Problems and prospects of banking industry in Bangladesh
The central bank has finally accepted nine more banks furthermore to existing 47 business banks in Bangladesh. 3 new NRB commercial banks, sponsored by nonresident Bangladeshis (NRBs), and six exclusive commercial banks (PCBs), have already been approved trying to help boost the inflow of foreign exchange and strengthen the ongoing financial addition programmes through bringing unbanked people within the banking network respectively. The letters of intent (LoIs) `have recently been issued for the sponsors of such accepted banks. There have been many significant developments throughout the economy of Bangladesh since 2000-2001, the central bank stated, explaining the economic framework and reason behind giving licences in favour of new financial institutions. The economy is growing and the bank system has become more competitive but you may still find a large number of under-banked people in Bangladesh.
The latest estimates via a survey conducted by the Institute of Microfinance (IoF) found that only 45 per cent of the nearly 9000 people surveyed do have access to banks and micro-finance institutions (MFIs) for financial loans. The population every branch (21065) and the ratio of loan accounts per 1000 adults (42yrs) suggest that the outreach of the formal financial sector in Bangladesh is lower than that in India (14485 and 124 respectively) and Pakistan (20340 population per branch and 47 bank loan accounts every 1000), according to the statement of IoF.
Bangladesh Bank assumes that the fresh banks will assist increase the quality of financial services by increasing competition in the banking sector. They will also be able to satisfy the unfulfilled demand for credit by private sector whose demands have grown in line with a fast increasing economy. The central traditional bank noted that, for new banking institutions the ratio of opening rural and urban department will be you: 1 which supports increase financial institution branches in rural areas and boost financial add-on. But the home truth...