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Like the economy of any other country, banking sector plays a vital role in the national economy in Bangladesh. It contributes to many arms of the country like agriculture, industry, power, trade service and so on. The scenario of banking sector in terms of disbursement, recovery, and trends of growth of credit to different sectors of the economy is very crucial for the development of the banking sector in particular and the country’s overall economic development in general.

The condition of banking sector in Bangladesh has been worsening in terms of credit and disbursement and risk management. Growth of credits in industrial sector, private sector and agricultural has been experiencing a declining trend.

In this part of our report, we will try to focus on the overall banking industry, its problems and possible future aspects.

Banking Industry of Bangladesh

Banking Industry Regulatory Body: Bangladesh Bank:

Bank performs regulatory body and performs all the functions that a central bank of any country is expected to perform, and such functions include maintaining the price stability through economic and monetary policy measures, managing the country’s foreign exchange and the gold reserve and regulating the banking sector of the country. Like all other central banks across the globe, Bangladesh Bank is both the Government’s banker and the banker’s bank, a “Lender of the Last Resort”. Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. Except for the 1 and 2 taka notes, it issues all other denominations of Bangladeshi Taka. Credit control, Clearing House, Control Money Market, Job creation, Agricultural development, SME development, Industrial development, and Natural resources development are also the functions of Bangladesh Bank.

Banks of Bangladesh can be divided into following categories:

1. State owned banks

2. Private banks

3. Foreign banks

4. Islamic...