Bangladesh Bank has appointed Citi Securities and Fund Services as its global custodian, marking a successful expansion into the South Asian nation for the bank.

The appointment comes just seven months after Citi first announced direct custody and clearing services in Bangladesh. Under the terms of the mandate the bank will provide consolidated reporting, corporate action processing, income collection, recordkeeping, safekeeping of assets and settlements monitoring.

"We were very impressed with Citi's experience and ability to customise a global custody solution that was consistent with the plans of Bangladesh Bank," says Amzad Hossain, general manager of Bangladesh Bank. "We continue to evolve as an offshore investor and through our global custodian partnership with Citi we are confident of expanding further in the coming years."

Citi will act as custodian for all of the central bank's offshore assets, largely concentrated in US Treasury bills. The mandate will not expand to domestic custody because the central bank does not invest in Bangladesh's domestic capital market.

According to the US Treasury Department, Bangladesh Bank's holdings of both long-term and short-term US Treasury bonds was valued at $159 million at the end of June.

The bank is the central bank's first global custodian. Previously, its custody mandates were limited to local custodians in individual markets.

With the mandate, Citi continues to build its custodial brand among public sector players. "The relationship between the public sector and Citi global transaction services in Bangladesh has become a hallmark of the franchise," says Parvez Murshed, director and Bangladesh head of global transaction services at Citi.

According to the bank, Bangladesh's central bank first issued a letter officially expressing interest to Citi's global custody services in April 2008.

Commenting on the future of public sector custody mandates, Citi managing director David Russell, says: "Public sector investors in Asia-Pacific will move further offshore and we are confident they will continue to turn to Citi for not only our leading product set but to leverage our unrivalled international experience and footprint." Undoubtedly, other banks with strong global custody offerings will be able to take advantage of this move as well.

In March the central bank of Cambodia selected Citi to provide it with offshore custody services.

Citi has won 10 foreign institutional investor mandates in Bangladesh since its December 2008 launch of direct custody and clearing services.

The bank offers custody and clearing in 16 Asia-Pacific markets, 18 including the Middle East.