The Institute of Chartered Accountants
of Bangladesh
An assignment on
Economics
Foundation Course (Group-G)
7th Batch
"BANKING IN BANGLADESH"
Submitted by-
Md. Faruk Hossain
Roll no. 454
Submitted to-
Mr. Kazi Abul Bashar
Class Teacher
Date :? 21-01-2003
After Independence of Bangladesh the banking sector was restructured as a fall out of war of liberation. Banking grew primarily in the public sector with main emphasis development needs of the war-torn economy. With gradual liberalization in subsequent years, it was increasingly felt that banks should be allowed in the private sector for giving a fillip to development process on the basis of private initiative. In the 80's for the first time a number of banks in the private sector was allowed. Subsequently in the mid 90's some more banks in private sector commenced operations. In 1999. 3rd Generation of private sector banks was given permission to operate. Finally in 2001 4th Generation of private sector banks commenced operation. As a result while up to 80's financial sector was dominated by public sector banks, banks in the private sector were given increased responsibility with the passage of time. The share of deposits of Nationalised Commercial Banks (NCBs) in total deposits which stood at 89% in 1980 gradually declined over years to reach the level of 55% in 2000. Simultaneously, Private Commercial Banks (PCBs) which were responsible for only 18% of deposits in 1985 this share increased gradually over the years to constitute abort one third
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of the total deposits of the country by the end of the millenniu ...