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Bangladesh’s Banking Industry and Its Major Banks
Bangladesh’s deposit-taking institutions operate as full banks, wholesale banks, merchant banks, or finance companies. Here you can learn about their licensing, regulations, and updates. Bangladesh’s Banking Industry and Its Major Banks as a developing economy to promote economic growth.
Banks have grown dramatically in the country in the past three decades or so. Bangladeshi banks have even gone a step further and are promoting financial inclusion of the very poor in rural areas, and microfinance and microcredit are policy instruments to achieve this target. This has led to a greater monetisation of the rural economy, as a result of which it has become more market-oriented. The market orientation of the rural economy also enabled continuous resource transfer from rural to urban areas. The most significant threat to sustained economic growth is now the banking industry itself, especially state-owned banks. In spite of Bangladesh’s adoption of internationally recognised banking practices such as the Basel Accord.
Financialisation of the Bangladesh economy has also created a situation where huge amounts of wealth were accumulated by sections of the rich through defrauding banks, in particular state-owned banks. Most experts agree that the stock market scams in Bangladesh are most likely linked to this fraudulent financial practice that aims to bankrupt small investors in order to gain control of various listed companies.
Our Dynamic Consultation On 4 Leading Banking Industries
1. State-owned Banks
There are six state-owned commercial banks (SOCBs) in Bangladesh, which are both fully or mostly owned by the government.
- Agrani Bank Limited
- Bangladesh Development Bank
- BASIC Bank Limited
- Janata Bank Limited
- Rupali Bank Limited
- Sonali Bank Limited
2. The Specialized Banks (SDBs)
We are currently operating 3 specialized banks, each of which was established for specific purposes such as agricultural development or industrial development. Most of these banks are also owned or controlled by the government of Bangladesh.
- Bangladesh Krishi Bank
- Rajshahi Krishi Unnayan Bank
- Probashi Kallyan Bank
3. Banks Owned by Private Commercial Companies (PCCs)
There are now 33 conventional PCBs operating in the industry. Banking is conducted in a conventional fashion, based on interest-based operations.
- AB Bank Limited
- Bangladesh Commerce Bank Limited
- Bank Asia Limited
- BRAC Bank Limited
- Citizens Bank PLC
- City Bank Limited
- Community Bank Bangladesh Limited
- Dhaka Bank Limited Etc
4. Islamic-based PCBs
The Bangladeshi banking sector has 10 Islamic Shariah-based PCBs that operate under a PLS model.
- Al-Arafah Islami Bank Limited
- EXIM Bank Limited
- First Security Islami Bank Limited
- ICB Islamic Bank Limited
- Islami Bank Bangladesh Limited
- Shahjalal Islami Bank Limited
- Social Islami Bank Limited
- Union Bank Ltd
- Standard Bank Limited
- Global Islamic Bank Ltd (former NRB Global Bank)
Get Our 7 Assistances To Take Banking Industry Success
Take a look at the reasons for the thriving banking industry,
- The liberalization of the domestic banking market
- Mergers and acquisitions strengthened local banks’ regional presence.
- Foreign banks expanded in Bangladesh, which in turn led to Bangladesh becoming a regional or even global platform for important banking services.
- Increased competition led to the development of innovative products and more competitive pricing models.
- The provision of sophisticated banking services, including corporate and investment banking, in addition to traditional lending and deposit-taking functions.
- The private banking boom was made possible by strict banking secrecy laws, tax-friendly policies, and a suite of wealth management services. Credit Suisse Group and UBS AG have expanded their private-banking operations in Bangladesh to meet the increasing demand from Asians and Europeans.
- Recognizing and meeting the needs of Small and Medium Enterprises who constitute a significant portion of the banking market in Bangladesh.
5 Trends in Bangladesh’s Banking Industry and Its Major Banks
The Monetary Authority of Bangladesh (MAS) launched a five-year liberalization package in May 1999 with the intention of strengthening the banking system and improving the country’s reputation as a financial hub. Some of the measures introduced include the introduction of Qualifying Full Bank (QFB) licenses to foreign banks, an increase in restricted banks, and greater flexibility given to offshore banks for Bangladesh Dollar wholesale business.
The Growth Of The Private Banking Industry
Bangladesh is known for its thriving private banking industry.
Investment Banking Hub Development
Bangladesh’s Banking Industry and Its Major Banks highlight the country’s capacity and potential to evolve into a major debt-arranging hub in Asia and a vibrant capital market.
The Enhancement Of Local Banking Groups
The consolidation of the previously 6 local bank groups into the 3 main local banks (DBS, OCBC, and UOB) has strengthened the banks’ capability to improve their management teams, operational efficiency, expand their range of business activities, and manage risks more effectively.
Banking Services For SMEs
The market is dominated by SMEs. Both local and foreign banks want to offer a wide range of services to meet these customers’ needs. The services and products designed to fit the needs of these businesses include deposit products, cash management services, loan products, card products, insurance products, trade financing services, and investment products. In addition, the government has come up with various financing schemes to assist SMEs to upgrade and expand their businesses.
FAQ For Bangladesh’s Banking Industry and Its Major Banks
How do banks work? What types of banks exist?
Financial institutions that receive deposits are known as banks. There are two kinds of banks: commercial banks and investment banks. Most of the time, banks are regulated by the national government or central bank.
What exactly is investment banking?
Financial asset management includes commodities and foreign currencies, fixed income, corporate finance, mergers and acquisitions advisory services, debt and equity writing, among others.
How does a commercial bank work?
Banks are owned by individuals or by members of the Federal Reserve System. Commercial banks offer services to both individuals and businesses, but they are primarily focused on receiving deposits and lending to businesses. Usually, a bank earns money through the interest it charges on borrowed money. The bank will use the funds deposited by the customer in order to provide business loans, auto loans, mortgages, and home improvement loans.
How do cashier's checks work?
The bank issues a cashier’s check on behalf of the customer and takes responsibility for payment. It is a direct payment from the bank’s own funds, signed by the cashier. This type of check is used when a speedy settlement is required.