Money is the single most influential story of civilization. Everyone believes in money as a medium of exchange, wherever or whoever you are, whether producing banana in Bahama or Cow in India you are exchanging happily the banana or cow against a piece of printed paper. When I am eating the banana, I feel the natural flavour, taste and the banana fulfil my appetite. The story of money is powerful than any story such as religion, democracy or communism. Because Christian believes in Christianity, Muslims believes in Islam, and Democrats don’t favour communism. But money has universal acceptability.

Money took place as the medium of exchange as the civilization evolves. The history of money is older than the history of written expression. In modern ages, money circulation and control system is managed by the banking system. Banks exercise some common rules and tools to make sense among the economies.

The banking history of Bangladesh inherited from the history of the East India Company era. The first modern bank of the Bengal was “The Bank of Hindustan”, established in 1770 in Kolkata and operated until 1832 when the trading company failed. The circulation of its notes was limited to Calcutta and its immediate environs (wikipidia.org, 2019).  The Bank of Calcutta, established in 1806, is the oldest still in existence in some form. It was renamed Bank of Bengal in 1809, was merged into the Imperial Bank of India in 1921 and became the State Bank of India in 1955.

The first modern bank headquartered in Dhaka was Dacca Bank, established in 1846. It did a very limited business and did not issue banknotes. It was taken over by Bank of Bengal in 1862. In 1947, upon the Partition of Bengal, it had six branches in East Bengal, those were in Dhaka, Chattogram, Chandpur, Mymensingh, Rangpur, and Narayanganj. Following the partition of 1947, branches of the registered banks shifted to India or close down their operations in East Bengal. Only 69 branches were left all over East Pakistan in 1951. In 1959, Eastern Mercantile Bank Limited was established and had 106 before independence. Consequently, in 1965 Eastern Banking Corporation was established and soon expand to 60 branches, just before the liberation war. These two banks were established with the initiation of some renowned Bengali businessmen for providing credit to the local entrepreneurs who had limited access to the credit in those days from other financial institutions of West Pakistan (Modern Banking System).

After the inception of Pakistan, the State Bank of Pakistan, the central bank, came into force in 1948. Later the National Bank of Pakistan, a commercial bank, was set up in 1949. Among the 36 schedule bank of Pakistan, only 3 (National Bank of Pakistan, Habib Bank and Australasia Bank) had a branch in East Pakistan in 1949. Only two banks owned by local business groups and with headquarters at Dhaka, the Eastern Mercantile Bank (now Pubali Bank) and Eastern Banking Corporation (now Uttara Bank), established in 1959 and 1965 respectively.

After the independence of Bangladesh in 1971, the twelve Banking companies those were operating in the territory of Bangladesh were nationalized by the Government of the People’s Republic of Bangladesh and grouped into the following entities:

Nationalized Bank	Before Independence
Sonali Bank	National Bank of Pakistan	Bank of Bhawalpur	Premier Bank Limited
Rupali Bank	Muslim Commercial Bank	Australasia Bank Limited	Standard Bank Limited
Agrani Bank	Commerce Bank Limited	Habib Bank Limited
Janata Bank	United Bank Limited	Union Bank Limited
Pubali Bank	Eastern Mercantile Bank Limited
Uttara Bank	Eastern Banking Corporation

Cited from wikipidia.org

Bangladesh Bank, the central bank of the country, was set up on 16 December 1971 by the Bangladesh Bank Order 1972. The government accepted the assets and liabilities of the Deputy Governor’s office of the State Bank of Pakistan in Dhaka and declared the Bangladesh Bank as a fully effective and permanent central bank.

To operate banking business in Bangladesh, pursuant have to obtain the license from the Bangladesh Bank under the Bank Companies Act 1991. To be able to get a license, all intending banks have to be registered with the Registrar of Joint Stock Companies under the companies act 1994, and collect Certificate of Incorporation. Moreover, to collect capital through public offerings of shares, intending banks have to obtain permission from the Bangladesh Securities and Exchange Commission.

According to Bangladesh Bank, The financial system of Bangladesh is comprised of 3 broad fragmented sectors: (Bangladesh Bank)

All the institutions regulated by Bangladesh Bank is called to be formal sector, and the institutions regulated by other authorities of Government of Bangladesh such as Insurance Companies are regulated by Insurance Authority, is called Semi-formal sector, but the private intermediaries and enterprises whose are not registered under any regulation is called informal sector (Bangladesh Bank).

There are 62 scheduled commercial banks and specialized financial institutions, among them 38 conventional commercial banks, 7 Islami Shariah-based commercial banks, 5 commercial banks are partly or fully owned by GoB, 9 foreign commercial banks, 34 financial institutions, 5 non-scheduled commercial banks (namely Ansar VDP Bank, Karmashangosthan Bank, Grameen Bank, Jubilee Bank, Palli Sanchay Bank) and around 600 Micro Credit Financial Institutions. Further, 18 commercial Banks and Bangladesh Post Office runs Mobile Financial Services as of 21 February 2019.

 

List of Commercial Banks of Bangladesh:

Sl #	Organization	Web Link	Type
1	AB Bank Limited	http://www.abbl.com	Conventional PCB
2	Agrani Bank Limited	http://www.agranibank.org	State Owned Commercial Bank
3	Al-Arafah Islami Bank Limited	http://www.al-arafahbank.com/	Islami Shariah Based PCB
4	Ansar VDP Unnayan Bank		Non Scheduled SOB, Sponsored by Ansar VDP
5	Bangladesh Commerce Bank Limited	http://bcblbd.com/	Conventional PCB
6	Bangladesh Development Bank Limited	http://www.bdbl.com.bd	State Owned Commercial Bank
7	Bangladesh Krishi Bank	http://www.krishibank.org.bd	State Owned Commercial Bank
8	Bank Al-Falah Limited	http://www.bankalfalah.com	Foreign Commercial Bank
9	Bank Asia Limited	http://www.bankasia-bd.com	Conventional PCB
10	BASIC Bank Limited	http://www.basicbanklimited.com	State Owned Commercial Bank
11	Bengal Bank Ltd	Approved in Feb 2019	Conventional PCB
12	BRAC Bank Limited	http://www.bracbank.com	Conventional PCB
13	Citibank N.A	http://www.citi.com/domain/index.htm	Foreign Commercial Bank
14	Citizen Bank Ltd	Approved in Feb 2019	Conventional PCB
15	Commercial Bank of Ceylon Limited	http://www.combank.net/bdweb/	Foreign Commercial Bank
16	Dhaka Bank Limited	http://dhakabankltd.com	Conventional PCB
17	Dutch-Bangla Bank Limited	http://www.dutchbanglabank.com	Conventional PCB
18	Eastern Bank Limited	http://www.ebl.com.bd	Conventional PCB
19	EXIM Bank Limited	http://www.eximbankbd.com	Islami Shariah Based PCB
20	First Security Islami Bank Limited	http://www.fsiblbd.com	Islami Shariah Based PCB
21	Grameen Bank	www.grameen.com	Specialized MFI
22	Habib Bank Ltd.	http://globalhbl.com/Bangladesh/	Foreign Commercial Bank
23	ICB Islamic Bank Ltd.	http://www.icbislamic-bd.com/	Foreign Commercial Bank
24	IFIC Bank Limited	http://www.ificbank.com.bd/	Conventional PCB
25	Islami Bank Bangladesh Ltd	http://www.islamibankbd.com	Islami Shariah Based PCB
26	Jamuna Bank Ltd	http://www.jamunabankbd.com	Conventional PCB
27	Janata Bank Limited	http://www.janatabank-bd.com	Conventional PCB
28	Jubilee Bank		Non Scheduled Commercial Bank
29	Karmashangosthan Bank		Non-Scheduled SOB
30	Meghna Bank Limited	http://www.meghnabank.com.bd	Conventional PCB
31	Mercantile Bank Limited	http://www.mblbd.com	Conventional PCB
32	Midland Bank Limited	http://www.midlandbankbd.net/	Conventional PCB
33	Modhumoti Bank Ltd.	http://modhumotibankltd.com/	Conventional PCB
34	Mutual Trust Bank Limited	http://www.mutualtrustbank.com	Conventional PCB
35	National Bank Limited	http://www.nblbd.com	Conventional PCB
36	National Bank of Pakistan	http://www.nbp.com.pk	Conventional PCB
37	National Credit & Commerce Bank Ltd	http://www.nccbank.com.bd	Conventional PCB
38	NRB Bank Limited	http://www.nrbbankbd.com	Conventional PCB
39	NRB Commercial Bank Limited	http://www.nrbcommercialbank.com/	Conventional PCB
40	NRB Global Bank Limited	http://www.nrbglobalbank.com	Conventional PCB
41	One Bank Limited	http://www.onebankbd.com	Conventional PCB
42	Palli Sanchay Bank	http://www.pallisanchaybank.gov.bd/	Non Scheduled SOB
43	People’s Bank Ltd	Approved in Feb 2019	Conventional PCB
44	Premier Bank Limited	http://www.premierbankltd.com	Conventional PCB
45	Prime Bank Ltd	https://www.primebank.com.bd/	Conventional PCB
46	Probashi Kollyan Bank	http://www.pkb.gov.bd/	Specialized State-Owned Bank
47	Pubali Bank Limited	http://www.pubalibangla.com	Conventional PCB
48	Rajshahi Krishi Unnayan Bank	http://www.rakub.org.bd	Specialized State-Owned Bank
49	Rupali Bank Limited	https://rupalibank.org/en/	State Owned Commercial Bank
50	Shahjalal Islami Bank Limited	http://www.sjiblbd.com/	Conventional PCB
51	Shimanto Bank Limited	http://www.shimantobank.com/	Conventional PCB, sponsored by BGB
52	Social Islami Bank Ltd.	http://www.siblbd.com	Islami Shariah Based PCB
53	Sonali Bank Limited	http://www.sonalibank.com.bd	State Owned Commercial Bank
54	South Bangla Agriculture & Commerce Bank Limited	http://www.sbacbank.com/	Conventional PCB
55	Southeast Bank Limited	https://www.southeastbank.com.bd	Conventional PCB
56	Standard Bank Limited	http://www.standardbankbd.com	Conventional PCB
57	Standard Chartered Bank	http://www.standardchartered.com/bd	Foreign Commercial Bank
58	State Bank of India	https://sbibd.com/	Foreign Commercial Bank
59	The City Bank Ltd.	http://www.thecitybank.com	Conventional PCB
60	The Farmers Bank Ltd (now Padma Bank Ltd)	http://www.farmersbankbd.com, http://padmabankbd.com/	Conventional PCB
61	The Hong Kong and Shanghai Banking Corporation. Ltd.	http://www.hsbc.com.bd	Foreign Commercial Bank
62	Trust Bank Limited	http://www.trustbank.com.bd	Conventional PCB
63	Union Bank Limited	http://www.unionbank.com.bd/	Islami Shariah Based PCB
64	United Commercial Bank Limited	http://www.ucb.com.bd/	Conventional PCB
65	Uttara Bank Limited	http://www.uttarabank-bd.com	Conventional PCB
66	Woori Bank	http://www.wooribank.com	Foreign Commercial Bank

* PCB stands for Private Commercial Bank

 

List of Financial Institutions of Bangladesh:

Organization	Web Link
Agrani SME Financing Company Limited	http://agranisme.org
Bangladesh Finance & Investment Co. Ltd.	http://www.bdfinance.net
Bangladesh Industrial Finance Company Limited (BIFC)	http://www.bifcol.com
Bangladesh Infrastructure Finance Fund Limited	http://www.biffl.org.bd/
Bay Leasing & Investment Limited	http://www.blilbd.com
CAPM Venture Capital and Finance Limited	http://www.cvcflbd.com
Delta Brac Housing Finance Corporation Ltd. (DBH)	http://www.deltabrac.com
Fareast Finance & Investment Limited	http://www.ffilbd.com
FAS Finance & Investment Limited	http://www.fasbd.com
First Finance Limited	http://www.first-finance.com.bd
GSP Finance Company (Bangladesh) Limited (GSPB)	http://www.gspfinance.com
Hajj Finance Company Limited	http://www.hajjfinance.net
IDLC Finance Limited	http://www.idlc.com
Industrial and Infrastructure Development Finance Company (IIDFC) Limited	http://www.iidfc.com
Infrastructure Development Company Limited (IDCOL)	http://www.idcol.org
International Leasing and Financial Services Limited	http://www.ilfsl.com
IPDC Finance Ltd	http://www.ipdcbd.com
Islamic Finance and Investment Limited	http://www.ifilbd.com
LankaBangla Finance Ltd.	http://www.lankabangla.com
Lankan Alliance Finance Limited	https://www.lankanalliance.com
Meridian Finance and Investment Ltd.	http://www.meridianfinancebd.com
MIDAS Financing Ltd. (MFL)	http://www.mfl.com.bd
National Finance Ltd	http://www.nfl.com.bd
National Housing Finance and Investments Limited	http://www.nationalhousingbd.com/
People’s Leasing and Financial Services Ltd	http://www.plfsbd.com
Phoenix Finance and Investments Limited	http://phoenixfinance.com.bd
Premier Leasing & Finance Limited	http://www.premierleasing.com.bd
Prime Finance & Investment Ltd	http://www.primefinancebd.com
Reliance Finance Limited	http://www.reflbd.com
Saudi-Bangladesh Industrial & Agricultural Investment Company Limited (SABINCO)	http://www.sabinco.com.bd
The UAE-Bangladesh Investment Co. Ltd	https://ubinco.com
Union Capital Limited	http://www.unicap-bd.com
United Finance Limited	http://www.ulc.com.bd
Uttara Finance and Investments Limited	http://www.uttarafinance.biz

 

There are 78 insurance companies operating in Bangladesh, among them 46 are general insurance and 32 are life insurance companies, 1 in each category is state-owned and 1 foreign life insurance company.

List of Insurance companies of Bangladesh:

Sl #	Organization	Weblink	Type	Ownership
1	Agrani Insurance Limited	www.agraniins.com	Non Life/General	Private
2	Asia Insurance Limited	www.asiainsurancebd.com	Non Life/General	Private
3	Asia Pacific General Insurance Company Limited	www.apgicl.com	Non Life/General	Private
4	Bangladesh Cooperative Insurance Limited	www.bdcoopinsurance.com	Non Life/General	Private
5	Bangladesh General Insurance Company Limited	www.bgicinsure.com	Non Life/General	Private
6	Bangladesh National Insurance Company Limited	www.bnicl.net	Non Life/General	Private
7	Central Insurance Company Limited	www.cicl-bd.com	Non Life/General	Private
8	City General Insurance Company Limited	www.cityinsurance.com.bd	Non Life/General	Private
9	Continental Insurance Limited	www.cilbd.com	Non Life/General	Private
10	Crystal Insurance Company Limited	www.ciclbd.com	Non Life/General	Private
11	Desh General Insurance Company Limited	www.deshinsurancebd.com	Non Life/General	Private
12	Dhaka Insurance Limited	www.dhakainsurancebd.com	Non Life/General	Private
13	Eastern Insurance Company Limited	www.easterninsurancebd.com	Non Life/General	Private
14	Eastland Insurance Company Limited	www.eastlandinsurance.com	Non Life/General	Private
15	Express Insurance Limited	www.eilbd.com	Non Life/General	Private
16	Federal Insurance Company Limited	www.federalinsubd.com	Non Life/General	Private
17	Global Insurance Limited	www.globalinsurancebd.com	Non Life/General	Private
18	Green Delta Insurance Company Limited	www.green-delta.com	Non Life/General	Private
19	Islamic Commercial Insurance Company Limited	www.iciclbd.com	Non Life/General	Private
20	Islami Insurace Bangladesh Ltd	www.islamiinsurance.com	Non Life/General	Private
21	Janata Insurance Company Limited	www.janatainsurance.com	Non Life/General	Private
22	Karnaphuli Insurance Company Limited	www.kiclbd.com	Non Life/General	Private
23	Meghna Insurance Company Limited	www.micl.com.bd	Non Life/General	Private
24	Mercantile Insurance Company Limited	www.mercantileins.com	Non Life/General	Private
25	Nitol Insurance Company Limited	www.nitolinsurance.com	Non Life/General	Private
26	Northern General Insurance Company Limited	www.ngicl.com	Non Life/General	Private
27	Paramount Insurance Company Limited	www.paramountgroupbd.com/insurance	Non Life/General	Private
28	Peoples Insurance Company Limited	www.peoplesinsurancebd.com	Non Life/General	Private
29	Phoenix Insurance Company Limited	www.phoenixinsurance.co.bd	Non Life/General	Private
30	Pioneer Insurance Company Limited	www.pioneerinsurance.com.bd	Non Life/General	Private
31	Pragati Insurance Limited	info@pragatiinsurance.com	Non Life/General	Private
32	Prime Insurance Company Limited	www.prime-insurance.net	Non Life/General	Private
33	Provati Insurance Company Limited	www.provati-insurance.com	Non Life/General	Private
34	Purubi General Insurance Company Limited	www.purabiinsurance.com	Non Life/General	Private
35	Reliance Insurance Limited	www.reliance.com.bd	Non Life/General	Private
36	Republic Insurance Company Limited	www.riclbd.com	Non Life/General	Private
37	Rupali Insurance Company Limited	www.rupaliinsurance.com	Non Life/General	Private
38	Sadharan Bima Corporation	www.sbc.gov.bd	Non Life/General	State Owned
39	Sena Kalyan Insurance Company Limited	www.senakalyanicl.com	Non Life/General	Private
40	Sikder Insurance Company Limited	www.sikderinsurance.com	Non Life/General	Private
41	Sonar Bangla Insurance Limited	www.sonarbanglains.com	Non Life/General	Private
42	South Asia Insurance Company Limited	www.southasiainsurance.com	Non Life/General	Private
43	Standard Insurance Limited	www.standardinsurance.com.bd	Non Life/General	Private
44	Takaful Ins.Ltd	www.takaful.com.bd	Non Life/General	Private
45	Union Insurance Company Limited	www.unioninsurancebd.com	Non Life/General	Private
46	United Insurance Company Limited	www.unitedinsurance.com.bd	Non Life/General	Private
47	Alpha Islami Life Insurance	www.alphalife.com.bd	Life	Private
48	Baira Life Ins	www.bairalife.com	Life	Private
49	Best Life Insurance	www.bestlifebd.com	Life	Private
50	Chartered Life Insurance	www.charteredlifebd.com	Life	Private
51	Diamond Life Insurance	www.diamondlifebd.com	Life	Private
52	Delta Life Insurance	www.deltalife.com	Life	Private
53	Fareast Islami Life Insurance	www.fareastislamilife.com	Life	Private
54	Golden Life Insurance	www.goldenlife-insurance.com	Life	Private
55	Guardian Life Insurance	www.guardianlife.com.bd	Life	Private
56	Homeland Life Insurance	www.homelandlife.com	Life	Private
57	Jamuna Life Insurance	www.jamunalife.com	Life	Private
58	Jibon Bima Corporation	www.jbc.gov.bd	Life	State Owned
59	LIC Bangladesh	www.licbangladesh.com	Life	Private
60	Meghna Life Insurance	www.meghnalife.com	Life	Private
61	Mercentile Life Insurance	www.milil.com.bd	Life	Private
62	Metlife	www.metlife.com.bd	Life	Foreign
63	National Life Insurance	www.nlibd.com	Life	Private
64	NRB Global  Life Insurance	www.nrbgloballife.com	Life	Private
65	Padma Islami Life Insurance	www.padmalife.com	Life	Private
66	Popular Life Insurance	www.popularlifeins.com	Life	Private
67	Pragati Life Insurance	www.pragatilife.com	Life	Private
68	Prime Islami Life Insurance	www.primeislamilifebd.com	Life	Private
69	Progressive Life Insurance	www.progressivelife.com.bd	Life	Private
70	Protective Islami Life Insurance	www.protectivelife.com.bd.	Life	Private
71	Rupali Life  Insurance	www.rupalilife.com	Life	Private
72	Sandhani Life Insurance	www.sandhanilife.com	Life	Private
73	Sawdesh Life Insurance	www.swadeshlife.com	Life	Private
74	Sonali Life Insurance	www.sonalilife.com	Life	Private
75	Sunflower Life Insurance	www.sunflowerlife.com	Life	Private
76	Sunlife Insurance	www.sunlifeinsbd.org	Life	Private
77	Trust Islami Life Insurance	www.trustislamilife.com	Life	Private
78	Zenith Islami Life Insurance	www.zenithlifebd.com	Life	Private

 

Mobile Phone based financial services to people of Bangladesh by 18 commercial banks and Bangladesh Post office changing the landscape of financial inclusion. Almost 90% transaction is happening in this sector but in value, it is only 10%. bKash, rocket, mCash, Ucash, Tchash, nagad etc are popular among them.

 

Regulators of the Financial System of Bangladesh

 

Bangladesh Bank

(weblink: bb.org.bd)

Bangladesh Bank acts as the Central Bank of Bangladesh which was established on December 16, 1971 through the enactment of Bangladesh Bank Order 1972- President’s Order No. 127 of 1972 (Amended in 2003).

The general superintendence and direction of the affairs and business of BB have been entrusted to a 9 members’ Board of Directors which is headed by the Governor who is the Chief Executive Officer of this institution as well. BB has 45 departments and 10 branch offices.

The main functions of BB are (Section 7A of BB Order, 1972) –

• to formulate and implement monetary policy;
• to formulate and implement intervention policies in the foreign exchange market;
• to give advice to the Government on the interaction of monetary policy with fiscal and exchange rate policy, on the impact of various policy measures on the economy and to propose legislative measures it considers necessary or appropriate to attain its objectives and perform its functions;
• to hold and manage the official foreign reserves of Bangladesh;
• to promote, regulate and ensure a secure and efficient payment system, including the issue of bank notes;
• to regulate and supervise banking companies and financial institutions.

Monetary policy

The main objectives of monetary policy of Bangladesh Bank are:

• Price stability both internal & external
• Sustainable growth & development
• High employment
• Economic and efficient use of resources
• Stability of financial & payment system

Bangladesh Bank declares the monetary policy by issuing Monetary Policy Statement (MPS) twice (January and July) in a year. The tools and instruments for implementation of monetary policy in Bangladesh are Bank Rate, Open Market Operations (OMO), Repurchase agreements (Repo) & Reverse Repo, Statutory Reserve Requirements (SLR & CRR).

Reserve Management Strategy

Bangladesh Bank maintains the foreign exchange reserve of the country in different currencies to minimize the risk emerging from widespread fluctuation in the exchange rate of major currencies and very irregular movement in interest rates in the global money market. BB has established Nostro account arrangements with different Central Banks. Funds accumulated in these accounts are invested in Treasury bills, repos and other government papers in the respective currencies. It also makes an investment in the form of short term deposits with different high rated and reputed commercial banks and purchase of high rated sovereign/supranational/corporate bonds. A separate department of BB performs the operational functions regarding investment which is guided by investment policy set by the BB’s Investment Committee headed by a Deputy Governor. The underlying principle of the investment policy is to ensure the optimum return on investment with minimum market risk.

Interest Rate Policy

Under the Financial sector reform program, a flexible interest policy was formulated. According to that, banks are free to charge/fix their deposit (Bank /Financial Institutes) and Lending (Bank /Financial Institutes) rates other than Export Credit.  At present, except Pre-shipment export credit and agricultural lending, there is no interest rate cap on lending for banks. Yet, banks can differentiate interest rate up to 3% considering comparative risk elements involved among borrowers in the same lending category. With progressive deregulation of interest rates, banks have been advised to announce the mid-rate of the limit (if any) for different sectors and the banks may change interest 1.5% more or less than the announced mid-rate on the basis of the comparative credit risk. Banks upload their deposit and lending interest rate in their respective website.

Capital Adequacy for Banks and FIs

Basel-III has been introduced with a view to strengthening the capital base of banks with the goal of promoting a more resilient banking sector. The Basel III regulation will be adopted in a phased manner starting from January 2015, with full implementation of capital ratios from the beginning of 2019. Now, scheduled banks in Bangladesh are required to maintain minimum capital of Taka 4 billion or Capital to Risk Weighted Assets Ratio (CRAR) 10%, whichever is higher. In addition to minimum CRAR, Capital Conservation Buffer (CCB) of 2.5% of the total RWA is being introduced which will be maintained in the form of CET1. Besides the minimum requirement, all banks have a process for assessing overall capital adequacy in relation to their risk profile and a strategy for maintaining capital at an adequate level.

For FIs, full implementation of Basel-II has been started on January 01, 2012 (Prudential Guidelines on Capital Adequacy and Market Discipline (CAMD) for Financial Institutions). Now, FIs in Bangladesh are required to maintain Tk. 1 billion or 10% of Total Risk Weighted Assets as capital, whichever is higher.

Deposit Insurance

The deposit insurance scheme (DIS) was introduced in Bangladesh in August 1984 to act as a safety net for the depositors. All the scheduled banks Bangladesh are the member of this scheme Bank Deposit Insurance Act 2000. The purpose of DIS is to help to increase market discipline, reduce moral hazard in the financial sector and provide safety nets at the minimum cost to the public in the event of bank failure. A Deposit Insurance Trust Fund (DITF) has also been created for providing limited protection (not exceeding Taka 0.01 million) to a small depositor in case of winding up of any bank. The Board of Directors of BB is the Trustee Board for the DITF. BB has adopted a system of risk-based deposit insurance premium rates applicable for all scheduled banks effective from January – June 2007. According to new instruction regarding premium rates, problem banks are required to pay 0.09 percent and private banks other than the problem banks and state-owned commercial banks are required to pay 0.07 percent where the percent coverage of the deposits is taka one hundred thousand per depositor per bank. With this end in view, BB has already advised the banks for bringing DIS into the notice of the public through displaying the same in their display board.

 

Insurance Authority – IDRA

(weblink: http://www.idra.org.bd/)

Insurance Development and Regulatory Authority (IDRA) was instituted on January 26, 2011, as the regulator of insurance industry being empowered by Insurance Development and Regulatory Act, 2010 by replacing its predecessor, Chief Controller of Insurance. This institution is operated under the Ministry of Finance and a 4 member executive body headed by Chairman is responsible for its general supervision and direction of the business.

IDRA has been established to make the insurance industry as the premier financial service provider in the country by structuring on an efficient corporate environment, by securing embryonic aspiration of society and by penetrating deep into all segments for high economic growth. The mission of IDRA is to protect the interest of the policyholders and other stakeholders under the insurance policy, supervise and regulate the insurance industry effectively, ensure orderly and systematic growth of the insurance industry and for matters connected therewith or incidental thereto.

 

Regulator of Capital Market Intermediaries

(weblink: http://www.sec.gov.bd/)

Securities and Exchange Commission (SEC) performs the functions to regulate the capital market intermediaries and issuance of capital and financial instruments by public limited companies. It was established on June 8, 1993 under the Securities and Exchange Commission Act, 1993. A 5 member commission headed by a Chairman has the overall responsibility to administer securities legislation and the Commission is attached to the Ministry of Finance.

The mission of SEC is to protect the interests of securities investors, to develop and maintain fair, transparent and efficient securities markets and to ensure proper issuance of securities and compliance with securities laws.

The main functions of SEC are:

• Regulating the business of the Stock Exchanges or any other securities market.
• Registering and regulating the business of stock-brokers, sub-brokers, share transfer agents, merchant bankers and managers of issues, trustee of trust deeds, registrar of an issue, underwriters, portfolio managers, investment advisers and other intermediaries in the securities market.
• Registering, monitoring and regulating of collective investment scheme including all forms of mutual funds.
• Monitoring and regulating all authorized self-regulatory organizations in the securities market.
• Prohibiting fraudulent and unfair trade practices in any securities market.
• Promoting investors’ education and providing training for intermediaries of the securities market.
• Prohibiting insider trading in securities.
• Regulating the substantial acquisition of shares and take-over of companies.
• Undertaking investigation and inspection, inquiries and audit of any issuer or dealer of securities, the Stock Exchanges and intermediaries and any self-regulatory organization in the securities market.
• Conducting research and publishing information.

 

Regulator of Micro Finance Institutions

(weblink: http://www.mra.gov.bd/)

 

To bring Non-government Microfinance Institutions (NGO-MFIs) under a regulatory framework, the Government of Bangladesh enacted “Microcredit Regulatory Authority Act, 2006’” (Act no. 32 of 2006) which came into effect from August 27, 2006. Under this Act, the Government established the Microcredit Regulatory Authority (MRA) with a view to ensuring transparency and accountability of microcredit activities of the NGO-MFIs in the country. The Authority is empowered and responsible to implement the said act and to bring the microcredit sector of the country under a full-fledged regulatory framework.

MRA’s mission is to ensure transparency and accountability of microfinance operations of NGO-MFIs as well as foster sustainable growth of this sector. In order to achieve its mission, MRA has set itself the task to attain the following goals:

• To formulate as well as implement the policies to ensure good governance and transparent financial systems of MFIs.
• To conduct in-depth research on critical microfinance issues and provide policy inputs to the government consistent with the national strategy for poverty eradication.
• To provide training of NGO-MFIs and linking them with the broader financial market to facilitate sustainable resources and efficient management.
• To assist the government to build up an inclusive financial market for economic development of the country.
• To identify the priorities in the microfinance sector for policy guidance and dissemination of information to attain the MRA’s social responsibility.

According to the Act, the MRA will be responsible for the three primary functions that will need to be carried out, namely:

 

Licensing of MFIs with explicit legal powers;

Supervision of MFIs to ensure that they continue to comply with the licensing requirements; and

Enforcement of sanctions in the event of any MFI failing to meet the licensing and ongoing supervisory requirements.

 

Register of Joint Stock Companies

(weblink: http://www.roc.gov.bd/)

The Registrar of Joint Stock Companies And Firms (RJSC) is an organization of Government of People’s Republic of Bangladesh. After the partition of India, it was established for the first time in 1962 in the port city of Chittagong under the Ministry of Commerce. Then it started its activities with some documents from companies, professional organizations and partnership business from Calcutta, India.

The Registrar of Joint Stock Companies and Firms (RJSC) is the sole authority which facilitates formation of companies etc.; and keeps track of all ownership related issues as prescribed by the laws in Bangladesh.

The Registrar is the authority of the Office of the Registrar of Joint Stock Companies and Firms, Bangladesh.

RJSC deals with the following types of entities:

• Private companies
• Public companies
• Foreign companies
• Trade organizations
• Societies, and
• Partnership firms

 

RJSC accords registration and ensures lawful administration of the entities under the provisions of applicable act as under:

 

• Companies and Trade Organizations: Companies Act, 1994 (Amendment of Companies Act 1913)
• Societies: Societies Registration Act, 1860
• Partnership Firms: Partnership Act, 1932

 

Its Head Office was transferred to Dhaka. Currently, under RJSC, there are 1 lakh 90 thousand institutions registered.

 

 

 

 

Works Cited

wikipidia.org. (2019, February 21). Banking in Bangladesh. Retrieved February 21, 2019, from https://en.wikipedia.org/wiki/Banking_in_Bangladesh

Bangladesh Bank. (n.d.). Retrieved February 21, 2019, from https://www.bb.org.bd/fnansys/index.php

IDRA. (n.d.). Retrieved February 22, 2019, from Insurance Development and Regulatory Authority: http://www.idra.org.bd/site/page/ab3f33d4-fd9d-478b-ad0c-abc27ad93cfe/%E0%A6%B2%E0%A6%BE%E0%A6%87%E0%A6%AB-%E0%A6%AC%E0%A7%80%E0%A6%AE%E0%A6%BE%E0%A6%95%E0%A6%BE%E0%A6%B0%E0%A7%80-%E0%A6%AA%E0%A7%8D%E0%A6%B0%E0%A6%A4%E0%A6%BF%E0%A6%B7%E0%A7%8D%E0%A6%A0%E0%A6%BE%E0%A6%A8%E0%A6%B8%E0%A6%AE%E0%A7%82%E0%A6%B9

Modern Banking System. (n.d.). Retrieved February 21, 2019, from http://en.banglapedia.org/index.php?title=Banking_System,_Modern