An Overview of Financial Systems in

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

• Formal Sector.
• Semi-Formal Sector.
• Informal Sector.
Financial Markets: Financial market is a market
where financial securities are traded.

 Money Market
 Taka Treasury Bond market
 Capital market
 Foreign Exchange Market

Financial market in Bangladesh

essentially consists of banks and non-
bank financial institutions and capital
market.
Regulators of the Financial System
Bangladesh Bank acts as the Central Bank of Bangladesh which was established on December 16, 1971 and The main functions of BB are (Section 7A of BB Order, 1972).

 Monetary policy  Deposit Insurance

 Reserve Management  Insurance Authority
Strategy  Regulator of Capital
 Interest Rate Policy Market Intermediaries
 Capital Adequacy for  Regulator of Micro
Banks and FIs Finance Institutions
Banks
Scheduled Banks(61):
The banks that remain in the
list of banks maintained under
the Bangladesh Bank Order,
1972 and operate Bangladesh
Bank Order, 1972 and Bank
Company Act, 1991.
1.SOCBs 6 2.SDBs 3
3.PCBs 43
4. Conventional PCBs 33
5.FCBs 9 6.Islami Shariah
PCBs 10
Non-Scheduled Banks(5):
The banks which are established
for special and definite objective
and operate under any act but are
not Scheduled Banks. These
banks cannot perform all
functions of scheduled banks.
1.Ansar VDP Unnayan Bank
2.Karmashangosthan Bank
3.Grameen Bank
4.Jubilee Bank
5.Palli Sanchay Bank.
FIs
Non Bank Financial Institutions (FIs) which are regulated under
Financial Institution Act, 1993 and controlled by Bangladesh Bank.

 2 is fully government owned

 1 is the subsidiary of a SOCB
 19 were initiated by private domestic initiative
 13 were initiated by joint venture initiative
Capital Market

Capital market is a financial markets in which long term securities

are traded. Capital market intermediaries are of following types:
Stock Exchanges
Central Depository
Stock Dealer/Sock Broker
Merchant Banker & Portfolio Manager
Asset Management Companies (AMCs)
Credit Rating Companies (CRCs)
Trustees/Custodians
Investment Corporation of Bangladesh (ICB)
The Bangladesh Securities and Exchange Commission
(BSEC)
It was established on 8th June, 1993 as the regulator of the
country’s capital market under the provision of Bangladesh
Securities and Exchange Commission Act 1993.

 Dhaka Stock Exchange

 Chittagong Stock Exchange
 Investment Corporation of Bangladesh
Insurance
Insurance is a means of protection from financial loss. It is a form of risk management

18 are Life Insurance Companies including 1 foreign company

and 1 is state-owned company.
44 General Insurance Companies including 1 state-owned
company.
Insurance companies in Bangladesh provide following services:
Life insurance, General Insurance, Reinsurance, Micro-
insurance, Takaful or Islami insurance.
Microfinance
Microfinance is a banking service provided to
unemployed or low-income individuals or
groups who otherwise would have no other
access to financial services
 Nationalized commercial banks and
Specialized banks.
 Specialized government organizations
 Non-Government Organizations (NGOs)
Recent Developments in Financial Sector of Bangladesh

 Automation and Technological Development

 Institutional Development
 Regulatory Development