Business

CHAPTER TWO

Introductory Aspect

This chapter includes-

History of Banking Industry

Banking System in Bangladesh

Banks in Bangladesh

Origin of the report

Literature Review

2.1 History of Banking Industry

General Introduction:

Banking system occupies an important place in a nation’s economy because of its intermediary role; it ensures allocation and reallocation of resources and keeps up the momentum of economic activities. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core at the money market of any country. In a developing country like Bangladesh the banking system as a whole has a vital role to play in the progress of economic development. The overall purpose of banking is to collect money from surplus unit and transfer it to the deficit unit.

Origin of Banking Industry:

The history of banking is as old as the history of many. Generally, to the necessity for keeping the money safe, the business of banking comes in to existence. The evolution if money solved the problem of ‘Barter System’. Earlier there are two groups of people. One group felt the need of honest and faithful person to keep their surplus money safe and the other group owing to transaction felt the need of some person who could provide money. As a result based on two groups a kind of businessman came in to picture. They used to keep the money as deposit for security and give loans to the needy people. This is how the banking sector has developed.

The English word ‘Bank’ is derived from the Italian word ‘Banco’. The Latin word ‘Bancus’ and the French word ’Banque’ which means a bench. They are of the opinion that the medieval.

European banker (i.e. moneychanger and moneylenders)...