Types of Banks in Bangladesh

The banks in Bangladesh have been playing an important role in the economic development of the country by providing investible funds to both public sector and private sector. Banks are the main formal financial system in the country. The banking sector of Bangladesh includes several types of banks. Bangladesh Bank is the central bank of Bangladesh and the regulatory authority of the banking sector.

Types of Banks in Bangladesh

Under the governance of Central Bank, banks in Bangladesh are primarily of two types: Scheduled Banks and Non-Scheduled Banks.

Scheduled Banks: Scheduled Banks in Bangladesh are the banks which are maintained under Bangladesh Bank Order, 1972.

There are 61 scheduled banks in Bangladesh operating under supervision of Bangladesh Bank. These scheduled banks operated under Bangladesh Bank Order, 1972 and Bank Company Act, 1991.

Scheduled Banks in Bangladesh are also classified into different types as follows-

State Owned Commercial Banks in Bangladesh

There are Six Stated Owned Commercial Banks which are fully or majorly owned by the Government of Bangladesh.

Specialized Banks in Banks in Bangladesh

3 specialized banks are now in operation, which were established for specific objectives like agricultural or industrial development. These banks also have full or majority ownership by the Government of Bangladesh.

Private Commercial Banks in Bangladesh

There are 43 private commercial banks which are majorly owned by individuals/the private entities. Private Banks in Bangladesh can be categorized into two groups:

Conventional Private Banks

33 conventional PCBs are now operating in Bangladesh. They perform the banking functions in conventional banking rules i.e interest based operations.

Islami Shariah Based Private Banks in Bangladesh

There are 10 Islami Shariah based Private Banks in Bangladesh. These banks are operating their banking activities according to Islami Shariah based principles i.e. Profit-Loss Sharing (PLS) mode.

Foreign Commercial Banks in Bangladesh

9 Foreign Banks are operating in Bangladesh and their main branches are located in abroad.

Non-Scheduled Banks in Bangladesh

The banks which are established for special objective and operate under any act are called non-Scheduled Banks. These banks are not allowed to perform all functions of scheduled banks. There are now 5 non-scheduled banks in Bangladesh which are Ansar VDP Unnayan Bank, Karmashangosthan Bank, Grameen Bank, Jubilee Bank, Palli Sanchay Bank.

Besides the Banks, Non-Bank Financial Institutions (NBFIs) are also operating in Bangladesh to boost the financial sector. Non-Bank FIs are that type of financial institution, which is regulated under Financial Institution Act, 1993 and are also controlled by Bangladesh Bank. Now, there are 34 Financial Institutions operating in Bangladesh while the first one was established in 1981.

Since the financial sector is mainly bank dependent, the number of banks has been expanded over the years. And, these different types of banks plays a vital role in financial growth of Bangladesh.

Types of Banks in Bangladesh