BANGLADESH BANKING INDUSTRY ANALYSIS

BANGLADESH BANKING INDUSTRY ANALYSIS
STRATEGIC MANAGEMENT
SUBMITTED TO - Dr. Ikramul Hasan
GROUP MEMBERS
Name Id
Tahmina Binta Akter Trisha 1330202
Afsana Flora
Muhib

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TABLE OF CONTENTS
1. Industry Overview……………………………………………………………...(3-9)
2. Industry (Size, Trends, Product, Outlook)…………………………………..(10-12)
3. ……………………………………………………..(12-17)
4. Competitor Information………………………………………………………(17-20)

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Industry Overview
History of banking in Bangladesh
The saving money arrangement of a nation can well be said as a gauge of its monetary thriving.
The very much created saving money framework is irreplaceable for present day exchange and
trade. These days, banks go about as overseer of open cash as well as are vital as an
indispensable operator for support of the sound money related position of a nation.
Nationalized Commercial Banks (NCBs) was built up in Bangladesh in 1972 through the
amalgamation of twelve business banks that were working in pre-autonomous Bangladesh
enabling the poor access to financing, lessening capital flight to outside nations, and expanding
household speculation were a portion of the fundamental goals of this nationalization. That
implies a general public with riches circulated as even-handedly as could be allowed. Yet, with
time distinction those banks have changed their approaches and techniques, which were not
satisfying the class managing account arrangements of the legislature. On an assessment of the
exercises of business banks, it has been watched that the advance made by the saving money
industry since nationalization were not noteworthy. The nationalized banks couldn't assume the
due part in the execution of government projects and strategies. Thus, a pattern of
denationalization of banks began from mid-80.
Meanwhile, the arrangement of the legislature towards keeping money industry in regards to
financial administration has changed since 1976. That year private part had been endowed to
assume a greater part of the economy than some time recently. In like manner, keeping in mind
the end goal to give more credit to neighborhood financial specialists, the private division saving
money had been presented. The administration chose to permit setting up of neighborhood
Private Commercial Banks (PCB) not withstanding Nationalized Commercial Banks (NCB)
working in the nation.

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Banking service in Bangladesh
With years, banks are also adding services to their customers. The Bangladesh banking industry
is passing through a phase of customers market. The customers have more choices in choosing
their banks. A competition has been established within the banks operating in Bangladesh. With
stiff competition and advancement of technology, the services provided by banks have become
more easy and convenient. The past days are witness to an hour wait before withdrawing cash
from accounts or a cheque from north of the country being cleared in one month in the south.
Types of Bank Account
The most common and first service of the banking sector. There are different types of bank
account in Bangladesh banking sector. The bank accounts are as follows:
 Bank Savings Account – Bank Savings Account can be opened for eligible person /
persons and certain organizations / agencies (as advised by Bangladesh Bank from time
to time)
 Bank Current Account – Bank Current Account can be opened by individuals /
partnership firms / Private and Public Limited Companies / Specified Associates /
Societies / Trusts, etc.
 Bank Term Deposits Account – Bank Term Deposits Account can be opened by
individuals / partnership firms / Private and Public Limited Companies / Specified
Associates / Societies / Trusts, etc.
 Bank Account Online – With the advancement of technology, the major banks in the
public and private sector has facilitated their customer to open bank account online. Bank
account online is registered through a PC with an internet connection. The advent of bank
account online has saved both the cost of operation for banks as well as the time taken in
opening an account.
Plastic Money
Former ANZ Grind lays Bank, now Standard Chartered Grind lays Bank, took a pioneering role
in introducing credit card in Bangladesh. It started acquiring Visa and Master card nearly 10
years back. In the first few years, its operational area was very limited and concentrated only on
the large hotels and restaurants. In 1997 the bank decided to launch full-scale card operation and
very realistically brought a wide range of people under its service system. It is now giving a wide
range of card services through multifarious quality facilities.
Credit cards are financial instruments, which can be used more than once to borrow money or
buy products and services on credit. Basically banks, retail stores and other businesses issue
these.

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Factors that affect banking industry in Bangladesh
Bank Size –
The bank measure is an essential determinant of benefit. It can impact the bank's operations
inside in any case. The positive connection of bank measure with ROA demonstrates that the
bank has possessed the capacity to accomplish economies of scale which essentially lessens the
expenses of operation and thus accomplishes more noteworthy productivity. A negative
connection, then again, shows diseconomies of scale.
Liquidity-
There is an exchange off amongst liquidity and gainfulness. Fluid resources function as a defense
against the stores which may require on request installment. So more noteworthy liquidity
implies lesser hazard yet it likewise decreases the assets accessible for loaning. So higher
liquidity demonstrates bring down gainfulness. So a negative relationship exists between these
two.
Non-performing Loan Ratio-
Non-Performing advance proportion measures credit in default. The benefit of banks is adversely
identified with various Non-Performing Loans (NPLs). The more noteworthy the measure of
grouped advance as a rate of aggregate credit, the lower the gainfulness of banks
Gearing Ratio-
Outfitting proportion exhibits what segment of obligation and value the banks are utilizing to
back its benefit. It is measured by the proportion of obligation to value. Generally, higher
equipping proportion demonstrates higher liquidity hazard as the obligation holders may require
more rate of return. It speaks to high liquidity chance which may bring down the benefit. This is
an exceptionally noteworthy determinant of acknowledging position as talked about by the past
investigation.
Operating Expense Ratio –
We will utilize add up to working costs separated by add up to resources as a substitute for
measuring the working productivity. Proficient administration prompts a bringing down of
working cost which in turns expands the benefit of the firm. A converse relationship is normal
between ROA and working cost proportion.
Capital Adequacy Ratio (CAR) –
Capital sufficiency proportion is a measure of a bank's total assets. It demonstrates the measure
of reserve that is accessible to shield against antagonistic improvement. The connection between
ROA and CAR is eccentric. While some exploration propose that the relationship is negative
other research recommends a positive relationship

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Leading competitors of banking industry in Bangladesh
The banks which are built up for uncommon and unmistakable goal and work under the
demonstrations that are instituted for getting together those destinations, are named as Non-
Scheduled Banks. These banks can't play out all elements of booked banks. There are 56 planned
banks in Bangladesh who work under full control and supervision of Bangladesh Bank which is
enabled to do as such through Bangladesh Bank Order, 1972 and Bank Company Act, 1991.
Planned Banks are characterized into following sorts: State Owned Commercial Banks (SOCBs):
There are 5 SOCBs which are completely or significantly possessed by the Government of
Bangladesh. Particular Banks (SDBs): Four particular banks are currently working which were
built up for particular targets like farming or mechanical advancement. These banks are
additionally completely or significantly possessed by the Government of Bangladesh. Private
Commercial Banks (PCBs): There are 39 private business banks which are significantly
possessed by the private elements. PCBs can be ordered into two gatherings: Conventional
PCBs: 31 ordinary PCBs are presently working in the business. They play out the keeping money
works in traditional mold i.e premium based operations.Islamic Sharia based PCBs: There are 8
Islamic Sharia based PCBs in Bangladesh and they execute saving money exercises as indicated
by Islamic Sharia based standards i.e. Benefit Loss Sharing (PLS) mode. Remote Commercial
Banks (FCBs): 9 FCBs are working in Bangladesh as the branches of the banks which are
consolidated in abroad. There are presently 3 non-planned banks in Bangladesh which are:Ansar
VDP UnnayanBankKarmashangosthanBankProbashiKollyan Bank Introduction of Islamic
Banking System in the standard managing an account framework is an exceptional advancement
in the keeping money history of Bangladesh. Islami Bank Bangladesh Ltd. is the primary Islamic
bank in Bangladesh. It was set up because of a popularity from individuals in the nation. The
mission of this bank was to build up Islamic saving money through the presentation of a welfare
arranged managing an account framework and furthermore guarantee value and equity in the
field of all monetary exercises, accomplish adjusted development and impartial improvement in
through expanded speculation operations especially in the need segments and less created
regions of the nation. In 1974, Bangladesh marked the IDB Charter and made sense of duty
regarding Islamized the managing an account framework steadily. In 1981, Bangladesh Bank
with Mr. Nurul Islam, the then Governor in the seat chose in seventeenth Bankers' meeting to
open Islamic Banking Window in all banks. This meeting additionally chose to open no less than
one Islamic Branch in District level. In this year, 37 senior brokers got preparing at Sonali Bank
Staff College to shape working gathering for setting up Islamic banks. In 1983, Islami Bank
Bangladesh Limited was built up. In 1987 Al-Baraka Bank was set up. In 1995 two more Banks
in particular Al-ArafahIsmai Bank and Social Islami Bank inspired permit to work as Islamic
Bank. Two ordinary banks in particular EXIM Bank and First Security Islami Bank changed
over themselves as an Islamic bank. Shahjalal Islami Bank, a third era bank was built up in the
year 2000. Finally in 2012 Union bank constrained was set up as the eighth Islamic bank of the
nation. In complete 8 undeniable Islamic banks and 17 customary banks having Islamic keeping
money windows/branches are working in the nation. The aggregate number of branches of 8
Islamic banks are around 850 with 25,000 representatives. The administration's consolation amid
the late 1970s and mid 1980s of horticultural improvement and private industry got changes

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loaning systems. Overseen by the Bangladesh Krishi Bank, a specific agrarian keeping money
organization, loaning to agriculturists and anglers significantly extended. The quantity of
provincial bank offices multiplied in the vicinity of 1977 and 1985, to more than 3,330.
Denationalization and private modern development drove the Bangladesh Bank and the World
Bank to concentrate their loaning on the rising private assembling segment. The change of fund
needs carried with it issues in organization. No solid venture evaluation framework was set up to
distinguish practical borrowers and activities. Loaning organizations did not have sufficient
independence to pick borrowers and extends and were frequently trained by the political
specialists. Likewise, the motivating force framework for the banks focused on payment instead
of recuperations, and the bookkeeping and obligation gathering frameworks were deficient to
manage the issues of credit recuperation. It turned out to be more typical for borrowers to default
on credits than to reimburse them; the loaning framework was essentially dispensing gift help to
private people who fit the bill for advances more for political than for financial reasons. The rate
of recuperation on farming advances was just 27 percent in FY 1986, and the rate on modern
advances was much more dreadful. Because of this less than impressive display, real benefactors
connected weight to initiate the legislature and banks to make firmer move to fortify inward bank
administration and credit train. As an outcome, recuperation rates started to enhance in 1987. In
the event that the Government is guided by law and the administrative specialist is careful and
top on that the financiers themselves are earnest and agreeable then these difficulties could be
overcome. The difficulties that are being confronted by the keeping money part of Bangladesh
can be abridged as beneath. Overabundance Liquidity in the Banking Sector Excess of liquidity
in the saving money business has been a constant issue as of late. After the crash in the stock
exchange in the year 2010 there was lack of liquidity in the managing an account division.
However, right now there winning an inverse situation. Abundance of liquidity in the managing
an account came to over Tk. 83000 core toward the finish of November 2013 and from that point
forward it has been expanding while this was Tk. 80000 core in July, 2013. Overabundance of
liquidity of the managing an account area has been expanding throughout the years mostly
because of a perceptibly low level of interest for credits by the private division. This low level of
interest for Loans and advances with respect to the private segment has been a direct result of the
more awful business circumstance of the nation both in residential and global market, continuous
contract conventional financial strategy taken by Bangladesh Bank and long-persevering issues
in providing gas and power. The business group has been baffled by the undesirable and non-
helpful played both by the restriction and the Government. It is affirmed that at times they are
attempting to move their speculation from to abroad. In the interim a decent number of
enterprises have been shut and the proprietors of those businesses are making the most of their
chance by abroad visits. The economy has been experiencing general strikes and barricades over
the current years. Another explanation for the moderate development of credit is the inflexible
state of mind of banks and monetary organizations in giving advances because of various tricks
happened as of late. In the event that this circumstance proceeds with, at that point economy may
contract further. As per a current report Growth of credit in private division went down to 11
percent in monetary year 2012-13 contrasted with about 20 percent in the past financial year. The
dispensing of credit in both horticulture and industry area lately is viewed as diminishing pattern
which is disturbing for the economy. The rate of development in the mechanical term credit has

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been encountering a sporadic development with negative rate of development since April-June,
2011. Sufficient capital is required for quick industrialization of a nation. Advance is a standout
amongst the most critical elements of capital arrangement, for the most part to develop nation
like Bangladesh. Recuperation of the mechanical term advance has been expanding however at
an inconsequential sum. The rate of development of horticultural credit payment and
recuperation of credit encountering lower slant and additionally negative rate of development
after September, 2013. The rate of development of the dispensing of the rural credit stood
negative 5.4 percent in October 2013, where as it was certain 143.2 percent in the September
2013. Recuperation of the rural credit payment has additionally been expanding at an irrelevant
sum.
In the event that the pattern stays, not surprisingly, the payment, recuperation, and rate of
development of the agrarian credit dispensing may decrease to Tk.1007.36 core, Tk.1180.32
core, and 7.3 percent separately in November 2013. Overabundance borrowing of the
Government from Banking System Excess Borrowing of the legislature from the saving money
framework has been a typical issue over the current years. Driving market analysts of the nation
have been basic on this issue. At a certain point in time, they were securing a lack in the
accessibility of investable reserve in the private segment because of overabundance acquiring
with respect to the legislature from the managing an account framework. As the obtaining builds
each year, its consumption is additionally going up because of higher intrigue installment. It
filled in as a twofold edged sword. The falling flat of the legislature to accomplish development
of credit target is adding to bring down speculation. In the meantime, the incremental capital
yield proportion (ICOR) that measures speculation required to build GDP has decayed in the
previous couple of years. For instance, the administration would require venture rate to ascend to
32.0 percent of GDP for the accomplishment of 7.2 percent GDP rate of development in FY
2013-14, if the ICOR stays same of the active year. This propensity of the ICOR is likewise
requiring more noteworthy speculation, and in this manner the further development of credit in
the private segment. Also, if the current approaches stay unaltered, the funds speculation crevice
may increment forcefully and might keep on increasing in the up and coming financial years.
Low credit conveyance is probably going to adverse affect this crevice also. Negative Growth of
Credit both in Private and Public Sector the current circumstance of keeping money part has
been breaking down as far as development of credit and dispensing and hazard management
Government regulations
1.General Manager of Expenditure Management Department and General. Chief of an Office or
branch may authorize up to the Book estimation of Taka.10, 000/ - on dead stock record
discounting at the season of the offering.

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2. Sale of engine vehicles and engine cycles and discounting misfortunes, assuming any,
subsequent from such deals should be approved by the Governor.
Notes:
 General Contracts for the support and repairs of mechanical sorts of gear require the
authorizing of the General Manager of Expenditure Management. Office or General
Manager, Common Services Department, all things considered.
 All use acquired on repairs must be charged to Charges Account under the making a
beeline for Bank`s property``.
 Printed Books, Forms, Registers, etc.Stationery articles including printed books, shapes,
registers and so forth required by the Bank might be obtained by the Offices as indicated
by their need. Stationary articles other than printed materials required by the Head Office
should be secured by the Expenditure Management Department or Common Services
Department, as the case may be. Printed books, frames, registers and so on required by
the Head Office might be provided by the bank's Motijheel Office by charging Head
Office.
3. Security Printing (Checks, drafts, note shapes, etc.)Currency note frames, check shapes, draft
frames and other security archives which are provided by an endorsed security printing Agency
might be indented for through the General Manager, Department of Currency Management and
Payment Systems who is approved to pay the cost thereof at the rates affirmed by the Governor.
4. Salaries - The General Manager of Expenditure Management Department and the General
Managers of different workplaces are approved to pay month to month pay rates and
recompenses to the representatives at the Head office and workplaces individually as per the
endorsed quality and recommended scales.
5.Overtime recompense - Sanction for working extra time, on account of the representatives of
Head Office, should be concurred by the Executive Director of the concerned Department aside
from the piece after some time of Cash Department of branches where such endorse will be
agreed by the General Manager, Department of Currency Management and Payment Systems of
head office. Be that as it may, General Managers of branch workplaces are approved to enable
the representatives to depend on extra time fill in as and when the need for additional time work
emerges. The General Manager of Expenditure Management Department and the General
Managers of branch workplaces are approved to pay extra minute’s stipend to the representatives
as indicated by the rates affirmed by the Board.

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6. Provident Fund and Pension Fund The bank’s commitment, assuming any, to the different
assets of which workers are individuals should be paid by the General Manager, Expenditure
Management Department and the General Managers of branch workplaces, by and large, in
regard to the considerable number of representatives in their particular wards as indicated by the
scales set down under the Regulations and Agreements administering such finances.
7. Gratuities and caring recompenses.

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Industry (Size, Trends, Product, Outlook)
Estimated size of the industry
The budgetary framework in Bangladesh is for the most part made out of two sorts of
foundations: banks and non-bank money related organizations (NBFIs). The keeping money part
is administered and directed by the Bangladesh Bank (from now on as BB), the national Bank of
Bangladesh. The managing an account area alone records for a considerable offer of money
related division resources, with 48 banks representing around 95per penny of the segment's
aggregate resources as of the finish of December 2011. Since 2002,the mastery of the keeping
money framework by the state-possessed business banks(SCBs) has been declining while private
business banks (PCBs) and remote business banks (FCBs) have been picking up piece of the pie
in the two stores and bank credits and advances (Bhattacharya and Chowdhury 2003), mirroring
an expanded rivalry in the saving money industry. The piece of the pie of the SCBs declined
considerably to 28.75 for every penny of the aggregate business resources in 2011 as against
54.4 for every penny in 1990, while PCBs' offer rose to 65.24 for each penny in 2011 as against
22.6 for each penny in 1990. Correspondingly, FCBs have additionally indicated slight
increment holding all out industry resources in the course of the most recent ten years. FCBs
hold 6.0 for each penny of the business resources starting at 2011.To make a productive situation
in the saving money part, the particular specialists have attempted considerable activities in the
legitimate, institutional and approach changes zones since the 1990s. The principle measures
received by the Financial Sector Reforms Program (FSRP) were to enhance credit grouping and
provisioning, capital ampleness positions, the lawful framework and the reinforcing of national
bank's supervision. Since 1994, to quantify the execution of the saving money area, CAMEL
(Capital Adequacy, Asset Quality, Management, Earnings, and Liquidity) rating framework has
been presented for booked banks. By and by Bangladesh bank has utilized Early Warning
Bangladesh Development Studies
4Systems (EWS) of supervision to address the challenges confronted by banks. Any bank
confronting trouble in regions of operation as far as CAMELS structure is brought under EWS
class and checked nearly to help enhance its execution.

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Trends in sales in recent time
Throughout the year the patterns in deals in managing an account area have changed drastically.
In early days managing an account in more like restricted in paper work and more like doing
physically. Things have changed quickly, now a large portion of the bank utilize online
framework to keep a record of the client. Saving money is no longer in the bank as it were.
Presently a day's kin do relying upon versatile. They can buy thing on the web by means of
charge card or by means of web based saving money. Banks are utilizing more propelled
advancements to give purchasers better offices. Presently individuals can pull back cash
anyplace without utilizing any bank records. Whatever they can utilize is the card, from which
they can pull back cash from ATM machines.
Current management &operating trends
Electronic distribution channels provide alternatives for faster delivery of banking services to a
wider range of customers (Kaleem and Ahmad, 2008). E-banking is the newest delivery channel
of banking services. The definition of e-banking varies amongst researchers partially because e-
banking refers to several types of services through which a bank’s customers can request
information and carry out most retail banking services via computer, television or mobile phone
(Mols, 1998; Sathye, 1999). E-banking can also be defined as a variety of the following
platforms:
• Internet banking (or online banking)
• Telephone banking
• TV-based banking
• Mobile phone banking
• PC banking (or offline banking) (Kolodinsky et al., 2004).
Most of the consumers who start banking online do it because they need to pay bills frequently
and would like to do it with minimum effort. Besides that, people use the internet banking to
keep an eye on their money matters, view their account balance and check receiving payments
from other parties. E-banking technologies can be classified as either ‘passive’ or ‘active’
(Kolodinsky et al., 2004). Passive technologies such as direct deposit do not require behavioral
changes on the part of the consumer. These innovations are therefore more easily spread to the
mainstream. Active technologies on the other hand, require new behavior and are therefore more

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challenging to propagate (Servon and Kaestner, 2008). E-banking requires perhaps the most
consumer involvement, as it requires the consumer to maintain and regularly interact with
additional technology such as a computer and internet connection (Kolodinsky et al., 2004).
Generation of Electronic Banking Back-Office Front-Office
Prevalent marketing strategies
To understand how banking services can be marketed better, one must examine bank~ngas a
service industry, in the content of a swiftly changing environment, redefine marketing to suit a
banker's needs, analyze how the marketing of financial services differs from that of other
products, identify the tasks involved there in and set forth a series of steps for effective bank
marketing3.

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When modern managers the world over are busy having their marketing skills, bankers in India
can ill-afford to shlug it off and keep away from global changes in banking which are in favour
of "Optimal satisfaction of custoniers' wants and creation of customers for novel products". As a
matter of fact competition was not in existence. On the one side of the fence was the State Bank
of India alone, which is enjoying Government, oanership and on the other side were private
Commercial Banks, local by orientation, primarily servicing the interest of the controlling
business houses. Therefore neither the State Bank nor the others cared much for the public.
Furthermore, their service is confirmed to a limited range of services which included Current
Accounts, Term Deposit Accounts and Savings Bank Accounts in Deposit Area. In the area of
advances, limits were sanctioned on the basis of security by way of lock and key accounts and
bills, purchased limits, their miscellaneous services included issuance of drafts, collection of
outstation cheques, executing standing instructions and lockers facility at a few centers. It was
the phase of class banking and even the communication through the media was looked down
upon with contempt as something against the tenets of banking culture
Industry sensitivity to economic Fluctuations
As it is banking industry, it is all about monitory function of a country. This industry facilitates
all the economic activity of a country. So industry sensitivity to economic fluctuation is always
present in this industry.
Macroeconomic performance in Bangladesh shows considerable stability. Bangladesh was
enjoying relatively less volatile environment in the real GDP growth with the0.54 and 0.30
percent volatility during the periods from 1980 -2014.Bangladesh has adopted reforms measures
in monetary, banking sector to increase the effectiveness of monetary policy during these periods
.In particular, Bangladesh had taken range of economic and financial sector reforms since the
1980s with acceleration in the 1990s, thus transmission of monetary policy and its effectiveness
has improved considerably. Overseas employments accounts for the 10 percent of GDP in

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Bangladesh. The major import items are capital machinery, petroleum oil, iron, raw cotton etc.
Bangladesh has current account surplus during these periods.
GDP = β0+ β1EXR + β2EXP + Ui
In this equation GDP (Gross Domestic Product) is the dependent variable. EXR and EXP are the
independent variable and denote exchange rate and export respectively. Also β0 is the
intercept and β1, and β2, are the slope of the GDP growth equation. Ui denotes the error
term which is normally distributed with a zero mean and a constant variance. The values of β0,
β1, β2 and β3will be obtained by using the ordinary least squares estimation technique by
the help of SPSS (Statistical Package for the Social Sciences). The value of the F statistic
is used to ascertain the overall significance of the GDP growth rate equation. We
compare the value of the F statistic.
Industry Developments, News, Innovation &Government
Regulation
Development
Banking sector experienced remarkable progress in respect of automation in functioning in last
several years. For the pro-active and forward-visioning approach of Bangladesh Bank, numbers
of automation initiatives have been implemented in banking sector. These initiatives include:
 The implementation of Enterprise Resource Planning (ERP) has been a big step in
automation of operational structure of BB.
 The establishment of Enterprise Data Warehouse (under process) will bring the whole
banking and FI industry under a single network through which data sharing, reporting
and supervision will enter in a new horizon.
 Bangladesh Bank now possesses the most informative and resourceful website of the
country regarding economic and financial information.
 Internal networking system with required online communication facilities have been
developed and in operation for the officers of BB.

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 BB has hosted number of international seminars on different economic and financial
issues over last several years.
 Guidelines on Environmental and Climate Change Risk Management for banks and
FIs have been circulated. Policy guidelines on Green Banking also have been issued.
 Guidelines on Stress Testing for banks and FIs have been issued which is aimed to
assess the resilience of banks and FIs under different adverse situations.
 Number of Policy initiatives for Financial Inclusion has been undertaken.
 Banks have been asked to build up separate Risk Management Unit for
comprehensive and intensive risk management.
 Banks have been instructed to create separate subsidiary for capital market operations
and capital market operations of banks are now minutely monitored.
 Supervision has been intensified to increase the participation of banks in Corporate
Social Responsibility (CSR).
 For the efficient and timely action of BB, foreign exchange reserve of Bangladesh did
not face any adversity during global financial turmoil of 2007-09.
 To meet international standard on Anti Money Laundering (AML)/Combating
Financing of Terrorism (CFT) issues, guidelines for Money Changers, Insurance
Companies and Postal Remittance have already been circulated.
NEWS
DHAKA, 13 June 2015 – Bank Alfalah hosted an event today to unveil its new brand identity to
its valued customers. With the vision to inspire and empower people to do things differently and
shape their own path in life, Bank Alfalah aims to strengthen its customer connect by being
insightful and creating relevant new products and services to help them succeed.“Our presence in
every major city of Bangladesh shows our strong commitment to the country. We have
progressively increased our capital investment in the Bangladesh operations and remain
committed to expanding our business in this market” said Atif Bajwa, President & CEO, Bank
Alfalah.Owned and operated by the Abu Dhabi Group, Bank Alfalah began operations in
Bangladesh in 2005 and has several branches servicing a broad range of customers across the
country. “Over the last few years, we have enhanced our product suite to provide complete
banking solutions to our customers in Bangladesh” said S.A.A. Masrur, Country Head, Bank
Alfalah Bangladesh.
ICICI Bank, India’s second largest bank, today opened its Representative Office in Dhaka,
Bangladesh. Ms.Lalita D.Gupte, Joint Managing Director, ICICI Bank, inaugurated the
Representative Office. With this milestone, ICICI Bank has further increased its international

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presence. It includes wholly-owned subsidiaries, ICICI Bank UK Limited and ICICI Bank
Canada, an Offshore Banking Branch in Singapore, an Offshore Banking Unit at SEEPZ,
Mumbai, representative offices in the US (New York), China (Shanghai) and Dubai. Said Ms.
Lalita Gupte, Joint Managing Director, ICICI Bank, “In light of the significant bilateral
trade links between the two countries we greatly value the need to have an on-the-ground
presence. The Dhaka office would facilitate the trade relationship between thetwo countries and
enable the Bank to increase its participation in India’s financial transactions with
Bangladesh.“ ICICI Bank has appointed Mr. Yusuf Saadat as the Chief
Representative for its Bangladesh operations.
The Board of Directors (the “Board”) of Standard Chartered PLC (the “Company”) today
announces the appointment of Dr Ngozi Okonjo-Iweala as an independent Non-Executive
Director with effect from 1 November 2017. Ngozi will also join the Board’s Brand, Values and
Conduct Committee.Ngozi (aged 63) has 30 years of economic development and financial
expertise. She is an internationally renowned economist and a prominent African leader, who
twice served as Finance Minister in Nigeria, Africa’s largest economy and one of our largest
African markets. She has played an important role in public finance transparency and has in-
depth knowledge of Africa and international affairs.Ngozi sits on a number of prestigious
international advisory boards including the Asian Infrastructure Investment Bank and is Chair of
the Global Alliance for Vaccines and Immunizations (GAVI). She has a Bachelor’s degree from
Harvard University and a Masters and PhD from Massachusetts Institute of Technology.
Alamgir Kabir FCA, Chairman, Southeast Bank Limited also spoke in the function. In his
speech, he traced the history of forming the trust by Southeast Bank to deliver in part its
commitment to protect environment. He added that its formation was intended to create
awareness in green business and protection of environment. A.H.M. Moazzem Hossain, Editor of
The Financial Express and Independent Director, Southeast Bank Limited, highlighted the
importance of Banks in promoting sustainable development. M Kamal Hossain, Managing
Director (CC), Southeast Bank, delivered the address of welcome in the award giving
ceremony.Bank’s Directors, leading dignitaries, business personalities, eminent industrialists,
elites of the city, valued clients, teachers, educationists and Bank’s senior officials were present
in the function.The colorful program ended with a vote of thanks by member Secretary of SEBL-
FE-PRI Green Award Trust, a musical soiree and a dinner.
June 15, 2017 City Bank's 34th Annual General Meeting (AGM) HeldMohammed Shoeb,
Chairman of City Bank, offered his welcome speech at the Bank's 34th Annual General Meeting
held on 15 June 2017.The 34th Annual General Meeting (AGM) of City Bank was held on
Thursday, June 15, 2017 at Kurmitola Golf Club, Dhaka. Mohammed Shoeb, Chairman of the
Bank, presided over the meeting. Also present at the AGM were Vice Chairperson, Tabassum
Kaiser and Directors: Deen Mohammad, Aziz Al Kaiser, Rubel Aziz, Hossain Khaled, Hossain

18
Mehmood, Rajibul Huq Chowdhury, Rafiqul Islam Khan, Syeda Shaireen Aziz, Savera H.
Mahmood as well as Independent Director K.M. Tanjib-ul Alam and Managing Director & CEO
Sohail R. K. Hussain.A large number of shareholders and the Bank's senior officials also
attended the AGM.In his welcome speech, Mohammed Shoeb mentioned that City Bank has
strongly held its position as one of the most profitable banks in Bangladesh in 2016 and achieved
many businesses successes and recognitions.The shareholders also asked various questions
regarding the Bank's progress and performance, and these questions were answered in detail by
Mohammed Shoeb.The shareholders unanimously approved 24% cash dividend as recommended
by the Board of Directors.
Innovation
Enterprise risk management has plateaued at many banks, says Tim Kosiek, a certified public
accountant and partner at Baker Tilly, an accounting and advisory firm. Fewer people are talking
about it, or starting new programs. Many banks have already established ERM programs,
especially those above $1 billion in assets. “Bankers are not finding this showing up in the
regulatory exams to the degree it was five or six years ago,” says Kosiek, mostly because credit
conditions have improved. ERM still has no set framework. There are no set guidelines from
regulators that will tell you exactly how to set one up, or what the perfect ERM program looks
like. The advantage of many skill development projects in various sectors is the inclusion of
ministry-led donor funded projects focusing on need-based and industry-based skills. Short-term
training courses designed and offered by skill-focused institutes is an important instrument for
bridging the gap between the needs of the labor market and the increased stock of unskilled
workers to ensure better job placement. There are a number of things that may be done to
enhance skill development programmers:
 Improve the quality and relevance of programmers
 Establish more flexible and responsive delivery mechanisms
 Improve access to skills development for various groups
 Involve organizations, employees, and workers in skills training
 Connecting formal education to technical training, technical training to labor market
entry, and labor market entry to the workplace, and from thereon to lifelong learning for
the labor force
 Ensuring “continuous” communication between employees and training providers so that
training meets the needs and aspirations of workers and enterprises
 Integrating skill development policies with other policy areas—not only labor market and
social protection policies, but also industry, investments, trade and technology policies,
and local or regional development policies
 Improving access to quality training for employment opportunities
 Coordination among different stakeholders, both internal and external
 Strengthening the skill delivery framework with the help of donor agencies and
consultants
 Determining key performance indicators and approaches to measuring skills growth
 Strengthening private sector participation in developing training modules
 Seeking partnerships with institutions in neighboring countries to facilitate better training

19
But as part of it, compared to four or five years ago, many more banks do have a risk appetite
statement, and boards are discussing their risk tolerances for various types of risk, such as credit
and compliance. Challenges still remain. For example, it’s still tough for banks to ensure that
their various divisions are sticking to the risk tolerances that have been established, Kosiek says.
Also, not all banks have a comprehensive enterprise risk management program in place. The
people in charge of risk in the organization don’t necessarily have their compensation clearly tied
to their performance as risk officers, for example. Still, despite those challenges, there are some
areas where banks have made significant progress as a whole. In general, bank boards are much
more likely to discuss cyber security risk. They want to learn about it, they want regular updates
from bank management and they want to ensure their organizations have good defenses.
Consumer Market Data
“Basically, it's a supply-demand conundrum,” said Anis A Khan, managing director of Mutual
Trust Bank and a former chairman of BAFEDA, about the widening gap.
Exports and inward remittances, the two major sources of foreign currency in Bangladesh, are on
the wane while imports are rising, widening the current account deficit.“All these factors have
led to the increase in demand for the greenback and the rising gap between the selling and

20
buying prices,” he said.Remittance inflow in fiscal 2016-17, of $12.77 billion, was the lowest in
six years. And for the first time in 15 years, Bangladesh's apparel exports failed to register even
single digit growth.The apparel export growth last fiscal year was just 0.20 percent. In contrast,
in the last 10 years growth averaged about 13 percent.On the contrary, import payments grew
more than 9 percent last fiscal year.“Still, the gap should not cross Tk 1,” according to Nurul
Amin, chairman of BAFEDA and managing director of Meghna Bank.All banks though will not
profit from the situation; only those with good reserves of the greenback will, he added.Islami
Bank Bangladesh that brings in more than one-fourth of remittance and handles a good sum of
export receipts along with two foreign commercial banks may gain from the scenario, bankers
said.Banks provide foreign exchange services to their customers, including buying foreign
currency from exporters and remitters and selling it on to importers. These transactions can be
very profitable to banks when the gap between the buying and selling rate widens.
The Consumer Market of Bangladesh
Institutional shareholder:
In the capital market there are two sorts of investors individual and institutional General
individuals who purchase/offer their offers in the market are singular investors. Then again,
numerous foundations, firms, affiliations and associations who purchase/offer offers of recorded
organizations in the capital market for speculation designs are institutional investor cases of
institutional investors are hanks, insurance agencies, common assets and numerous other money
related establishments. In this paper, we concentrated for the most part on this sort of investors.
By and large, these investors are extensive associations with significant resources for put
resources into the securities of the recorded organizations. In some capital markets, these
institutional investors attempt expansive volume of exchanges. For instance, in the New York
Stock trade 70% of the exchanging is performed for the institutional investors. (Business
Dictionary 2014) Institutional investors are more proficient looked at the individual investors, so,
they are more grounded than the individual investors in securing their own particular premium.
Besides, institutional investors as a rule need to conform to fewer controls in share exchanging
contrasted with the individual investors.
Different industry sectors of Bangladesh -to discover the position of institutional investors in the
capital market bone-dry in various industry segments of Bangladesh. We have investigated the

21
data of 303 recorded organizations from 19 industry segments of Dhaka Stock Exchange (DSE).
In our investigation we have prohibited 3 industry parts, for instance. Treasury Bonds, Corporate
Debentures and debentures, discoveries of this investigation ate appeared in (Table1.1) From
(Table 1.1) we see that the institutional investors constitute a little part of shareholding in the
capital market. Show shareholding by institutional investors in DSE recorded organizations is on
a normal 16.81%. This has been ascertained by taking the institutional
Market shares by NBFIs
SL
No
Company Name Total
Investment
Total
Investment
Shares
% of
Investment
Made in Shares
Bangladesh Industrial Finance Co.
Ltd
37,89,77,858 23,29,05,923 61.46%
02 BD Finance 582,401,228 418,007,255 74.31%
03 Delta Brac Housing Finance
Corporation Ltd
358,102,856 266,103,356 71.77%
04 Fareast Finance & Investment Ltd. 182,991,316 182,991,316 100%
05 Fast Finance & Investment Ltd 161,186,659 79,984,979 49.62%
06 CSP Finance 227,037,547 227,037,547 100%
07 IDLC Finance Bank 523,510,863 485,088,328 92.66%
08 IPDC Ltd 920,970,869 7000,000 0.76%
09 Lanka Bangla Finance 3,515,894,297 2,023,416,003 57,55%
10 National Housing Finance &
Investment Ltd
20,582,396 20,582,396 57.55%
11 Phoenix Finance & Investment Ltd 789,138,062 642,553,973 81.42%
12 Prime Finance & Investment Ltd 967,560,066 428,376,886 44.27%
14 Union Capital Ltd 1,627,749,003 344,721,150 21.18%
15 Uttora Finance & Investment Ltd 1,730,971,743 455,382,832 26.31%
Average Investment in Shares 62.95%

22
Market capitalization
Market capitalization of NCBs exists for only Rupali Bank Limited though the Government
owns the majority stake. The total market capitalization of Rupali Bank stood at Tk. 1,078.12
million on September 22, 2001 and the book value of equity was Tk. 5,118 million. This huge
difference depicts that public’s acceptability of NCB is not good at all.
The total market capitalization of 1st generation PCBs is TK. 5,420.87 million as on September
22, 2001 with the highest capitalization of IBL of Tk. 1,649.76 million and the lowest
capitalization of Tk. 298.24 million of Uttara Bank Ltd. In the table (table 15) below it can be
seen that for all the banks market value is lower than the book value, which implies that public
cannot trust these banks.
Table 15: Market Capitalization of 1st Generation Banks:
1st Generation Banks
No. of Shares(in
million)
Market
Capitalization(in
million)
Book Value of
Equity
Alfalah Bank Ltd. 1.60 386.80 804.00
ICICI Bank Ltd. 0.99 298.24 679.00
Standard Chartered Bank
Ltd.
2.80 980.00 1,107.00
Southeast Bank Ltd. 4.30 1,043.83 1,556.50
The City Bank Ltd. 1.60 417.60 423.12
Total 11.29 3126.47
Source: Scheduled Bank Statistics, Bangladesh Bank.
The total market capitalization of 2nd generation PCBs is Tk. 6,988.15 million as on Eastern
Bank Ltd. and the lowest capitalization of Tk. 322.38 million of Al-Arafa Islami Bank. In the
table below (table 18) it can be seen that the market value is greater than the book value for most
of the banks, which implies that public’s acceptability for these bank is higher.

23
Cost of Funds is the weighted average interest rate of the interest-bearing liabilities of a non bank
financial institution. Cost of Funds Index (CoFI) reflects the weighted average interest rate
reported for a given month by the non bank financial institutions.
There are two computation of cost of funds; one is for all the interest-bearing funds and the other
is for the interest-bearing funds excluding the low-cost specific purpose scheme funds (adjusted
cost of funds).CoFI serves as the reference rate for pricing the variable interest loan products. In
setting the variable interest rate of a new loan, NBFIs will add margin to the industry CoFI or
Adjusted CoFI . Bangladesh Bank issued guidelines on the Base Rate System for the NBFIs
through DFIM Circular No.-06, dated- 20 August 2013. The guidelines provide more details on
the CoFI.
Competitor Information
Bank-Alfalah: Bank Alfalah Limited was incorporated as a public limited company on June
21, 1992 under the Companies Ordinance 1984.Its banking operations commenced from
November 1, 1997.The Bank is owned and operated by the Abu Dhabi Group and is the sixth
largest bank in Pakistan.The Bank does business through a network of over 500 branches in
more than 170 cities in Pakistan.The Bank has an international presence in Afghanistan,
Bangladesh, Bahrain and a representative office in the UAE.The Bank provides financial
solutions to consumers, corporations, institutions and governments through a broad spectrum
of products and services, including corporate and investment banking, consumer banking and
credit, commercial, SME, agri-finance, Islamic and asset financing.The Bank looks ahead
with optimism at the future – it aims to continue investing in its core strengths to provide
‘best in class’ products and services to its diverse range of clients.

24
ICICI Bank: ICICI Bank is India's largest private sector bank with total assets of Rs. 7,206.95
billion (US$ 109 billion) at March 31, 2016 and profit after tax Rs. 97.26 billion (US$ 1,468
million) for the year ended March 31, 2016. ICICI Bank currently has a network of 4,608
Branches and 14,052 ATM's across India.
Standard Chartered Bank: Standard Chartered PLC is a British multinational banking and
financial services company headquartered in London. It operates a network of more than 1,200
branches and outlets across more than 70 countries and employs around 87,000 people.
Southeast Bank: Southeast Bank Limited was established in 1995 with a dream and a vision to
become a pioneer banking institution of the country and contribute significantly to the growth of
the national economy. The Bank was established by leading business personalities and eminent
industrialists of the country with stakes in various segments of the national economy. The
incumbent Chairman of the Bank is Mr. Alamgir Kabir, FCA, a professional Chartered
Accountant.Southeast Bank is run by a team of efficient professionals. They create and generate
an environment of trust and discipline that encourages and motivates everyone in the Bank to
work together for achieving the objectives of the Bank. The culture of maintaining congenial
work - environment in the Bank has further enabled the staff members to benchmark themselves
better against management expectations. A commitment to quality and excellence in service is
the hallmark of their identity. Southeast Bank takes pride for bringing women into the banking
profession in a significant number for gender equality. At present, 18.14% of SEBL's employees
are women
The City Bank: City Bank is one of the oldest private Commercial Banks operating in
Bangladesh. It is a top bank among the oldest five Commercial Banks in the country which
started their operations in 1983. The Bank started its journey on 27th March 1983 through
opening its first branch at B. B. Avenue Branch in the capital, Dhaka city. It was the visionary
entrepreneurship of around 13 local businessmen who braved the immense uncertainties and
risks with courage and zeal that made the establishment & forward march of the bank possible.
Those sponsor directors commenced the journey with only Taka 3.4 crore worth of Capital,
which now is a respectable Taka 2311.78 crore as capital & reserve.

25
Their Location in Bangladesh
Bank-Alfalah
Address -Country Office, 168, Gulshan Avenue, Dhaka-1212.
ICICI Bank Ltd.
Address - 8 panthapath, kawran bazar, level 11, suite 11-01, 1215, Dhaka, Bangladesh
Standard Chartered Bank
Address: Level 2, SCB House 67, Gulshan Avenue, Gulshan Dhaka 1212
Southeast Bank: 1, Dilkusha C/A, Dhaka - 1000
Phone: 9563101, 9550081, 956727101
The City Bank: City Bank Center
136, Gulshan Avenue, Gulshan-2
Dhaka-1212, Bangladesh
Hunting numbers: 02 58813483, 58814375, 58813126
They have been in business:
 Bank-Alfalah: 20 Years
 ICICI BANK: 23 Years
 Standard Chartered Bank: 112 Years
 Southeast Bank:22 years
 The City Bank:76 years
Different Types of Services of Competitor
Individual Banking - Banks typically offer a variety of services to assist individuals in
managing their finances, including:
 Checking accounts

26
 Savings accounts
 Debit & credit cards
 Insurance
 Wealth management
Business banking - Most banks offer financial services for business owners who need to
differentiate professional and personal finances. Different types of business banking services
include:
 Business loans
 Checking accounts
 Savings accounts
 Debit and credit cards
 Merchant services (credit card processing, reconciliation and reporting, check collection)
 Cash management (payroll services, deposit services, etc.)
Digital Banking - The ability to manage your finances online from your computer, tablet, or
Smartphone is becoming more and more important to consumers. Banks will typically offer
digital banking services that include:
 Online, mobile, and tablet banking
 Mobile check deposit
 Text alerts
 E-Statements
 Online bill pay
Loans - Loans are a common banking service offered, and they come in all shapes and sizes.
Some common types of loans that banks provide include:
 Personal loans

27
 Home equity loans
 Home equity lines of credit
 Home loans
 Business loans
Why should Invest on Banking Industry?
There are huge possibilities of the banking sector in Bangladesh. These are below:
 Banking sector of Bangladesh has a great opportunity to become a major sector of the
national economy.
 Bangladesh has huge number of population. This advantage may accelerate expansion
and growth of Bangladeshi banking sector.
 Bangladeshi banking sector is very much capable to ensure proper quality of the product
services as per requirement of the global market.
 There are ten foreign banks active in Bangladesh, but no Japanese bank yet. So there are
huge prospect for Japanese bank to open their branch in Bangladesh.
 Banks perform functions that cannot be carried out by businesses on their own.
 Banks have access to traders, financial institutions, and markets that companies or
individuals could not possibly reach.
 By using their skills and contacts, banks can get the best possible deals for their clients.
 Trade is the main driver of Bangladesh’s economic growth. Bilateral trade volumes with
Germany – Bangladesh’s second largest export partner – reached €4.4bn in 2014.

28
Why should not Invest on Banking Industry?
 Banks are really only for large corporate customers, or extremely wealthy smaller
businesses owned by individual clients.
 Not all deals carried out by banks meet with unqualified success.
 There is always risk attached to the kinds of deal that banks undertake.
 Need to pay the shareholder a share of future profits
 Origin owners may lose control of the business
 Risky for the shareholder the investment may be lost if the business fails
 Hackers accessing your bank accounts
 One need to count with an internet service provider
 One need original set up for paying time Is time consuming but will ultimately be a time
saver
 Switching banks can be more cumbersome online than a person

29
Our Decision Making
Much of the country’s human capital effectively forms its second-largest export, supplying
remittance inflows amounting to nearly 10 percent of gross domestic product in 2014. With a
population of over 160 million – of whom half are aged under 25 – Bangladesh’s demography
could instead be a key economic strength, driving its diversification into new industries.
To facilitate this diversification, the country should first focus on tackling poor infrastructure.
Ports and railway lines are in need of expansion. Unpaved roads and a reliance on the single,
highly congested Dhaka-Chittagong route cause costs and delays to commerce; while inadequate
power supplies and telecommunication systems can make business difficult. Improving this
situation is all the more necessary given the tremendously high population density, and its ever-
increasing urbanisation.
Notably, it is poor infrastructure rather than lower production costs that has enabled Indian
garment production to encroach on Bangladesh’s crucial textile sector.
Yet with a robust financial sector, Bangladesh can build the financing track record it needs for
developing infrastructure and funding ambitious long-term projects. For example, Commerzbank
has worked with local banks to finance the machinery for power generation – essential to the
country’s development.
Foreign direct investment (FDI) will, as ever, be important. Emerging from a history punctuated
by conflict, democratic instability, corruption and general strikes, the challenge will be to
reassure the outside world of Bangladesh’s potential, and high economic resilience in the face of
adversity.
Again, this is something financial institutions are in a prime position to facilitate. Bangladesh’s
central bank has ensured the necessary economic stability for attracting FDI – along with stable
sovereign credit ratings (S&P/Fitch: BB-; Moody’s: Ba3) more often seen in higher-income
economies. The country’s fiscal surpluses over the past decade, along with tax incentives, import
tax waivers, repatriable profits and serviced industrial parks, will also reassure investors of
growing opportunities in Bangladesh.
Covering risks to trade
With its infrastructure improved, Bangladesh will be in a better position to drive the commercial
activity that will continue to lift its population out of poverty. In this regard, local banks can
provide essential cover to trade – not just for commodities and raw materials, but also for capital
goods in Bangladesh’s new industries.
Through guarantees and risk-mitigation instruments such as letters of credit, payment risk to
importers can be managed, giving businesses the support they need to develop the economy.

30
In fact, thanks to Bangladesh Bank – a central bank noted for its proactive attitude to regulation –
the vital letter of credit must now cover all transactions between factories and suppliers in the
country’s crucial textile industry. Global banks, for their part, can provide security to foreign
partners working with Bangladesh. It is for this reason that Commerzbank maintains over 30
correspondent relationships with local Bangladeshi banks, facilitating payments, as well as
advising and confirming documentary credits.
Meanwhile, companies worldwide seeking to engage with this key potential market will need to
be able to safely navigate new, unfamiliar business environments. But with their on-the-ground
knowledge and expertise, banks in Bangladesh can provide targeted advice on the local situation.
By ensuring both transparency and secure communication processes, banks can inspire
confidence in the wider financial and business world – allowing the greater trade finance flows
that Bangladesh needs. This is why, in 2013, Commerzbank established a base in Dhaka, where
it could form the links and relationships among the local financial sector crucial to grasping new
opportunities in the country.
Supporting sustainable integration
Certainly, as Bangladesh integrates into the world economy, there is scope for human
development to make considerable progress alongside its economic growth – boosting the
country’s attractiveness to business. The building blocks are there.
Poverty has been cut in half since the millennium, with infant mortality rates driven down, the
average lifespan in Bangladesh exceeding those of neighbouring countries, and participation of
women in politics and the workforce now significantly higher than all other South Asian
economies.
And as the home of the Nobel Prize-winning Grameen Bank – the world’s first provider of
microfinance – Bangladesh is well placed to foster a socially, environmentally and ethically-
responsible ethos in business. Here, the financial sector can help, with banks promoting
sustainable practices in trade, and identifying reliable long-term partners who can comply with
international standards on labour, pay and worker safety.
Ensuring sustainable economic growth is not limited to local banks. International financial
institutions can play their part too. For example, banks can mark potential transactions against
strict criteria when facilitating cross-border trade. As Commerzbank’s report notes, an adherence
among banks to the Universal Declaration of Human Rights, the UN Guiding Principles on
Business and Human Rights and the International Labour Organisation’s core standards will
drive corporate responsibility as Bangladesh develops.
The central bank, meanwhile, has been proactive in channelling finance in Bangladesh towards
green investment areas, and away from speculative ventures with the potential to harm the
environment. Led by the governor, Dr Atiur Rahman – a key contributor to Commerzbank’s

31
report, and with a unique background in developmental economics – it has also focused support
for Bangladesh’s micro, small and medium-sized enterprises. These companies form the
backbone of the economy, and will remain fundamental to eradicating poverty and driving down
inequality.
Bangladesh’s future progress hinges on a strong financial sector. Local banks will be vital in its
transition to a diversified trading economy, while global financial institutions will cover the
global integration the country needs to continue its development.
Recommendation
A strong financial sector is key to realizing Bangladesh’s potential. Banks have the capacity to
tackle those risks, while their understanding of the local situation smoothes the path for
investment in a sustainable future.
The commercial banks are now considered the nerve system of all economic development in the
Bangladesh. Commercial banks are now using latest information technology, competing in the
open market with high technology system, changing from domestic banking to investment
banking.
The performance of the banking sector in terms of net profit varies in various groups of bank.
The report revealed that in every aspect, TNBs had a commendable performance. But comparing
among other groups of banks (NCBs, SPBs, and PCBs) PCBs had preferred achievement aiming
profit. On the other hand Specialized Banks in Bangladesh had a very poor performance. This
meager activity affected the overall banking sector's performance.
Recommendation

32
A solid monetary segment is vital to understanding Bangladesh's potential. Banks have the
ability to handle those dangers, while their comprehension of the nearby circumstance smoothers
the way for interest in a supportable future.
The business banks are currently viewed as the nerve arrangement of all monetary advancement
in the Bangladesh. Business banks are currently utilizing most recent data innovation, contending
in the open market with high innovation framework, changing from local saving money to
venture managing an account. The execution of the keeping money segment as far as net benefit
shifts in different gatherings of bank. The report uncovered that in each perspective, TNBs had
an estimable execution. Yet, looking at among different gatherings of banks (NCBs, SPBs, and
PCBs) PCBs had favored accomplishment pointing benefit. Then again Specialized Banks in
Bangladesh had an exceptionally poor execution. This small action influenced the general
managing an account part's execution.
Bangladesh keeping money part expensed astounding procedure in speak to of automation in
calculating in last several year. On the other hand the advancement of saving money sector inter
price dangers management and planted at many banks in our country.in the capital market there
are two sorts of investors individual and institutional general development who purchase their
offers in the mkt are similar financial specialist of Bangladesh. We see that the organization
speculators constitute a little arrangement of offer holding the capital market of Bangladesh.

33
Statement
Vision
To develop continually as a forward-looking central bank with competent and committed
professionals of high ethical stan-dards, conducting monetary management and financial sector
supervision to maintain price stability and financial system robustness, supporting rapid broad
based inclusive economic growth, employment gen-eration and poverty eradica-tion in
Bangladesh
MissionStatement
We at Bangladesh Bank are carrying out its following main functions as the country’s central
bank. We are discharging these functions in a forward looking, proactive, responsive and
consultative manner. In our aspiration for ever higher standards of performance we are aware of
our limitations in independence, logistics, professional know-how and appropriateness of skill
sets in staffing; we are persistent in effort to overcome these limitations. In our work we shall
preserve and further strengthen the already earned confidence and trust of the nation, to continue
being seen as a respected institution to be emulated. Towards achieving these, our performance
commitments to our diverse broad stake-holder groups are as follows:
For the Nation
We shall catalyze and support socially responsible and environmentally sustainable development
initiatives, inter alia including fuller financial inclusion of under-served productive sectors and
bringing in needed new dimensions in financial markets and institutions; to facilitate broad based
growth in output, employment and income, for rapid poverty eradication and inclusive economic
and social progress.
For the government
We shall adopt and implement monetary and credit policies conforming with National priorities,
in coordination with government's fiscal and other macroeconomic objectives. We shall optimize
foreign exchange reserves and returns thereon, Maintain stability in financial markets curbing
excessive volatility, and provide analysis and advice to the government on issues in economic
management and development.formulating monetary and credit policies managing currency issue
and regulating payment system managing foreign exchange reserves and regulating the foreign
exchange market regulating and supervising banks and financial institutions, andAdvising the
government on interactions and impacts of fiscal, monetary
And other economic policies.
For depositors in banks and financial institutions, investors in
Financial assets
We shall ensure safety of deposits in licensed banks and financial institutions with on-site and
off-site supervision of their activities and with adequate financial information disclosure
requirements, besides insuring small deposits. We shall maintain an interest rate structure that
provides fair return on financial assets while also supporting growth in the real sector, and we
shall promote and support development of markets in bonds and securities.

34
For banks and financial institutions in Bangladesh We shall provide precise prudential
regulatory, risk management and disclosure framework to protect solvency and liquidity of
individual institutions and stability of the overall financial system, acting as lender of last resort
if and when needed. We shall issue regulations and enforce compliance therewith inter alia on
capital adequacy, asset classification, income recognition and provisioning, large exposure and
risk management; through open consultative processes. We shall maintain external sector
viability with exchange rate stability and adequate foreign exchange reserves. We shall provide a
secure and quick payment settlement system. We shall promote and support development of new
financial products, services and instruments.
For banks abroad
We shall maintain a solvent, liquid domestic financial system with precise prudential regulatory,
risk management and disclosure framework in line with global best practice standards. We shall
maintain external sector viability with exchange rate stability and adequate reserves. We shall
maintain a secure, quick payment system for settlement of claims.
For the business community, including farm and non-farm SMEs
We shall maintain liquidity conditions and credit policies ensuring adequate credit flows at
market driven flexible interest rates for all productive economic activities, including in sectors
like agriculture and SMEs where markets have not been very responsive. We shall foster
macroeconomic stability through monetary and external sector management. We shall promote
and support development of new financial products, services and instruments. We shall maintain
a secure and quick payment system for settlement of claims.
For Bangladeshis abroad
We shall facilitate remittances from your earnings abroad to Bangladesh through legitimate
banking channels free of involvement of money launderers or terrorism financiers. We shall
support and promote development of new investment opportunities for your remittances to
Bangladesh.
For our employees
We shall maintain an environment that reinforces our pride in being employees of Bangladesh
Bank with compensation structure adequate to attract and retain the best in the market, job
assignments and logistically well resourced work situations encouraging continuous learning and
rewarding innovativeness and performance excellence by fast tracking in career path, clear
delegation and delineation of responsibilities and accountabilities, fairness and objectivity in
performance appraisal and personnel placement decision

35
SWOT ANALYSIS
Each department of Head Office and branch offices of BB worked out its Strengths,
Weakness,Opportunity and Threats in performing respective duties and responsibilities. Extracts
from the SWOT analysis are as follows:
STRENGTHS
1)Unique position as a Central Bank
2)Positive image as a Central Bank and public confidence
3)Experienced, capable, enthusiastic and innovative staff
4)Presence of basic ICT infrastructure and manpower with ‘can do’ attitude
5)Technical and financial supports of the Development Partners
WEAKNESSES
1)Inadequacy of training, professionalism and shortage of specialists
2)Skewed aging pattern of senior management staff
3)Lack of efficient MIS and effective communication channels
4)Improper workload distribution resulting in dependency on few experienced staffs
5)Inadequate HR policy including appraisal system, career planning, succession planning,
jobrotation, training need assessment, and staff welfare
6)Overbearing demeanor of BB staff in regulatory duties
7)Low remuneration package resulting in job dissatisfaction and turnover
8)Inclination of sticking to existing process resisting change
Bangladesh Economy: A SWOT Analysis

38
OPPORTUNITIES
1)Easy access to information on global norms and standards of regulation,
supervision, monetary management and other central banking functions
2)Exploit autonomy of BB and technical supports from Development Partners
3)New ICT platform (intranet, ERP, Data warehousing etc.) to enhance efficiency
4)Innovation of new instruments and expansion of new technology in the banking system
5)Increased autonomy and authority provided by changes in laws and regulations
6)Expanded programs undertaken for staff training abroad
THREATS
1)Contagion effect of national or international financial crisis
2)Failure to attract and retain talented officials
3)Increased risk of systemic breakdown and cyber piracy due to automation of work
processes
4)Failure of ICT projects and user acceptance
5)Undue influence from government and pressure groups on independent decision
making
6)Media misreporting and more Government control

39
Conclusion
Institutional investors are imperative components for the advancement bone-dry extension of the
capital market in a nation. These investors supply long haul interest in the showcase, increment
administration in the corporate division and increment the certainty of nearby retail investors and
remote investors. Therefore, Institutional investors have huge nearness and exercises in the
greater part of the developing capital market of the world. Be that as it may, the state of the
capital market of Bangladesh s very extraordinary. Here the nearness of institutional investors is
extremely restricted and their exercises in the capital market are likewise not at a tasteful level.
In Bangladesh, there might be many reasons which demoralize institutional investors to grow
their quality and exercises in the capital market. Once more, there are likewise a few factors that
discourage institutional investors to go to the capital market. The arrangement producers of this
nation should address and resolve all these ominous elements and obstacles. They should
endeavor to expand the institutional investors' base in the capital market.
In our investigation, we have discovered that there are numerous classes of institutional investors
in the capital market despite the fact that their cooperation are constrained. Once more, there are
numerous potential investors which can be acquired the capital. These two things propose that if
the legislature and administrative bodies make the capital market appealing for the institutional
investors, the support and exercises of these investors in the capital market will increment
drastically later on. This shot of expanding institutional investors' base in the capital market of
Bangladesh makes us confident.

BANGLADESH BANKING INDUSTRY ANALYSIS

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BANGLADESH BANKING INDUSTRY ANALYSIS