regulation, and inspection of financial institutions in Bhutan. The Constitution of 2008
Constitution of Bhutan
The Constitution of Bhutan was enacted July 18, 2008 by the Royal Government. The Constitution was thoroughly planned by several government officers and agencies over a period of almost seven years amid increasing democratic reforms in Bhutan...
specifically authorizes the government to manage public finance and the monetary system, affirming previous law. Public finance is backed by the Consolidated Fund, while the monetary system is the purview of the Central Bank.Constitution
Constitution of Bhutan
The Constitution of Bhutan was enacted July 18, 2008 by the Royal Government. The Constitution was thoroughly planned by several government officers and agencies over a period of almost seven years amid increasing democratic reforms in Bhutan...
: Art. 14, §§ 2, 3, 5
Authority administration
The Royal Monetary Authority Act of 2010, the latest legislationBhutanese legislation
Bhutanese legislation is created by the bicameral Parliament of Bhutan. Either the upper house National Council, the lower house National Assembly, or the Attorney General may author bills to be passed as acts, with the exception of money and financial bills, which are the sole purview of the...
on the Royal Monetary Authority, streamlined the codification of its functions. The Act of 2010 refines the framework of the Board of Directors and Executive Committee, which comprise the administration of the Authority.Royal Monetary Authority Act (RMAA) (2010): §§ 28–59 It also establishes an Audit Committee for internal auditing confirmed by external audits by the Royal Audit Authority, and for publication of statistics.RMAA (2010): §§ 64, 65, 156–168
The Board of Directors is a rulemaking authority consisting of seven people: a royally appointed Governor, as chair; two Deputy Governors, one of whom serves as Secretary; and four others appointed by the government including one member of the Ministry of Finance.RMAA (2010): §§ 33–37, 184 The appointed members hold office for five years, may be reappointed once, and are forbidden to hold political affiliations or substantial interests – including any shares – in financial institutions.RMAA (2010): §§ 37–39 The Deputy Governors are appointed by the Board itself.RMAA (2010): §§ 44–47 The Board, in addition to its rulemaking authority, is also authorized to establish divisions and delegate functions as it sees fit.RMAA (2010): §§ 31, 32
The Executive Committee also has seven members: the Governor; the two Deputy Governors; and and four others appointed from the among heads of Authority Divisions by the Governor in consultation with the Deputy Governors.RMAA (2010): §§ 56–59 The Governor, as the executive, is responsible to the Board for the implementation of the policy and the management of the Authority.RMAA (2010): §§ 60–63 The Act of 2010 further promulgates a code of professional and personal conduct, integrity and secrecy requirements, duties under conflict of interest, and a law of accountability for those employed in the Authority.RMAA (2010): §§ 74–85
The Act of 2010 also codifies the role of the Authority in currency, exchanges, official practices, and defines related penal offenses.RMAA (2010): §§ 87–107 The Act of 2010 streamlines regulations on external reserves and foreign exchange.RMAA (2010): §§ 108–118 It restates the relationship between the Authority and financial institutions and formally enables the Authority to act as the fiscal agent, adviser, and bank to the government of Bhutan.RMAA (2010): §§ 119–147 Under the law, government credit and solvency are substantively and procedurally regulated, restricting government loans and advising the government on its budget to prevent indebtedness.RMAA (2010): §§ 148–154