Assignment of UGC University of Bnagladesh

1. An Assignment
On
Topic: Financial systemof Bangladesh
Course Title: Financial institution
Course code: FIN-409
Submitted To:
Ms. Aysa Yeasmin
Assistant Professor
Department of Business Administration
Sylhet International University
Submitted By:
Tanzirul Haque
Roll No: 27119
Reg: No:143201119
BBA Program
Semester: 4-1
Department of Business Administration
Sylhet International University
Date of Submission: 22 /11/2018

2. Financial System of Bangladesh
The Financial System is a set of institutional arrangement through which surplus units
transfer their fund to deficit units. At present the financial system in Bangladesh is mainly
composed of two types of institutions like banks and non-bank financial institution (NBFIs).
Financial Systems of Bangladesh
 Structure of Financial System;
The main constituents of financial system are;
i) Financial Markets.
ii) Financial Institutions
iii) Regulatory Authorities
iv) NGO’s
i) Financial markets
Financial markets facilitate the flow of funds in order to finance investments by governments,
corporations, and individuals. It transfers funds from those who have excess funds (surplus
units)to those who need funds(deficit units).Financial markets facilitate:
capital(in the capital markets)
risk (in the derivatives markets)
ry
liquidity(in the money markets)
International trade(in the currency markets)
Financial
market
Financial
institution
Regulatory
authority
NGOs

3. ii) Financial Institutions:
The modern name of Financial Institution is Financial Intermediary (FI), because it mediates
or stand between ultimate borrowers and ultimate lenders and helps transfer funds from one
to another. The Financial system helps production, capital-accumulation and growth by
i) encouraging savings and
ii) allocating them among the alternative uses and users
iii) Regulatory authorities: A regulatory agency (also regulatory authority, regulatory
body or regulator) is a public authority or government agency responsible for exercising
autonomous authority over some area of human activity in a regulatory or supervisory
capacity.
Regulatory authorities are commonly set up to enforce safety and standards, and/or to protect
consumers in markets where there is a lack of effective competition or the potential for the
undue exercise of market power. Examples of regulatory agencies that enforce standards
include the Food and Drug Administration in the United States and the Medicines and
Healthcare Products Regulatory Agency in the United Kingdom; and, in the case of economic
regulation, the Office of Gas and Electricity Markets and the Telecom Regulatory
Authority in India.
iv) Non-governmental organizations: commonly referred to as NGOs, are usually non-
profit and sometimes international organizations independent of governments and
international governmental organizations (though often funded by governments) that are
active in humanitarian, educational, health care, public policy, social, human rights,
environmental, and other areas to affect changes according to their objectives. They are thus a
subgroup of all organizations founded by citizens, which include clubs and
other associations that provide services, benefits, and premises only to members. Sometimes
the term is used as a synonym of "civil society organization" to refer to any association
founded by citizens, but this is not how the term is normally used in the media or everyday
language, as recorded by major dictionaries. The explanation of the term by NGO.org (the
non-governmental organizations associated with the United Nations) is ambivalent. It first
says an NGO is any non-profit, voluntary citizens' group which is organized on a local,
national or international level, but then goes on to restrict the meaning in the sense used by
most English speakers and the media:

4. Task-oriented and driven by people with a common interest, NGOs perform a variety of
service and humanitarian functions, bring citizen concerns to Governments, advocate and
monitor policies and encourage political participation through provision of information.
Types of financial markets;
Money market Vs Capital markets:
 Capital Markets:
Capital markets are perhaps the most widely followed markets. Both the stock and
bond markets are closely followed, and their daily movements are analyzed as proxies
for the general economic condition of the world markets. As a result, the institutions
operating in capital markets – stock exchanges, commercial banks and all types of
corporations, including non-bank institutions such as insurance companies and
mortgage banks – are carefully scrutinized.
The institutions operating in the capital markets access them to raise capital for long-
term purposes, such as for a merger or acquisition, to expand a line of business or
enter into a new business, or for other capital projects. Entities that are raising money
for these long-term purposes come to one or more capital markets. In the bond market,
companies may issue debt in the form of corporate bonds, while both local and
federal governments may issue debt in the form of government bonds.

5.  Money Market:
The money market is often accessed alongside the capital markets. While investors are
willing to take on more risk and have patience to invest in capital markets, money
markets are a good place to "park" funds that are needed in a shorter time period –
usually one year or less. The financial instruments used in capital markets include
stocks and bonds, but the instruments used in the money markets include deposits,
collateral loans, acceptances and bills of exchange. Institutions operating in money
markets are central banks, commercial banks and acceptance houses, among others.
Money markets provide a variety of functions for either individual, corporate or
government entities. Liquidity is often the main purpose for accessing money markets.
When short-term debt is issued, it's often for the purpose of covering operating
expenses or working capital for a company or government and not for capital
improvements or large-scale projects. Companies may want to invest funds overnight
and look to the money market to accomplish this, or they may need to cover payroll
and look to the money market to help.
The money market plays a key role assuring companies and governments maintain
the appropriate level of liquidity on a daily basis, without falling short and needing a
more expensive loan or without holding excess funds and missing the opportunity of
gaining interest on funds.