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 roleaccepting 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 termed as Scheduled Banks.
Non-Scheduled Banks: The banks which are established for special and definite
objective and operate under the acts that are enacted for meeting up those objectives, are
termed as Non-Scheduled Banks. These banks cannot perform all functions of scheduled
banks.
There are 56 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:

State Owned Commercial Banks (SOCBs): There are 4 SOCBs which are fully or
majorly owned by the Government of Bangladesh.
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. ProfitLoss 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.

Bank
types

SCBs
DFIs
PCBs
FCBs
Total

Number of
Banks
4
4
30
9
47

Banking system Structure of Bangladesh

In the year of 2012
Number of
Total
Percent of
Deposits
Branches
assets
industry
assets
3478
1831.9
26.0
1377.9
1440
385
5.5
260.4
3339
4371.5
62.2
3430.7
65
441.8
6.3
327.0
8322
7030.7
100
5396.0

( Billion Taka)

Percent of
deposits
25.5
4.8
63.6
6.1
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.