Name: Robiul Awal, ID: 163431040

Assignment

On

“A study on financial institutions in Bangladesh, contribution of that in this

pandemic situation”

Submitted to

Saiful Islam

Lecturer

Course Instructor: FIN403 Financial Institutions

Department of Business Administration

City University

Submitted By

Md.Robiul Awal

Batch: 43rd KF

ID:163431040

Subject: FIN403 Financial Institutions

Program: BBA

Department of Business Administration

City University

Khagan, Ashulia, Dhaka

Date of Submission: 27-07-2020

Page | 1
 Name: Robiul Awal, ID: 163431040

Acknowledgement
First of all, we wish to express our gratitude to the almighty ALLAH for giving us the strength to
perform our responsibilities as an intern and complete the assignment within the stipulated time.

We deeply indebted to our Faculty Advisor Saiful Islam Lecturar, Department of Business
Administration City University. For his full support and encouragement

It was opportunity to me to learn about a lot of things about financial institutions and their
contribution in this pandemic situation which play a key role in the economy.so all credit goes
to our honorable instructor Saiful Islam. I really want to express my heartiest gratitude to him
for his valuable advice and time he gave me.

Executive summary

Economy is the backbone of a nation. Which country’s economy is strong those are more
developed.in our country Agriculture and industry play a vital role to accumulate and making
the economy strongest.
Our country’s Lion share of economy comes from agriculture and Industry. Agriculture support
to local people for making and consuming indigenous product and sell them to abroad. On the
other hand industry especially garments pharmaceuticals shipbuilding real estate frozen food is
the major industrial sector for making economic development.
In this assignment we try to express the contribution of various financial institutions and their
contributions in the Corona virus pandemic which help to grow Bangladesh economy. This
assignment will shows that the relation between financial institutions, Government and
economy. How Bangladesh’s economies survive in the Novel corona Virus pandemic and what
factors that help the economy to survive.
Not only Bangladesh but Also All over the world’s economy falling rapidly .every country’s
stock market fall heavily.

Page | 2
 Name: Robiul Awal, ID: 163431040

Table of contents

Seri Topics Pag

al e
No No
1st Title page 1
Acknowledgement 2

Executive summary 2

Table of content 3-4

CHAPTER ONE
Introduction
1.1 Background of the assignment 5
1.2 Objectives of assignment 5
1.3 Methodology 5-6
1.4 Sources of data Collection 6
1.5 Limitation of the report 6
CHAPTER TWO
Country And Festival Overview
2.1 About the Financial institutions of Bangladesh 7
2.2 Role of Financial Institutions in Bangladesh Economy 8
2.3 Financial institutions take several factors which help to economic growth of 11
Bangladesh in pandemic
2.4 International help of Bangladesh economy for Covid-19 13
2.5 14
Challenges for financial institutions during Covid-19 crisis
2.6 Various types of steps taken by Bangladesh Government for stability of 15
economic growth
CHAPTER THREE
Findings & Analysis

Page | 3
 Name: Robiul Awal, ID: 163431040

3.1 Findings & Analysis 16

CHAPTER FOUR
Recommendation& Conclusion
4.1 Recommendation 17
4.2 Conclusion 17

Page | 4
 Name: Robiul Awal, ID: 163431040

1.1Background of the assignment

The coronavirus outbreak has impacted financial markets and consumer sentiments; and with
the ongoing liquidity concerns and lockdown situations it seems there’s more trouble brewing
for financial institutions.
Soon after the World Health Organization declared the Novel Coronavirus outbreak a pandemic,
Investors started pulling out their money. The stock markets of the world crashed. Central banks
made off-cycle rate cuts and injected liquidity to keep the economy moving.

1.2 Objectives of the assignment

The prime objective of the report is to get practical knowledge about the overview of our financial
institutions and their contribution of pandemic situation in Bangladesh and how they play
important role in economic development in this situation. Besides the prime objective; the report
has been composed to obtain the following specific objectives:

· To present an over view of economy of Bangladesh.

· To know an overview of financial sectors in Bangladesh and their contribution in Covid 19 crisis.

· To know which industry contributes highest portion to the financial sectors in Bangladesh in
pandemic situation

· To know Financial Institution overcome corona virus pandemic..

· To identify the problems of financial institutions which impact economic development during
corona virus.

1.3Methodology:

To prepare the report the following are the important terms:

Processing of Data:

Data have been processed with the help of Microsoft Word.

Page | 5
 Name: Robiul Awal, ID: 163431040

Analysis of Data:

Data have been analyzed & interpreted with various tools.

Different ratios have been used to identify the performance of financial institutions in Bangladesh
during corona virus pandemic

1.4Sources of Data:

The information for preparing the report have been collected from various sources such as internet,
Magazines,News papers,books,blog post etc

1.5Limitations of the Study:

In preparing the report, some problem is found, affected the presentation of the report. The acute
problems are-

a) Lack of information or data:

The information related to different issues for the leasing sector is not properly available. As a
result in the report there is a data limitation. Specially, the information concerning our country is
tough to get.

b) Time constraint:

It is something like impossible to cover in depth of the report within the short time period.

In spite of all the drawbacks faced, everything has been managed well at the end. That’s why it
can be thought; the report is a quality report on the financial sectors in Bangladesh and impact of
leasing sector on our economy. So readers are requested to consider these limitations while reading
and justifying any part of study.

Page | 6
 Name: Robiul Awal, ID: 163431040

2.1About the Financial Institutions of Bangladesh:

Financial institutes play an important role for the economic development of any country. The
objective of these institutions is to accumulate the scattered deposit and invest it in a productive
manner for economic emancipation.

There are 51 schedule banks (January 2001) operate in Bangladesh. Of them 4 nationalized
commercial banks, 5 specialized banks, 30 private commercial banks and 12 foreign banks. The
number of branches of those banks is 6242. Of which 2511 (40.2% of total) are in urban areas and
rest 3731 (59.8% of total) are in rural areas.

Up to February 2002, of fiscal 2001-2002, total deposit and loan of all banks is taka 85259.8 and
Taka 69392.6 Cr. Respectively.

For proper monitoring the operations of banks, Bangladesh bank introduces “Problem Bank
Monitoring Division” in addition to CAME RATING. To increase the economic activities
Bangladesh bank reduces the bank rate to 6% from 7%.

To increase customer services banks are using various modern techniques like on line banking,
ATM, Money Gram, Credit Card etc.

The coronavirus outbreak has impacted financial markets and consumer sentiments; and with
the ongoing liquidity concerns and lockdown situations it seems there’s more trouble brewing
for financial institutions.
Soon after the World Health Organisation declared the Novel Coronavirus outbreak a
pandemic, a sudden pandemonium broke loose across the globe.

Investors started pulling out their money. The stock markets of the world crashed. Central banks
made off-cycle rate cuts and injected liquidity to keep the economy moving.

Types of Financial Institution

A financial institution is basically an establishment that conducts financial transactions such as

investments, loans and deposits.

There are five main types of financial institutions.

Page | 7
 Name: Robiul Awal, ID: 163431040

1.Commercial banks: commercial banks worked directly with businesses. Currently, the majority
of large banks offer deposit accounts, lending and limited financial advice to both demographics.

2. Investment Banks:: Investment banks do not take deposits; instead, they help individuals,
businesses and governments raise capital through the issuance of securities. Investment companies,
more commonly known as mutual fund companies, pool funds from individual and institutional
investors to provide them access to the broader securities market.5

Brokerage Firms: Brokerage firms assist individuals and institutions in buying and selling
securities among available investors.

3. Insurance Company: Financial institutions that help individuals transfer risk of loss are known
as insurance companies. Individuals and businesses use insurance companies to protect against
financial loss due to death, disability, accidents, property damage, and other misfortunes

4. Mortgage: most mortgage companies serve the individual consumer market, some specialize in
lending options for commercial real estate only.

5. Investment Company: Investment companies, more commonly known as mutual fund

companies, pool funds from individual and institutional investors to provide them access to the
broader securities market.

The primary role of financial institutions is to provide liquidity to the economy and permit a higher
level of economic activity than would otherwise be possible.

According to the Brookings Institute, banks accomplish this in three main ways: offering credit,
managing markets and pooling risk among consumers.

If you are familiar with GDP, the investment portion is heavily influenced by financial institutions,
as they facilitate how much people save and invest in an economy, which is an ingredient for
economic growth.

Without financial institutions, people wouldn’t be able to take advantage of rising and falling
interest rates and there would be no saving of money, other than the stacks you stuff under your
mattress.

2.2Role of Financial Institutions in Bangladesh

Financial institutions play an important role in the economic development of a country. The
objective of these institutions is to accumulate the scattered deposits and invest them in
product ive manner for economic uplift ment . The financial market is creat ed to
sat isfy particular preferences of market participants. These markets transfer funds from
those who have excess funds to those who need funds. That is, they facilitate the transfer of
funds from surplus units to deficit units. Because the funding needs vary among deficit units,
various financial markets have been est ablis hed. T he pr imar y market allo ws for t he

Page | 8
 Name: Robiul Awal, ID: 163431040

issuance o f new secur it ies, while t he secondary market allows for the sale of short-term
securities; the capital markets facilitate the sale of long-term securities. The main participants
of financial markets can be classified as households, businesses and government agencies.
These participants who provide funds tote financial market are called surplus units.
Households are the main type of surplus units. Participants who use financial markets to obtain
the funds are called deficit units. B a ng la d e s h is a co u nt r y t hat s u ffe r s fr o m i m m e ns e
s o c ia l, po l it ic a l, e co no mic a nd environmental factors, and these issues need to be
addressed for the overall development of the country. However, economic development is
one of the prime areas, which can resolve many of the country's current problems. The growth
of businesses in the market economies has cr eat ed great opport unit ies for Bangladesh
in furt her ing development . Eco no mic development refers to changes that affect a local
economy's capacity to create wealth for local resident s (Kane & Sand 1988). The socio -
economic development means simult aneous development in both social and economic
aspects of a country. Socio-economic development of Bangladesh can be ident ified
t hrough a number o f socia l and econo mic indicat ors, including GDP growth, povert y
issues, employment, healthcare, environment, education, trade and commerce etc. The
banking sector is playing a significant role in the development of the country. The financial
market can be classified into two categories.

The Financial Institution

First off, we need to understand what a financial institution is. A financial institution is basically an

establishment that conducts financial transactions such as investments, loans and deposits.

There are five main types of financial institutions.

1.Commercial banks

2. Investment Banks

3. Insurance Company

Page | 9
 Name: Robiul Awal, ID: 163431040

4. Brokerage

5. Investment Company

You can see the definitions for all of them here.

The primary role of financial institutions is to provide liquidity to the economy and permit a higher

level of economic activity than would otherwise be possible.

According to the Brookings Institute, banks accomplish this in three main ways: offering credit,

managing markets and pooling risk among consumers.

If you are familiar with GDP, the investment portion is heavily influenced by financial institutions,

as they facilitate how much people save and invest in an economy, which is an ingredient for

economic growth.

Without financial institutions, people wouldn’t be able to take advantage of rising and falling

interest rates and there would be no saving of money, other than the stacks you stuff under your

mattress.

As constructive members of society, financial institutions have an integral role to play in

supporting real people, real lives, real economies, and to share the pain in a downturn.

Page | 10
 Name: Robiul Awal, ID: 163431040

2.3Financial institutions take several factors which help to economic growth of Bangladesh
in pandemic:

1. PROVIDING CASH FLOW SUPPORT

Governments implementing lockdowns mean businesses and individuals are being starved of
income.

Expenses, however, still have to be met. With money not coming through the door, cash flow has
become the single biggest need. This is particularly true of individuals and small and medium-
sized enterprises (SMEs), which may not have the reserves that large companies do.

Since the biggest cash outflow for individuals or SMEs tends to be for a mortgage or some other
loan, banks have announced moratoriums on interest and/or principal payments until the year end.

2. LOWERING THE COST OF LENDING

One way banks have done this is to allow eligible customers to convert credit card loans, which
draw annual interest in the 20+ per cent range, to a term one where the effective rate is capped at
8 per cent.

3. PROVIDING NEW KINDS OF LENDING TO MARGINAL BORROWERS

The Government has stepped in to cover risk up to 80 per cent to 90 per cent of some SME loans.
This improves dramatically a bank's ability to give a loan to the marginal borrower.

4. HELPING CUSTOMERS DO THEIR BANKING DIGITALLY

This has become imperative during the circuit breaker period when companies outside of essential
services must facilitate full telecommuting. With employees working from home, it makes no
sense to still have to go to the branch to carry out banking transactions.

The "contact-free" trade financing digital capabilities we introduced in February allow corporate
customers to conduct 11 everyday trade financing solutions such as applying for letters of credit
online. They had to be done at trade counters or branches previously.

The banks have assured employees that there will be no layoffs arising from Covid-19.

Page | 11
 Name: Robiul Awal, ID: 163431040

I was recently asked about how far a bank's social responsibility extends, insofar as the pandemic
goes. How should we balance our obligation to shareholders and other stakeholders, including
employees, customers and society at large?

At the heart of this question is the debate between the virtues of "shareholder capitalism" and what
is increasingly referred to as "stakeholder or conscious capitalism".

The shareholder school posits that a corporation's role is to maximise shareholder value, while
other societal goals should be left to agencies like investors or the Government, which are better
suited to that role.

I believe there are deeper underlying questions that this view begs. For example:

 Are corporation’s independent entities with obligations of their own, independent of

shareholders?
 Are governments adequately equipped to address some of the knotty, transnational
problems faced by the world?
 Is there really a conflict between the interests of shareholders and those of other
stakeholders?
The fact is that corporations are "living beings" for all intents and purposes and have an obligation
to the common good, just as all other living beings. This requires them to look after the interests
of employees and customers, as a start. It also places an obligation to address other community
imperatives as part of their charter.

The scale of the pandemic is such that it cannot be left to governments to find resolution on their
own. And the truth is that private sector corporations are some of the biggest actors on the world
stage, and have an ability to carry influence across borders.

There is also no real conflict between shareholder and stakeholder interests.

The issue is one of timeframes. While there may be some trade-offs between maximizing
shareholder returns and providing societal benefits in the short term, addressing broader issues in
society is completely consistent with shareholder interests in the long term.

The economic impact of Covid-19 will be long-lasting, and my hunch is that it will take us into
the fourth quarter before we see any meaningful revival of activity. The reason it will take so long
is that it is not easy to start turning on the engine for the global economy.

In China, while 90 per cent to 95 per cent of employees are now back at work, factories are
operating at only 50 per cent to 60 per cent of capacity. This is because demand has collapsed in
the West and export-oriented industries will see operations return to normal only when there is a
synchronized recovery globally.

To get the economic engine revving quickly, we have to ensure that when demand returns, SMEs
can quickly activate their businesses. This means giving them the wherewithal to weather the next
few quarters; to keep workers on the payroll and supply chains intact.

Page | 12
 Name: Robiul Awal, ID: 163431040

The liquidity, lines of credit, and support that banks are giving serve to protect jobs and markets.

In a crisis, everyone has a role to play. Governments are pitching in, taxpayers are pitching in,
banks are pitching in, and shareholders have got to pitch in. As responsible members of the
community, there are no two ways about it.

2.4International organisations contribution of pandemic

World Bank Provides Bangladesh Over $1 billion to Create Quality Jobs and Respond to covid-
19 pandemic WASHINGTON, June 19, 2020 —The World Bank today approved $1.05 billion
for three projects to help Bangladesh create quality jobs and accelerate economic recovery from
the COVID-19 (coronavirus) pandemic as well as build resilience to future crises.

The $500 million Private Investment and Digital Entrepreneurship (PRIDE) Project will promote
and attract about $2 billion direct private investments and strengthen social and environmental
standards in selected public and private economic zones and software technology parks. It will
also create 150,000 jobs, of which a percentage will be dedicated to women--about 40 percent in
software parks and 20 percent in Economic Zones.

It will also develop the Bangabandhu Sheikh Mujib Shilpa Nagar II in Mirsarai-Feni, including
road networks with stormwater drainage, solar-powered streetlights, climate-resilient water,
sanitation, and power network. The project will also establish Dhaka’s first digital
entrepreneurship hub in the Janata Software Technology Park and turn it into a green building. By
attracting domestic and foreign private investment, including in the IT and ITES sectors, the
project will help the economy to rebound from the impacts of COVID 19.

The $295 million Enhancing Digital Government and Economy (EDGE) Project will establish an
integrated, cloud-computing digital platform for all government agencies and improve cyber-
security, which will result in savings of $200 million in the public sector’s IT investments. Further,
it will build resiliency during future crises, whereby the platform will enable the government to
operate virtually and deliver critical public services to citizens and businesses.

The project will create 100,000 jobs, with a special focus on women, train 100,000 youth in digital
and disruptive technologies, and establish a digital leadership academy and centers of excellence.
It will also help raise the revenues of IT firms by $300 million and promote local IT firms in
international markets. To reduce vulnerabilities from the pandemic and prepare for the Fourth
Industrial Revolution, the project will help digitalize small and medium enterprises and strategic
industries.

Page | 13
 Name: Robiul Awal, ID: 163431040

The $250 million Second Programmatic Jobs Development Policy Credit will create fiscal space
to support the government’s response to the COVID-19 crisis, while helping recovery and building
resiliency of the economy, of workers and of vulnerable populations to future shocks.

The financing will help Bangladesh to create large-scale jobs for citizens, including women, youth,
and migrant workers. The project —second in a programmatic series of three—supports reforms
to modernize the trade and investment regime, build a stronger system of expanded safety nets and
labor protections, and help vulnerable population access better jobs, especially during crises.

2.5Challenges for financial institutions during Covid-19 crisis

1. Deterioration in the asset quality:

The main strength of the NBFIs is quality asset. Asset quality may be deteriorated in
this crisis period as the repayment of the regular credits can be affected for various
reasons, industry wise impact of the crisis, recession, opportunist borrowers etc. It is
likely to occur in the asset quality, the bank and NBFIs to finance or invest businesses
without applying more Credit Risk Management tools in the changed scenario. It may
create havoc in the industry with a rush to get finances irrationally. Businesses who are
not in need or who have the power to get it, will get it and not be able to repay in
time, like usual. Other than the wilful defaulter, the regular customer will not be able
to repay the loan despite their good intension, due to the impact of COVID-19 on their
respective business.

2. Decrease in overall net income and profitability:

As the crisis is going to hit the asset side of the financial institutions, it is obvious that
it will create a decrease in the Net Income and Profitability. No financial institution
shall be immune to this fact. Besides, previously imposed regulatory bar for the interest
rate will also have adverse effects. Cost of fund is going to be high and the spread would
go down, other contingency income will also be very limited.

3. Asset liability mismatch or gap in net cash flow as liquidity crisis:

There shall be a terrible gap between asset and liability products duration and maturity.
As the asset products are long term based and the liability products are generally short
term, in this crisis period, it would be very uncertain from the depositor's point of view.
Many retail depositors shall liquidate their deposit if the crisis remains.

4. Equity/ Capital erosion as an impact of decrease in net income:

Page | 14
 Name: Robiul Awal, ID: 163431040

Dividend sustainability of a financial institution essentially comes down to two things:

net income and capital adequacy. They need a certain level of capital to remain well
capitalised and a certain level of net income to maintain dividend payments. Credit
losses can eat away at capital levels, presenting a severe risk to dividend sustainability.
If capital is depleted the FI will need to use its net income to rebuild capital, potentially
putting dividend sustainability at risk. Net income is used to fund the dividends, so
lower-income, even without credit losses, also puts a strain on funding the dividend. If
the FI suffers lower net income and big hits to capital levels, it will create a double
strain because it has to use a more limited net income stream to first fund its capital and
there isn't as much left over for a dividend. Any dividend pay-out that exceeds net
income will reduce capital over time.

2.6Various types of steps taken by Bangladesh Government for stability of economic growth:

 Credit Risk. No one yet knows the financial ramifications of the coronavirus on the global
economy. Nonetheless, financial institutions should begin to discuss and review their portfolios to
quantify potential credit risk in applicable customer, industry and geographic segments. For
instance, the coronavirus is being reported as having a disastrous impact on the tourism, travel,
transportation and hospitality/restaurant industries. Further, we know that, at this time, the largest
geographic impact of the coronavirus has been in China and Southeast Asia. Customers with a
greater exposure to these markets (e.g., manufacturing companies with Chinese or Southeast Asia
supply-chain dependence) or which operate in the industries identified above may have additional
risk going forward.
 Review of the Business Continuity Plan. Given the potential risks associated with the coronavirus
– such as credit risks, risks to employees and cybersecurity risks as noted below – senior
management should take this opportunity to review their business continuity plan and determine
if any updates should be made to the plan to better address these risks.
Although the coronavirus has not, to date, been identified as a “pandemic” by the Centers for
Disease Control and Prevention and, as noted above, the Federal Bank Regulators have not
provided specific guidance, both the Director of the CFPB and the Chair of the FDIC, during
separate public appearances, suggested that financial institutions review the FFIEC’s guidance on
how to address pandemic planning (“Pandemic Planning Guidance”) when determining if their
business continuity plan requires any updates. Under the Pandemic Planning Guidance, the FFIEC
recommends that a business continuity plan include: (i) a preventive program to reduce the
likelihood an institution’s operations will be significantly affected by a pandemic event; (ii) a
documented strategy that provides for scaling pandemic efforts commensurate with the particular
stages of a pandemic outbreak; (iii) a comprehensive framework of facilities, systems or
Page | 15
 Name: Robiul Awal, ID: 163431040

procedures to continue critical operations if large numbers of staff members are unavailable for
prolonged periods; (iv) a testing program to ensure the institution’s pandemic planning practices
and capabilities are effective and will allow critical operations to continue; and (v) an oversight
program to ensure ongoing review and updates to the pandemic plan. As a result, senior
management should review and discuss the foregoing considerations and determine their relevance
when considering if any changes should be made to their business continuity plan to address
potential issues resulting from the spread of the coronavirus.
 Federal Reserve Interest Rate Cuts. On March 3, 2020, the Federal Reserve announced an
emergency interest rate cut of 50 basis points. This was the first time since 2008 that the Federal
Reserve cut rates outside of its regularly scheduled meetings. With cuts to interest rates, financial
institutions will likely face new pressures on their net interest margin. However, while lower
interest rates tend to create margin pressure, lower interest rates can also increase demand for
loans. It is important to remember that the rate cut comes in an environment where consumer
confidence is strong. At this time, the market needs to digest the emergency move by the Federal
Reserve. During the coming months, senior management should continue to monitor the situation
and consider what impact any future rate cuts may have on their current strategy.
 Employees. As is reported, the coronavirus spreads through person-to-person contact. To mitigate
risks to employees, financial institutions may consider limiting unnecessary business travel,
actively encouraging ill employees to stay home and providing employees flexible work-from-
home options. Strategies to mitigate employee-related risk is ultimately institution-specific.
However, at a minimum, senior management should consider all available options.
 Information Systems/Cybersecurity. To the extent a financial institution wishes to utilize an
increased digital strategy, including, but not limited to, flexible work-from-home arrangements for
employees or directing customers to the institution’s website and digital product/servicing
offerings, a financial institution may need to update its employee and cybersecurity policies and
procedures to accommodate an increased reliance on the institution’s digital platform. In updating
any employee policy for flexible work-from-home arrangements, specific attention should be paid
to use of office equipment, taking confidential documentation offsite and use of public Wi-Fi.
 Capital Markets. As was evident during the financial crisis, financial institutions have in the past
found it difficult to raise additional capital in times of economic and market uncertainty. Senior
management may want to consider the extent to which they may need or want to raise additional
capital and/or issue debt in the near term as a defensive measure in light of the uncertainty around
the potential adverse economic effects of the coronavirus.
 Consumer Fraud Mitigation. With all crises or natural disasters, in times of distress comes a greater
risk of scams, fraudulent schemes and phishing attempts. Management should ready their
compliance teams to be vigilant in identifying fraudulent activity and targeted scams and
monitoring consumers’ accounts for fraud.

Page | 16
 Name: Robiul Awal, ID: 163431040

3.1Findings & Analysis:

In this assignment I found how financial institutions of Bangladesh contribute the economy of
the country during corona virus pandemic. How government respond this pandemic and what
are the factors that influence a country’s economy. Government and various private financial
institutions work together and try to continue the economy growth of the country. World Bank
and Asian development bank provide loans to the Bangladesh to survive and continuous growth
of the country’s economy.

4.1Recommendation

 Financial institutions should lower interest rate for lending money to the people so that retail
entrepreneur can easily take loans and start their business quickly after pandemic situation.

 Government should remove income tax next 2 years and also reduce corporate so that industries can
survive

 Government should take various infrastructure to stay growth of economy during pandemic

4.2 conclusion

The financial system of Bangladesh is comprised of three broad fragmented sectors:

1. Formal Sector,
2. Semi-Formal Sector,
3. Informal Sector.

The sectors have been categorized in accordance with their degree of regulation.
The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions
(FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant
Banks etc.

Page | 17
 Name: Robiul Awal, ID: 163431040

The semi formal sector includes those institutions which are regulated otherwise but do not fall
under the jurisdiction of Central Bank, Insurance Authority, Securities and Exchange Commission
or any other enacted financial regulator. This sector is mainly represented by Specialized Financial
Institutions like House Building Finance Corporation (HBFC), Palli Karma Sahayak Foundation
(PKSF), Samabay Bank, Grameen Bank etc., Non-Governmental Organizations (NGOs and
discrete government

The informal sector includes private intermediaries which are completely unregulated

Page | 18