Financial Institutions :Banking Structure of Bangladesh

Financial Institutions: Financial Institutions (FI) are companies engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange. Financial institutions encompass a broad range of business operations within the financial services sector including banks, trust companies, insurance companies, brokerage firms, and investment dealers. Financial Institutions can be divided into the following categories:

1. Non-Bank Financial Institutions (NBFI)
2. Bank
3. Special Financial Institutions

Prepared By: Anowar Parves, ACCA

A. Non-Bank Financial Institutions (NBFI – 34):

Non-Bank Financial Institutions (FIs) are those types of financial institutions which are regulated under Financial Institution Act, 1993 and controlled by Bangladesh Bank. Now, 34 Financial Institutions are operating in Bangladesh while the first one was established in 1981. Out of the total 34 –

a. fully government owned – 2;

b. subsidiary of a SOCB – 1;

c. initiated by private domestic – 15 and

d. joint venture initiative – 15.

Major sources of funds of Non-Bank Financial Institutions are Term Deposit (at least three months tenure), Credit Facility from Banks and other Financial Institutions , Call Money as well as Bond and Securitization.

The major features of these are as follows:

1. cannot issue cheques, pay-orders or demand drafts;
2. cannot receive demand deposits;
3. cannot be involved in foreign exchange financing;
4. cannot be a member of Clearing House etc.

The 34 NBFI’s include:

Bank: An establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers is termed as Bank. After the independence, banking industry in Bangladesh started its journey with 6 nationalized commercialized banks, 3 State owned specialized banks and 9 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:

B. Scheduled Banks:

The banks that remain in the list of banks maintained according to Article 36(2) of Bangladesh Bank Order, 1972 are Scheduled Banks. There are 59 scheduled banks in Bangladesh who operate under full control and supervision of Bangladesh Bank which is empowered to do so through Bangladesh Bank Order, 1972 and Bank Company Act, 1991. Scheduled Banks are classified into following types:

E. Specialized

F. Commercial

E. Specialized banks (SDBs): 3 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.

1. Bangladesh Krishi Bank
2. Rajshahi Krishi Unnayan Bank
3. Probashi Kallyan Bank

F. Commercial: Commercial Banks are of 3 types:

1. G. State owned commercial banks (SOCBs)
2. H. Foreign commercial banks (FCBs)
3. I. Private Commercial Banks

G. State owned commercial banks (SOCBs): There are 6 state owned commercial banks (SOCBs) which are fully or majorly owned by the Government of Bangladesh.

H. Foreign commercial banks (FCBs): In total 9 FCBs are operating in Bangladesh as the branches of the banks which are incorporated in abroad.

I. Private Commercial Banks: Private Commercial Banks are of two types:

J. Conventional PCBs

K. Private Islamic

J. Conventional PCBs: In total 33 conventional PCBs are now operating in the industry. They perform the banking functions in conventional fashion i.e. interest based operations.

K. Private Islamic: 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.

C. Non-scheduled banks:

Non-scheduled banks are licensed only for specific functions and objectives, and do not offer the same range of services as scheduled banks. There are now 5 non-scheduled banks in Bangladesh.

D. Special Financial Institutions:

There are some specialized FIs 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. Such as:

1. House Building Financial Corporation(HBFC)
2. Palli Karma Sahayak Foundation(PKSF)
3. Bangladesh Samabaya Bank Limited

[This has been prepared with the help of Wikipedia and Bangladesh Bank]

BCS Syllabus for Preli and Written

আপনার যে কোন প্রয়োজনে, চাকরির সার্কুলার ও আপডেট, এক্সাম ডেট, আপনার কোন কিছু জানার থাকলে নির্দ্বিধায় যোগদান করুন একঝাঁক প্রাণোচ্ছল তরুণের ফেসবুক গ্রুপ: BCS Limelight এ।

ফেসবুক বাটনে ক্লিক করে Financial Institutions :Banking Structure of Bangladesh কে আপনার টাইমলাইনে শেয়ার করে রাখুন।কষ্ট করে খুজতে হবে না। Notification অন করে রাখুন। নতুন পোস্ট এমনিতেই আপনার কাছে পৌছে যাবে।