Banking industry of Bangladesh
Banks safeguard money and provide loans, credit, and payment services such as checking accounts, debit cards, and cashier's checks. Banks also may offer investment and insurance products. As a variety of models for cooperation and integration among finance industries have emerged, some of the traditional distinctions between banks, insurance companies, and securities firms have diminished. In spite of these changes, banks continue to maintain and perform their primary role—accepting deposits and lending money.
After the independence, banking industry in Bangladesh started its journey with 6 Nationalized commercialized banks, 2 State owned Specialized banks and 3 Foreign Banks. In the 1980's banking industry achieved significant expansion with the entrance of private banks. Now, banks in Bangladesh are primarily of two types:
* Scheduled Banks: The banks which get license to operate under Bank Company Act, 1991 (Amended in 2003) are ...view middle of the document...
* Specialized Banks (SDBs): 4 specialized banks are now operating which were established for specific objectives like agricultural or industrial development. These banks are also fully or majorly owned by the Government of Bangladesh.
* Private Commercial Banks (PCBs): There are 39 private commercial banks which are majorly owned by the private entities. PCBs can be categorized into two groups:
* Conventional PCBs: 31 conventional PCBs are now operating in the industry. They perform the banking functions in conventional fashion i.e interest based operations.
* Islami Shariah based PCBs: There are 8 Islami Shariah based PCBs in Bangladesh and they execute banking activities according to Islami Shariah based principles i.e. Profit-Loss Sharing (PLS) mode.
* Foreign Commercial Banks (FCBs): 9 FCBs are operating in Bangladesh as the branches of the banks which are incorporated in abroad.
The banking sector of Bangladesh comprises of four categories of scheduled banks. These are state-owned commercial banks (SCBs), state-owned development finance institutions (DFIs), private commercial banks (PCBs) and foreign commercial banks (FCBs). The number of banks remained unchanged at 47 in 2012.These banks had a total number of 8322 branches as of December 2012 compared to 7961 in December 2011. At the end of June 2013, the total number of banks and their branches increased to 55 and 8427 respectively due to opening of new PCBs and bank branches during the year.
Banking system Structure of Bangladesh |
Bank types | In the year of 2012 ( Billion Taka) |
| Number of Banks | Number of Branches | Total assets | Percent of industry assets | Deposits | Percent of deposits |
SCBs | 4 | 3478 | 1831.9 | 26.0 | 1377.9 | 25.5 |
DFIs | 4 | 1440 | 385 | 5.5 | 260.4 | 4.8 |
PCBs | 30 | 3339 | 4371.5 | 62.2 | 3430.7 | 63.6 |
FCBs | 9 | 65 | 441.8 | 6.3 | 327.0 | 6.1 |
Total | 47 | 8322 | 7030.7 | 100 | 5396.0 | 100 |
Note: Banks prepare their balance sheet on calendar year basis, and are obliged to submit their audited balance sheet at the end of every calendar year. That is why banks' performance-related figures are stated in calendar year basis. |